The Patient Protection and Affordable Care Act (PPACA) enacted March 23, 2010, and the Health Care and Education Reconciliation Act (HCERA) enacted March 30, 2010, require that group health plans and insurers make dependent coverage available for children until they attain the age of 26 regardless of tax, student, or dependent status as it relates to financial support. Group plans and insurers also may not limit dependent coverage based on whether the child is married, although the law does not extend the mandate for access to coverage to the married child’s spouse and/or children. Grandfathered group health plans are not required to offer coverage to adult children if they currently have their own employment-based coverage or if they are eligible for such coverage. The mandate to offer coverage to adult children ages 19-25 takes effect for policy years that begin on or after September 23, 2010. However, many insurers have already announced that they will adopt the requirements of the law early. Recently released regulations suggest that between 190,000 and 1.6 million uninsured individuals ages 19-25 will gain coverage in 2011 as a result of the mandate for group plans and insurers to extend coverage to age 26. Another one-half million individuals will leave the nongroup market for group coverage. Hence, the overall increase in employment-based coverage due to newly enrolled 19-25-year-olds in 2011 would range from 680,000 to 2.12 million individuals. The regulations not only provide a range of estimates for take-up but they also provide estimates on the impact of premiums. It is expected that, among those enrolling in their parents’ plan, the annual premium (using mid-range assumptions) will be $3,380 in 2011, $3,500 in 2012, and $3,690 in 2013. When distributing these costs across the entire population of families with employment-based coverage, premiums are expected to rise 0.7 percent in 2011, 1 percent in 2012, and 1 percent in 2013. If the initial enrollment estimates are too low, the effect of the age 19-25 provision will be higher. This paper reviews the estimates presented in the recently released regulations and discusses why the enrollment estimates may understate the number of 19-25-year-olds who enroll in their parents’ employment-based health plan. The analysis also compares, among the 19-25-year-old age cohort, the population with employment-based coverage and the uninsured population in order to get a sense of the types of individuals employers may see joining their plans in terms of their health status and health behavior. The PDF for the above title, published in the August 2010 issue of EBRI Notes, also contains the fulltext of another August 2010 EBRI Notes article abstracted on SSRN: “EBRI’s Spring Policy Forum: Retirement Income Adequacy -- How Big Is the Gap and How Might the Market Respond?”
