Fine print complicates effort to cover young adults

Some parents may have to wait to get children as old as age 26 to be allowed to stay on their health plans because of the health law's fine print, The Associated Press reports. "As a consequence, some families may have to wait until 2011 to get their kids covered, particularly if the parents are working for a large employer, benefits experts and government officials say. Some employers weighing whether to immediately extend coverage for young adults are wondering whether they'll have to withhold additional federal taxes from parents to cover the value of the benefit." Up to 485,000 would gain coverage from the provision. "However, an important caveat was largely overlooked: The insurers' decision applies to policies they sell directly to customers, and not generally to health plans operated by large employers. Big companies — the primary sponsors of private coverage — usually budget enough money to cover their health care costs and hire insurers as intermediaries to administer their plans. Under the health care overhaul law, there may be a lag in when they offer the new benefit." Although the provision begins Sept. 23, it becomes effective for the next plan year, which for many plans doesn't begin until Jan. 1, 2011 (Alonso-Zaldivar, 4/27).

USA Today: "Some states already allow adult children to remain on their parents' plan, but the maximum age varies, and some states limit the coverage to full-time students. In addition, the state requirements don't apply to companies with self-funded insurance plans. Under the federal health care law, any child younger than 26 can remain on a parent's plan, as long as the child doesn't have access to an employer-provided plan. The requirement will include self-funded plans," according to Sandra Block, who writes a column for the paper about personal finance. And college graduates can take advantage of COBRA, which allows them to stay on their insurance plan after college, but they will have to pay 100 percent of the premium and administrative costs. USA Today suggests people find out how much it will cost to cover a child and compare it with the cost of a high-deductible plan (Block, 4/27).

The Federal Times: "The Office of Personnel Management is working with Congress to implement the health reform law early by allowing health insurance coverage of employees' adult dependent children up to age 26 before Jan. 1. If current laws are not changed, however, dependents age 22 and older will have to wait until 2011 for coverage. Some health insurance providers plan to extend coverage to adult dependent children of their non-federal enrollees early."

"The health care reform law requires insurers to extend coverage to enrollees' children in the first plan year beginning on or after Sept. 23. ... But the Office of Personnel Management said April 23 that the current law governing the Federal Employees Health Benefits Program does not allow federal plans to cover enrollees' children before the health care reform provisions take effect" (Losey, 4/26).