Coverage of young adults will raise premiums; Workers can deduct cost of adding children to insurance

The provision of the new health law that allows families to keep young adults on their policies up to age 26 "will nudge premiums nearly 1 percent higher for employer plans, the government said in an estimate released Monday," The Associated Press/New York Times reports. HHS "released estimates of the costs and benefits of the requirement as part of a regulation directing employers and insurers how to carry it out. … The new benefit will cost $3,380 for each dependent, raising premiums by 0.7 percent in 2011 for employer plans, according to the department's mid-range estimate. Some 1.2 million young adults are expected to sign up, more than half of whom would have been uninsured." This provision, which is effective later this year, "is one of the most anticipated early benefits of President Barack Obama's new health care law (5/10).

Bloomberg Businessweek: Under the regulations issued Monday "workers who pay to add children to their insurance can deduct the cost from their taxes if the money used to pay the premium isn't already set aside as pre-tax cash. … The regulations issued today [also] set up a 30-day period starting on Sept. 23, where young adults who aren't already on their parents' plans will be able to join. The rules say the tax break is retroactive to March 30" (Armstrong, 5/10)

The Washington Post: "'The new policy applies only to health insurance plans that offer dependent coverage in the first place: while most insurers and employer-sponsored plans offer dependent coverage, there is no requirement to do so,' HHS said in a statement Monday." HHS noted that families can be charged more for the young adults' coverage if "similarly situated" people can be required to pay more under their health plan. "The young adults must be offered all of the benefit packages available to 'similarly situated' individuals who did not lose coverage because their dependent status ended, HHS said" (Hilzenrath, 5/10).