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Kids and Parental Health Insurance: Scene in Flux

It’s fair to say that everyone expected the transition to a new health care model — one where insurers are to be held to greater account — to be confusing in the beginning. It’s equally fair to say that no one is being disappointed in those expectations. This is especially true for families hoping to continue to carry their children on their health policies up to the new cut off age of 26, as pointed out in an article by N.C. Aizenman for The Washington Post (“Families are Confused over Health-Care Law’s Coverage for Young Adults,” 27 June 2010.)

Here’s what the law actually says. Existing health plans do not have to comply with the extended age for coverage until the policy’s first renewal date after September 23. For some plans, that’s October. However, others will come up for renewal in January and some not until the following May. This is definitely a case of “make no assumptions.” Call your insurance company and find out exactly when the extended age provision will apply to your young adult children. Otherwise, you are risking the real potential of a dangerous and potentially expensive coverage gap.

Another potential wrinkle is that just because more than 60 major insurance companies have agreed to cover young adult children before the required date, that doesn’t mean that the employer subscribing to the given insurance plan will agree to the coverage before it is absolutely required. After all, employers are going to have to share part of the cost of the additional premiums and in a tight economy, many are likely to put that off as long as possible.

Bottom line, the “rules” on college graduates and health insurance are changing fast. Ask questions, get the answers in writing, assume nothing.

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