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Covering Young Adults Through Their Parent's or Guardian's Health Policy

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April 2010 Girl on Computer
Young adults age 19 through 29 are the largest growing age group in the country at risk of being uninsured. Young adults account for about 13 million of the 47 million Americans living without health insurance. That amounts to approximately 30 percent of the U.S. population between the ages of 19 and 29 being uninsured.

Young adults often lose their health insurance if covered under their parent's or guardian's policy at age 19 or upon graduation from high school or college. Typically, parents who cover their children as dependents on their policy do so through their employer's health insurance benefits. Most employer-covered health plans do not cover dependents after age 19 if they are not enrolled in college full time. Most young adults covered through public programs, such as Medicaid or the State Children's Health Insurance Plan (CHIP), lose eligibility for the program when they reach 19 years of age.

Young adults' ability to attain and secure health insurance coverage for themselves is often difficult. Ordinary transitions in and out of school and jobs throughout their 20s affect their ability to remain on their parent's or guardian's policy or become eligible for employer-sponsored health insurance. Entry level low-paying and temporary jobs typically do not offer health benefits. Purchasing health insurance in the individual market is unaffordable given that 50 percent of uninsured young adults reside in households with incomes below the federal poverty level.

To address this problem, State policymakers are proposing and enacting legislation that extends dependent benefits to young adults not enrolled in college full-time. In 1994, Utah become the first state to enact legislation allowing coverage for unmarried dependents to continue up to age 26, regardless of school enrollment status. A 2006 New Jersey law provides coverage for unmarried dependents up to age 31, as long as they do not have any dependents of their own. At least 30 states have now enacted similar legislation to extend dependent coverage regardless of enrollment in school.

Federal Action

The U.S. House of Representatives approved a Senate health overhaul bill and sent it tothe president for his signature on March 21. The President signed the bill into law on March 23. The House also passed a package of amendments that will change provisions of the original bill. That was sent to the Senate for action on March 22, 2010 and was passed into law. This reform would requires health plans to allow young people up to their 26th birthday to remain on their parents’ insurance policy, at the parents’ choice regardless of marital status and would be effective 6 months after enactment--October, 2010. The legislation was the subject of a fierce partisan battle and passed with only Democratic votes. Republicans have vowed to continue their opposition.

White House and IRS Provide Additional Guidance On Coverage for Young Adults on April 27, 2010

The White House reiterated the message sent by Secretary Sebelius over the last few days of the importance of seamless coverage for young adults in America, and the importance provisions in the PPACA play in extending the opportunity for health coverage through their parents. At this time a large number of plans are voluntarily offering to implement coverage options under a parents plan well before the September 23, 2010 required implementation date according to the secretary. The Internal Revenue Service (IRS) has just issued guidance concerning the tax treatment of health care benefits provided with respect to children under the age of 27.

The Affordable Care Act required group health plans and health insurance issuers that provide dependent coverage of children to continue to make the coverage available for an adult child until age 26, but the Affordable Care Act amended the IRS code to give certain favorable tax treatment to coverage for adult children. Specifically, the Affordable Care Act’s amendment of the code to extend the general exclusion from gross income for reimbursements for medical care under an employer-provided accident or health plan to any employee’s child who has not attained age 27 as of the end of the taxable year. This expanded health care tax benefit applies to various workplace, retiree health plans, and self-employed individuals who qualify for the self-employed health insurance deduction on their federal income tax return.

White House Press Release

White House Fact Sheet

IRS Press Release

IRS Guidance

Thus far, the following insurance companies have agreed to maintain coverage for young adults enrolled on their parents’ plans:

Blue Cross and Blue Shield of Alabama

Blue Cross Blue Shield of Delaware

Blue Cross and Blue Shield of Arizona, Inc.

Blue Cross and Blue Shield of Florida

Arkansas Blue Cross and Blue Shield

Blue Cross and Blue Shield of Hawaii

Blue Shield of California

Blue Cross of Idaho Health Service

Regence Blue Shield of Idaho

Wellmark Blue Cross and Blue Shield of Iowa

Health Care Service Corporation

Blue Cross and Blue Shield of Kansas

Blue Cross Blue Shield Association

Blue Cross and Blue Shield of Louisiana

WellPoint, Inc.

CareFirst BlueCross and BlueShield

Blue Cross and Blue Shield of Massachusetts

Blue Cross and Blue Shield of Kansas City

Blue Cross and Blue Shield of Michigan

Blue Cross and Blue Shield of Montana

Blue Cross and Blue Shield of Minnesota

Blue Cross and Blue Shield of Nebraska

Blue Cross & Blue Shield of Mississippi

Horizon Blue Cross and Blue Shield of New Jersey, Inc.

HealthNow New York, Inc.

The Regence Group

Excellus Blue Cross and Blue Shield

Capital BlueCross

Blue Cross and Blue Shield of North Carolina

Independence Blue Cross

BlueCross BlueShield of North Dakota

Highmark, Inc.

Blue Cross of Northeastern Pennsylvania

BlueCross and BlueShield of Tennessee

Blue Cross and Blue Shield of Vermont

Blue Cross & Blue Shield of Rhode Island

Premera Blue Cross

Blue Cross and Blue Shield of South Carolina

Blue Cross and Blue Shield of Wyoming

Kaiser Permanente

Cigna

Aetna

United

WellPoint

Humana

Capital District Physicians’ Health Plan (CDPHP), Albany, New York

Capital Health Plan, Tallahassee, Florida

Care Oregon, Portland, Oregon

Emblem Health, New York, New York

Fallon Community Health Plan, Worcester, Massachusetts

Geisinger Health Plan, Danville, Pennsylvania

Group Health, Seattle, Washington

Group Health Cooperative Of South Central Wisconsin, Madison, Wisconsin

Health Partners, Minneapolis, Minnesota

Independent Health, Buffalo, New York

Kaiser Foundation Health Plan Oakland, California

Martin’s Point Health Care, Portland, Maine

New West Health Services, Helena, Mt

The Permanente Federation, Oakland, California

Priority Health, Grand Rapids, Michigan

Scott & White Health Plan, Temple, Texas

Security Health Plan, Marshfield, Wisconsin

Tufts Health Plan, Waltham, Massachusetts

UCARE, Minneapolis, Minnesota

UPMC Health Plan, Pittsburgh, Pennsylvania

In 2008, Congress passed Michelle's Law (H.R. 2851) which requires insurance plans that use student status to determine dependent eligibility to allow dependents to take up to 12 months of medical leave without jeopardizing their eligibility. More than 20 percent of states had enacted similar laws prior to federal action.

COBRA Continuation Coverage Rights:
A dependent child will become qualified for COBRA benefits if they lose coverage under their parent's employer-sponsored insurance (20 employees or more) if:

1. the parent/employee dies;
2. the parent/employee's hours of employment are reduced;
3. the parent-employee's employment ends for any reason other than his/her gross misconduct;
4. the parent/employee becomes enrolled in Medicare;
5. the parents become divorced or legally separated; or
6. the child stops being eligible for coverage under the plan as a "dependent child."

COBRA continuation coverage is a temporary continuation of coverage. For #6 the period of coverage is 36 months. Beneficiaries typically pay the entire premium for coverage (employer and employee share). The premium charged to the beneficiary cannot exceed 102 percent of the cost of the plan for similarly situated individuals who have not incurred a qualifying event.

State Actions

In addition to extending benefits to young adults regardless of school enrollment status, policymakers are proposing and enacting legislation that extends dependent benefits to disabled young adults and members of the National Guard, military reserve, and veterans.

*It is important to note that these laws do not aaply to self-insured or ERISA plans. Federal laws does not define "dependent" for purposes of group health plans. These laws apply to fully insured group coverage as well as individual coverage.*

Health Insurance Coverage for Young Adults --2008 NCSL Legisbrief

Table of State Laws - Updated August 20, 2009

State	Laws
Colorado	Colo. Rev. Stat. § 10-16-104.3 states that a child is considered a dependent for insurance purposes up to age 25 (even if they are not enrolled in an educational institution) as long as they are unmarried and are financially dependent or share the same permanent address as the insurance provider.
Connecticut	C.G.S.A. § 38a-497 requires that group comprehensive and health insurance policies extend coverage to unwed children until the age of 26 provided they remain residents of Connecticut or are full-time students.
Delaware	Del. Code Ann. Tit. 18, § 3354 requires insurance providers to cover policyholder's dependent children until age 24. Dependents must be unmarried and a resident of Delaware or, if living outside the state, a full-time students. Insurance companies may charge more for dependent coverage past age 18, but it may not exceed 102 percent of the policyholder's cost before the child turned 18.
Florida	Florida 627.6562 allows for dependent children up to 25, who live with their parent or are a student, and up to 30 years old, who are also unmarried and have no dependent child of their own, to remain on their parents' insurance.
Georgia	Ga. Code § 33-30-4 allows dependent children up to age 25 who are enrolled as a full-time student at least five months during the year or are eligible to enroll but are prevented due to illness or injury to remain on their parents' insurance. Ga. Code § 33-24-28 requires that a health services plan or health insurer exempt dependent children incapable of self-sustaining employment due to disability from dependent age limits.
Idaho	Idaho Stat. § 41-2103 allows for any unmarried dependents to remain on their parents' health insurance until age 21; any full-time, unmarried student until age 25; or a dependent with a disability without regard to age.
Illinois	215 ILCS 5/356z.12 provides parents with the option of keeping unmarried dependents on their health care insurance up to age 26. Parents with dependents who are veterans can keep them on their plans up to age 30.
Indiana	IC 27-8-5-2,28 and IC 27-13-7-3 require commercial health insurers and health maintenance organizations to cover children until age of 24 or without regard to age if they are incapable of self-sustaining employment due to disability.
Iowa	Iowa Code § 509.3 and Iowa Code § 514E.7 requires that health insurance providers continue to cover unmarried children under their parents' coverage provided that the child 1) is under the age of 25 and a current resident of Iowa, 2) is a full-time student, or 3) has a disability.
Kentucky	Ky. Rev. Stat. § 304.17A-256 allows parents to keep their unmarried children on their health plans until the age of 25. Parents may have to pay extra for their adult children.
Louisiana	La. Rev. Stat. Ann. § 22:1003 allows an unmarried, dependent child to remain on parent's insurance up to age 24 if they are a full-time student.
Maine	24-A MRSA § 2742-B requires individual and group health insurance policies to continue coverage for a dependent child up to 25 years of age if the child is dependent upon the policyholder and the child has no dependents of the his/her own.
Maryland	MD Code, Insurance § 15-418 requires that health insurance be extended to, at the request of the policy holder, unmarried dependents under the age of 25.
Massachusetts	Mass. Gen. Laws Ann. Ch. 175 § 108 allows dependents to stay on their parent's coverage for two years past the age of dependency or until age 26, whichever occurs first, or without regard to age if they are incapable of self-sustaining employment due to disability. Young adults ages 19-26 are eligible for lower-cost insurance coverage, tailored to meet their needs, offered through the Commonwealth Health Insurance Connector. Reform summary and fact sheet, PowerPoint presentation; More information.
Minnesota	Minnesota Chapter 62E.02 Defines "dependent" as a spouse or unmarried child under age 25, or a dependent child of any age who is disabled.
Missouri	Mo. Rev. Stat. § 354-536 defines dependent as an unmarried child up to age 26. If a health maintenance organization plan provides that coverage of a dependent child terminates upon attainment of the limiting age for dependent children, such coverage shall continue while the child is and continues to be both incapable of self-sustaining employment by reason of mental or physical handicap and chiefly dependent upon the enrollee for support and maintenance.
Montana	MCA 33-22-140 provides insurance coverage under a parent's policy for unmarried children up to age 25.
Nevada	NRS 689C.055 allows an unmarried, dependent child who is a full-time student to remain on his or her parent's insurance up to age 24 if parent is covered by small group policy. NRS 689B.035 requires that dependents retain coverage beyond age of policy termination if they are incapable of self-sustaining employment due to disability.
New Hampshire	N.H. Rev. Stat § 420-B:8-aa defines dependent as those who are unmarried up to age 26 and either a full-time student or resident of New Hampshire for purposes of health insurance coverage. 2009 SB 115 allows those up to age 26 to buy-in to coverage through the state's CHIP program, Healthy Kids.
New Jersey	N.J.S.A. 17B:27-30.5 states that, at the option of the insured person, a dependent may be covered up to the age of 31, as long as they are unmarried and have no dependents of their own.
New Mexico	NM Stat. Ann. § 13-7-8 states that health insurance for dependents may not be terminated based on age up to age 25.
New York	2009 AB 9038 allows an unmarried child to remain on parent's insurance up to age 30 if they are a resident of New York.
North Dakota	N.D. Cent. Code § 26.1-36-22 allows an unmarried, dependent child to remain on parent's insurance up to age 22 if they live with parents. If they are a full-time student, they can remain on parent's insurance from age 22 up to age 26.
Ohio	Ohio Rev. Code § 1751.14, as amended by 2009 OH H 1 allows an unmarried, dependent child that is an Ohio resident or a full-time student to remain on parent's insurance up to age 28, or without regard to age if they are incapable of self-sustaining employment due to disability.
Oregon	O.R.S. § 735.720 defines dependent as an unmarried child up to 23, elderly parents and disabled adult children for the purpose of insurance coverage.
Pennsylvania	2009 SB 189 states that an unmarried child may remain on parent's insurance up to age 30 if they have no dependents and are residents of PA or are enrolled as full-time students. 51 Pa.C.S.A. § 7309 states that full-time students whose studies are interrupted by service in the reserves or the National Guard must be extended health care benefits as a dependent of their parent beyond the terminating age equal to the length of their deployment..
Rhode Island	R.I. Gen. Laws § 27-20-45 and Gen. Laws § 27-41-61 requires insurance plans which cover dependent children to cover unmarried dependent children until age 19 or, if a student, until age 25. If the dependent child is mentally or physically impaired, the plan must continue their coverage after the specified age.
South Carolina	S.C. Code Ann. § 38-71-1330 allows an unmarried, dependent child who is a full-time student to remain on parent's insurance up to age 22 if parent is covered by small group policy. S.C. Code Ann. § 38-71-350 requires that a dependent child who is not capable of self-sustaining employment be allowed to remain on his or her parent's insurance, without regard to age.
South Dakota	SD Codified Laws Ann. § 3-12A-1 states that any insurance provider offering benefits to a dependent may not terminate those benefits by reason of age before the dependent's 19th birthday. If the dependent is enrolled in an educational institution, they are not to be terminated until they reach age 24 and not terminated if unable to seek self-support due to disability. SD Codified Laws § 58-17-2.3 states that if the dependent remains a full-time student upon attaining age 24 but not exceeding age 29, the insurer shall provide for the continuation of coverage for that dependent at the insured's option.
Tennessee	Tennessee Code Ann. § 56-7-2302 allows for dependent coverage for children under their parents' health insurance plan up to age 24 provided the child is unmarried and financially dependent on the parents.
Texas	V.T.C.A. Insurance Code § 846.260 and V.T.C.A. Insurance Code § 1201.059 make dependent status available for an unmarried child up to age 25 for insurance purposes.
Utah	Utah Code Ann. tit. 31A § 22-610.5 requires that coverage for unmarried dependents continue up to age 26, regardless of whether or not the dependent is enrolled in higher education.
Virginia	Va. Code Ann. § 38.2-3525 makes dependent status available to any child up to age 19 or who is a dependent up to age 25 who resides with the parent or is a full-time student.
Washington	West's RCWA 48.44.215 states that, at the option of the insured person, an unmarried dependent may be covered up to age 25.
West Virginia	W. Va. Code § 33-16-1a defines dependent for health insurance coverage as a child or stepchild up to age 25.
Wisconsin	Wis. Stat. § 632.885 requires that coverage for unmarried dependents through a parent's insurance be offered up to age 27 if they are not offered insurance through an employer. Full-time students called to active duty in the armed forces can be covered beyond age 26 depending on various factors.
Wyoming	Wyo. Stat. § 26-19-302 states that if child is unmarried and a full-time student, they can remain on parent's insurance up to age 23 if parent is covered by small group policy.

Source: State Health Facts and NCSL, 2009.

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Covering Young Adults Through Their Parent's or Guardian's Health Policy

For information on Federal Health Reform, click here For information on state laws implemented prior to federal reform, click here

Federal Action

State Actions

Table of State Laws - Updated August 20, 2009

For information on Federal Health Reform, click here
For information on state laws implemented prior to federal reform, click here