Under the new health care reform children/adults can stay on their parents health plan until 26. Here is the issue that will arise with this. Can the parents afford to cover the adult child on the plan. With most group health plans today employees pay for their dependents. On the other side if the parent is already covering other children on plan the addition of the adult child might not have any impact on premium. So every parent should quote out the adult child on an individual plan to see if that is a better option from a price point. Now from an underwriting stand point being able to put the adult child on a group health plan who has ongoing health conditions could be a major relief.
Adult Child Coverage:
The Departments of Health and Human Services. Labor and Treasury issued new regulations to extend coverage to young adults by allowing them to stay on their parents’ health care plan until age 26. Before the Affordable Care Act, many health plans did remove young adults from their parents’ policies because of their age, leaving many college graduates and others with no insurance.
Today, about 30 percent of young adults are uninsured, representing more than one in five of the uninsured Americans. This rate is higher than for any other age group. The Affordable Care Act and the regulations announced today will help close the coverage gap for young Americans. While the new provision takes effect for policies and plan years beginning on or after September 23, 2010, more than 65 insurance companies have voluntarily agreed to provide coverage to young adults before the deadline. On April 27, the Internal Revenue Service released new guidance specifically stating that children can be covered tax-free on their parents’ health insurance policies. According to analysis by the Department of Health and Human Services of this provision, adding young adult coverage would increase average family premiums by an average of 0.7 percent, while allowing 1.2 million young Americans coverage under their parents’ plans through employers or the individual market.