At least 30 states require organizations that offer health benefits to employees’ dependents to include children up to age 30—and the number is growing.
The Illinois Legislature in September raised the cutoff age for dependent coverage from 23 to 26 for unmarried children—regardless of whether they are students. That law, scheduled to kick in next June, is similar to a New Jersey mandate that employers cover unmarried dependents up to age 30 as long as those dependents are not parents.
Colorado, New Mexico, South Dakota, Texas and Utah recently have expanded their coverage to dependents ages 24, 25 or 26. A handful of other states are considering similar laws.
They are reacting to the growing number of young adults who do not have health insurance. The National Conference of State Legislatures estimates that about 30% of 19- to 29-year-olds—13 million people—are uninsured.
Tip: Delve into the details if your state has adopted an age extension. Requirements vary substantially by state.
Here are five questions to ask about your state’s law:
1. Is the new age cap different for dependents who are veterans? In Illinois, unmarried veterans will be able to stay on their parents’ policies until age 30.
2. Does the age cap vary depending on marital status, whether the adult child has dependents of his or her own, where the person lives or whether he or she is a student?
3. Does the law apply to your organization if you don’t already offer dependent benefits? In most states, it doesn’t.
4. Are self-insured organizations in your state included in an age extension law? Most states have exempted them.
5. Which law covers your organization if you operate in multiple states? Your legal advisor can help you tiptoe through that minefield.
A silver lining: The laws don’t force employers to pay for these dependents’ health coverage. If your plan requires employees to pay some or all of younger dependents’ premiums already, you can extend that requirement to policies for newly covered older kids.
While covering older dependents will add some HR headaches, it’s unlikely to break the bank. Analysts estimate the age extensions will raise the cost of employer health plans by between 0.3 and 1%. The reason: Young adults are a healthy group and fairly cheap to insure.
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