The college graduating class of 2010 may be less likely to face a gap in health insurance thanks to action being taken by a growing list of insurers. These companies have decided to begin the extension of health benefits for dependents up to age 26 before the date required by health reform later this year.
Secretary of Health and Human Services Kathleen Sebelius has engaged in a campaign to urge companies to add their commitment to this list and has been pleased to announce agreement by:
- Blue Cross Blue Shield
- Kaiser Permanente
- United Healthcare
Extending coverage is one of the first provisions of health reform to go into effect increasing the availability of insurance to a population that has a very high uninsured rate. The law requires that coverage be extended to dependents up to age 26 at the beginning of the first plan year after September 23, 2010. For most employers with calendar year plans this effective date will be January 1, 2011.
There are still some questions to be clarified by the Department of Health and Human Services (HHS)including whether working or married children, and their spouses, can be covered under a parent’s plan. You may already be required to extend coverage if you are in one of 25 states where this is a regulatory requirement. The most common state laws require coverage up to age 25, some are lower and in New Jersey the upper age limit is 30. All state laws cover only fully insured plans, the new federal health reform affects self insured plans too.
If you receive benefits through one of the big plans listed above find out the details for extending coverage. The plan or your broker should be providing information and any necessary sign up requirements. Companies who are not sure whether their provider is allowing an early eligibility date should ask. Smaller, regional carriers may follow the pattern encouraged by HHS.
Recent grads might feel invincible and be willing to skip coverage but their parents know the value of health benefits. Closing the coverage gap will alleviate some stress for these employees and save money for those who have been, or plan to, fund private coverage. It’s a valuable gift whether or not it is ever used.