Health Insurers, Employers Soon To Begin Expanding Coverage To Young Adults

News outlets are reporting that the administration will release details soon about the provision of the new health law that allows young adults to stay on their parents' insurance plan.

The San Francisco Chronicle notes that although many major insurers have announced that they will offer the provision earlier than required in the law, timing and cost of such coverage will vary. "The insurers said they would offer coverage right away or by June 1. It's possible, though, that some young people will be left off their parents' coverage until as late as Jan. 1, health experts say. The timing, they say, may depend on the parents' employer policies -- the type of plan, the contracts the employer has with insurers, and the employer's renewal or 'open enrollment' dates. ... Information is scarce because the law is new, and employers and insurers are still hammering out the details or are waiting for additional information from the federal government. Employers don't yet know how to charge for dependent coverage -- for example, whether to group young adults with other dependants -- and are unclear about other rules and definitions" (Colliver, 5/10).

The Christian Science Monitor reports that some companies have concerns about the cost of the provision, including Caterpillar, which considered "accepting government fines by dropping employee health care plans over provisions like the new dependent-coverage adjustment. That provision alone, Caterpillar says, could cost the company $20 million. If such decisions become widespread, it could increase the government's share of health care costs. Fortune magazine estimates  that the government will pay $2,100 for every American whose insurance is dropped by employers as a result of the law. 'If 50 percent of people covered get dumped,' the magazine recently wrote, 'federal health care costs will rise by $160 billion a year in 2016, in addition to the $93 billion in subsidies already forecast by the [Congressional Budget Office]'" (Jonsson, 5/8).

ABC News: "On Monday the administration will announce that they have asked insurance companies to not wait until September to comply with the rule that allows young adults without insurance to say on their parents'' plan until they're 26 years old, to benefit this year's graduating classes" (Miller, 5/8).

Sacramento Bee: "The new federal legislation targets a broad swath of young adults, who are the largest segment of the U.S. population going without health insurance. In a September report, the Employee Benefits Research Institute reported that 38 percent of men and 28 percent of women ages 21-24 were uninsured in 2008. About 21 percent of adults ages 18 to 30, who graduated from college in the past three years, have no health care insurance, according to a recent survey by eHealthInsurance.com."

"In most cases, the expanded coverage applies to employer-provided and retiree health plans. It also applies to individuals who qualify for the self-employed health insurance deduction on their federal taxes" (Buck, 5/9).

Hartford Courant/The Associated Press: United Technologies Corp. says it will extend health care benefits to employees' unmarried dependent children up to age 26, four months before federal law requires it. ... United Technologies, which has a payroll of 26,000 employees in Connecticut, is offering the benefit at the same rates employees now pay for dependent children" (5/9).