Keeping Adult Children Insured

I’ve already written two columns in response to readers’ questions about the new health-care-reform law and extending coverage to adult children, Putting Adult Children Back on Your Health Plan and New Grads and Health-Care Reform. Since then, the U.S. Department of Health and Human Services and the U.S. Department of Labor have issued regulations that clear up some of the details of how the new law will be implemented.

I understand that health insurers must let adult children up to age 26 stay on their parents’ policies starting six months after the law was passed, which would be September 23, 2010. But my employer isn’t changing its rules until January 1. Is this legal?

Yes, this is legal, and this will be the case with many health plans. Under the new law, insurers that offer dependent coverage must let adult children stay on their parents’ policies until age 26, starting with the plan year that begins after September 23. Most health plans work on a calendar-year schedule, so the new rule generally takes effect on January 1, 2011. Insurers must provide an open-enrollment period of at least 30 days for children who qualify for this coverage, starting no later than the first day of the new plan year. Ask your insurer or human-resources department about the timing and the steps you need to take to reinstate children who have aged off your policy.

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My son is about to graduate from college, but my insurer’s new plan year doesn’t start until January 1, 2011. Will he get kicked off my coverage until the new rule takes effect?

Probably not. As of mid May, more than 65 insurers have offered to let new grads who are currently covered under their parents’ policies keep their coverage. This helps insurers avoid the hassle of removing kids from a policy and then re-enrolling them a few months later.

If your employer self-insures its health plan, however, it may not be extending coverage to grown children before the new rules require it to do so, even if the plan is administered by an insurer that is offering the early coverage to its own policyholders. Ask your HR department about its rules.

My son works for a company that offers health insurance to employees, but the coverage is expensive and not very good. Our policy is much better. Can he be covered on our policy instead? He’s younger than 26.

No. The new rule doesn’t currently apply to adult children who have an offer of coverage through an employer. Beginning in 2014, however, children up to age 26 may stay on their parents’ health plan, even if they are offered coverage through their employer.

My 25-year-old son is married, but his employer does not offer health insurance. Can I cover him on my health policy?

Yes. All children younger than 26 who are not offered health coverage at work, regardless of whether they’re married, may be covered on a parent’s plan. But your coverage does not extend to your son’s wife or his children .