Can You Keep Your Kids Insured?

As Washington wrestles with health-care reform, states have been busy passing their own laws to allow many young adults to remain longer on a parent's health insurance.
In June, New York's governor signed one of the most recent measures -- a law allowing families to keep children up to age 29 on their employer-provided insurance, even if they aren't students. The adult child must not be eligible for other coverage, and he or she must work or reside in the state.

The Criteria

More than 20 states have similar laws. In most cases, the legislation extends coverage for young adults until their mid-20s, regardless of whether they are still in school. They typically require that the person not be married and not be eligible for other insurance. Parents usually have to pay more for the coverage, though that varies by state and plan.
"This is one way to decrease the underinsured liability for the state," says Edward Kaplan, a national health-care practice leader at Segal Co., a benefits consulting firm. Low Prices and Huge Discounts on Video Game Accessories. Shop GameShark Store.

Florida, New Mexico and Washington are among those that have extended coverage to nonstudents up to age 25. In Florida, insurers that offer dependent coverage must cover dependent children until they are 25. They also must offer policyholders the option to extend coverage until the children are 30.
Illinois passed a law last year that extends coverage to unmarried dependents until they're 26 regardless of their student status, and up to age 30 if they're veterans and have been honorably discharged.
Parents should check with their state insurance commission or their employers' human-resources departments to see if their adult children are eligible.


Extending parental coverage is often a better option than getting an individual policy for a young adult. "Dependent coverage tends to be a little richer than individual coverage," says Joel Cantor, a professor and director at the Center for State Health Policy at Rutgers University. It also typically is less expensive than an individual policy. That's especially true if the person has a pre-existing medical problem, which could make it difficult to find other coverage.

No Job, No Coverage

Research released in August by the Commonwealth Fund, a health-care research foundation, found that young adults age 19 to 29 are one of the largest segments of uninsured in the U.S. Almost 30% of people in that age group are uninsured because they don't think they need coverage, are no longer eligible for a parent's plan or work in entry-level or low-paying jobs that don't offer insurance.

Sara R. Collins, vice president for the Affordable Health Insurance Program at the Commonwealth Fund, says the problem likely will worsen because of the tight job market.

Lale Iskarpatyoti, a group and health-care practice leader at consulting firm Watson Wyatt, says most young adults "think nothing will happen to them so they look at the cost [of insurance] and don't get it."

But she knows the coverage is crucial. Her son -- a recent college graduate -- has health insurance at his new job. But it hadn't kicked in yet when he collided with another athlete during an Ultimate Frisbee game. The medical bill for his broken nose would have been thousands of dollars if his parent's policy had lapsed.

From Wall Street Journal


Mr. Dangerfield is an I.A.P.D.A Certified Debt Specialist whom has worked in the finance industry for 11 years. He manages www.beingbrokesuckstoday.com and is the author of "A Dangerfield Manifesto" and co-founder of SMG Holdings, the parent company of Squad Music Group, Dangerfield Artistic Entertainment SMG Publishing and Taboo Dangerfield Publishing
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