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New Insurance Rules for Young Adults
Congratulations! You studied hard in college, took enough credits to graduate, and are now ready for the work force. There’s only one catch: you can’t afford health insurance!
In the very recent past, young adults heading off to college or into the workforce have often been in a quandary over what to do about health insurance. While they had breached the age where they could no longer be covered on their parent's affordable health insurance plan, they didn't have the funds to purchase a policy of their own. Many opted for private insurance companies, paying much more for fewer benefits. Others went without, preferring to live on a wing and a prayer that they wouldn't get sick or hurt before they could get coverage of their own.
The Affordable Care Act has changed it all. Under this new healthcare reform, young adults now have the ability to remain on their parent's affordable health insurance plans until they reach the ripe old age of 26. This gives them time to get a degree, get out of the house and get a regular job of their own. At least, that's what parents are hoping for!
Details of the Provision
The provision for young adults went into effect on September 23, 2010. However, plans do not have to include these individuals in their coverage until the plan renews or parents change plans completely. Many health insurance companies follow the calendar year when it comes to policy renewals, so the majority of young adults will enjoy coverage by January 1 of next year. However, you should check with your plan administrator to get the yearly schedule for your own affordable health insurance program.
Under this provision, young adults can be covered under their parents' affordable health insurance plans whether or not they are:
• Living with you
• Married
• In school
• Financially dependent on you
• Eligible for their employer's health insurance program
There is a grandfather clause in some insurance plans that allows them to restrict coverage up to age 26 if the young adult is eligible for enrollment in his employer's plan. To find out if your insurance plan contains this grandfather clause, talk to your plan administrator.
Enrolling Your Young Adult
In order to enroll your young adult in your affordable insurance program, your plan must offer a 30-day enrollment period. The period must take place no later than the first day of your plan's next policy year that begins after September 23, 2010. You must be notified in writing about this open enrollment window. If you enroll your young adult child during this window, the insurance company must cover your child from the first day of the policy year.
Young people between the ages of 19 and 34 are the most likely to go without affordable health insurance in this country. They are less likely to be offered affordable health insurance by their employers, yet they are often unable to afford the premiums when health insurance does become available. Two out of every three young adults go without necessary medical care because they did not have affordable health insurance, and they couldn't afford to pay for medical services out of their own pockets.
This is where healthcare reform comes in to save the day. By insuring young adults on their parents' affordable health insurance plans for a longer period of time, this demographic is more likely to receive medical care when they need it.
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