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 school. Young adults ages 19 to 29 are one of the largest and fastest-growing segments of the U.S. population without health insurance. 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 young adults without insurance. One state, New Jersey, raised the age of dependency to 30, the highest in the nation. Of course, parents and/or the young adult are required to pay all applicable premiums associated with the parent's employer plan.
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. Since laws regarding health insurance for young adults are state-specific, a helpful resource is the National Conference of State Legislatures’ Web site, www.ncsl.org/programs/health/dependentstatus.htm, which provides a comprehensive list of state laws and proposed and pending legislation with respect to dependent health care coverage.
If your state does not have a law extending health insurance coverage for young adults, another option is taking COBRA benefits from the parent's policy (and paying all applicable premiums) for up to 36 months after the child is no longer a qualified dependent. A second option is purchasing an individual policy until the young adult is able to secure employment with health benefits or marry someone whose employer provides family coverage. Compare the costs and features of a variety of available policies by consulting an independent insurance agent who has access to information from many companies.
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