Dependent Health Insurance Laws
Some argue that health insurance is a right, not a privilege. For others, health insurance operates as a privilege, not as a right. In the U.S. in 2009, children and young adults---both from low-income homes, and those between the ages of 19 and 29---quickly fall between the eligibility cracks for health insurance. Fortunately, there are dependent health insurance laws in place that take this population into consideration.
State Coverage Laws
Young adults covered under a parent's insurance policy are typically dropped by an insurer as of the age of 19, or upon graduating from college. School to workforce transitions often leave young people without adequate health coverage, as low-paying and temp jobs seldom provide these types of benefits. In an attempt to remedy this coverage gap, the Health Care Reform Legislation Act of 2006 requires health insurance carriers to lengthen dependent coverage up to the age of 26. These laws are implemented on a state level, so not all states have followed through with the provisions set forth in the bill. Currently, there are 30 states complying with the Health Care Reform change.
Low Income Health Coverage
Children in low-income families are provided health insurance under the State Children's Health Insurance Program (SCHIP) law of 1997. Eligibility is determined according to income level, where family incomes are too high to qualify for Medicaid. This law grants each state the authority to set their own income eligibility limits based on available funding. Eligible families are required to pay a portion of their health expenses based on their available incomes. Attempts to limit a state's flexibility with setting eligibility limits were made by the Centers for Medicare & Medicaid Services in August, 2007; however this effort was repealed by the federal government in January, 2009.
Unemployment Health Coverage
Dependents whose parents have lost their jobs also lose whatever health insurance coverage was provided through that employer. Fortunately, federal and state law allows individuals to continue their healthcare benefits under COBRA. Under COBRA, the circumstances in which employment ended determines how long coverage will be extended. Coverage can be continued for the employee, as well as for spouses and dependents. However, an employer is only required to follow COBRA requirements if he has 20 or more employees.
Effects
In the case of employer-based health insurance coverage, dependent laws have gone a long way toward ensuring young adults continue to receive adequate coverage during their transition into adulthood. However, these laws have placed an added burden on the employers in the states where Health Care Reform measures have been taken. The continuation of dependent benefits have created additional administrative responsibilities for employers as far as keeping track of federal and state definitions of "dependent," as well as the added risk in covering the young adult population. As a result, a number of employers have opted to self-fund their health insurance coverages in order to avoid state mandates.
Considerations
Individuals who work for employers who have self-funded their health insurance plans may not be able to benefit from the Health Care Reform Act in terms of continued dependent coverage. Self-funded plans are governed at the federal level, meaning state mandates, protections and provisions do not apply on behalf of the employee. Self-funded plans are rather governed by the federal Employee Retirement Income Security Act. As a result, any state mandated definitions of "dependent" may not be applicable under a self-funded employer plan.
Tags: health insurance, Care Reform, Health Care, Health Care Reform, their health, definitions dependent, dependent coverage
