FAQs about new young-adult health coverage

My daughter just graduated from college, yet even among her friends (and their parents) confusion still abounds over the rollout of one of the new health-care law's more immediate effects: new access to health insurance for young adults, up to age 26, whose parents have family health-care coverage. 

If you're confused, too, new help has arrived online, courtesy of the Department of Health and Human Services.

If you want all the legal details, you can read the new regulations here, and send in comments until Aug. 9 via Regulations.gov.  But if you just want information about the new insurance landscape, or answers to common questions, HHS has a good fact sheet and FAQ site.

Here are some of the site's answers to key questions:

Q: What plans are required to extend dependent coverage up to age 26?

A: The Affordable Care Act requires plans and issuers that offer dependent coverage to make the coverage available until a child reaches the age of 26. Both married and unmarried children qualify for this coverage. This rule applies to all plans in the individual market and to new employer plans. It also applies to existing employer plans unless the adult child has another offer of employer-based coverage (such as through his or her job). Beginning in 2014, children up to age 26 can stay on their parent’s employer plan even if they have another offer of coverage through an employer.

Q: I’m a young adult under the age of 26 and I’m on my parents plan now, but I’m scheduled to lose coverage soon. How can I keep my health insurance?

A: You have a number of options. First,check with your insurance company. Private health insurance companies that cover the majority of Americans have volunteered to provide coverage for young adults losing coverage as a result of graduating from college or aging out of dependent coverage on a family policy. This stop-gap coverage, in many cases, is available now. Second, watch for open enrollment. Young adults may qualify for an open enrollment period to join their parents’ family plan or policy on or after September 23, 2010. Insurers and employers are required to provide notice for this special open enrollment period. Watch for it or ask about it. Finally, expect an offer of continued enrollment for plans that begin on or after September 23, 2010. Insurers and employers that sponsor health plans will inform young adults of continued eligibility for coverage until the age of 26. Young adults and their parents need not do anything but sign up and pay for this option.

Q: I’m under the age of 26, and I used to be on my parents’ plan, but I recently lost this coverage because I graduated from college. Can I get coverage?

A: Yes. Check with your insurance company to see if they will provide that coverage to you now. If not, watch for the special open enrollment period and sign up then.

Q: Now that the regulation is published, are plans required to immediately enroll eligible young adults in their parents’ plan?

A: No. The law says that the extension of dependent coverage for children is effective for plan years beginning on or after 6 months after the enactment of the law – that means plan years beginning on or after September 23, 2010. However, the Administration has urged insurance companies and employers to prevent a gap in coverage for young adults aging off of their parents’ policy prior to this effective date. To date, over 65 insurers have volunteered to do so. You should check with your insurance company or employer to see if they are offering this coverage option.

Q: Will young adults be given a special chance to enroll after September 23, 2010?

A. Yes. For plan or policy years beginning on or after September 23, 2010, plans and issuers must give children who qualify an opportunity to enroll that continues for at least 30 days regardless of whether the plan or coverage offers an open enrollment period. This enrollment opportunity and a written notice must be provided not later than the first day of the first plan or policy year beginning on or after September 23, 2010. Some plans may provide the opportunity before September 23, 2010

Q: Will young adults have to pay more for coverage or accept a different benefit package?

A: Any qualified individual must be offered all of the benefit packages available to children who did not lose coverage because of loss of dependent status. The qualified young adult cannot be required to pay more for coverage than similarly situated individuals who did not lose coverage due to the loss of dependent status.

Q: Can plans or issuers who offer dependent coverage continue to impose limits on who qualifies based upon financial dependency, marital status, enrollment in school, residency or other factors?

A: No. Plans and issuers that offer dependent coverage must provide coverage until a child reaches the age of 26. There is one exception for group plans in existence on March 23, 2010. Those group plans may exclude adult children who are eligible to enroll in an employer-sponsored health plan, unless it is the group health plan of their parent. This exception is no longer applicable for plan years beginning on or after January 1, 2014.

Q: Does the adult child have to purchase an individual policy?

A: No. Eligible adult children wishing to take advantage of the new coverage will be included in the parents’ family policy.

More questions? Click here to visit the FAQ site.