A big problem in recent years has been the high percentage of young adults who lack health insurance after being dropped by a parent’s employer-provided policy, usually at age 19 or age 22 or 23 if attending college or trade school. Young adults ages 19 to 29 are one of the largest and fastest-growing segments of the U.S. population without health insurance: 13.7 million lacked coverage in 2004, an increase of 2.5 million since 2000. In response, a growing number of states have passed laws requiring health insurers to cover adult children under their parent’s policy, usually to age 24, 25, or 26, as a response to the growing cost of caring for those without insurance. One state, New Jersey, raised the age of dependency to 30, the highest in the nation. Often, this extension of coverage applies whether young adults are attending school or not, and, in some states, coverage even extends to grandchildren if they are financially supported by, or in the legal custody of, a grandparent with health benefits. Requirements for coverage vary from state to state. Many state laws do not require a dependent to be enrolled in an educational institution. The National Conference of State Legislatures’ Web site provides a comprehensive list of state laws and proposed and pending legislation with respect to dependent coverage. For further information, see the following article available at this Web site: "The changing definition of ‘dependent’: Who is insured and for how long?" (2007), National Conference of State Legislatures. www.ncsl.org/programs/health/dependentstatus.htm. We would like your feedback on this Personal Finance Frequently Asked Question.

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