As part of the Patient Protection and Affordable Care Act, young adults will be able to stay on their parents' employer-offered or individual family health plans up until age 26. This provision of the law goes into effect for plans renewing after September 23, 2010 (implemented January 1, 2011 for plans that renew on the calendar year).
Kathleen Sebelius, the Secretary of Health and Human Services, is encouraging insurers to implement some or all of this change in advance of the legal requirement so new college graduates or other young adults who are currently ineligible can continue on their parents' health plans.
As a result, several of the major insurers are offering to extend coverage to dependents who are graduating college seniors and some will cover all dependents under 26. The exact effective dates for these changes, whether it will be optional or mandated, and the processes for members and plan sponsors to follow appear to vary by carrier and aren't yet fully disclosed.
Also be aware that individual state regulations may already require extended dependent coverage.
Self-insured plan sponsors are expected to have the option of not offering this extended coverage this year, but you can be sure the actions in the insured market will get great publicity and you are likely to face employee confusion and requests to add older dependents. One factor being evaluated is of course the increased cost to the plan, which is estimated by our actuaries to be from 1.4% - 3.1%.
Another factor that will affect this decision for self-insured employers is the impact on stop-loss coverage. It is unknown yet how stop-loss carriers will react to these potential changes; therefore, self-insured employers may incur a stop-loss premium increase or not have catastrophic coverage for those added dependents.
In the next few weeks, your McCart Group account team will communicate to you the implications of these ongoing changes to your specific plan based on the policies and procedures adopted by your insurance carrier. We will work with you to help you make the best decisions for your plan with the most up-to-date information available.
