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RISMEDIA, August 21, 2010—(MCT)—Starting next month, one of the first big initiatives of the new federal health care law takes effect: Families can start insuring their young adult children under their employer plans.

Before the changes, most young people were booted off their parents’ plans when they hit 19, unless they remained full-time students. Now they can stay on — or rejoin — and stay covered until they turn 26.

This part of the new law takes effect Sept. 23 at the earliest, or at the next employee re-enrollment date, depending on the insurance plan. Companies must provide a 30-day open enrollment period for young adults to join parents’ plans.

It’s difficult to predict just how many young adults plan to take advantage of this part of the law experts say, but insurance companies are already taking steps to prepare for new clients. Many major companies are providing early enrollment for people who might age off the plan.

“Really, across the board, the response has been great,” said Charlie Pitts, president of Cigna HealthCare in North Carolina. “There’s an awful lot of active curiosity.”

At Duke University, which provides self-funded insurance to its employees, there was a rise in inquiries from employees, most of whom have children who aged off health plans in May, said human resources vice president Kyle Cavanaugh.

Cavanaugh said he expects several hundred more young people to join the university’s health-care plan via their parents in January, which is when their open enrollment date is scheduled.

While debates have raged on over the last year about the role of the federal government in the health care system, there has been relatively little organized opposition to the under-26 provision.

Considering the national unemployment rate of 9.6 percent and the scarcity of good jobs offering full health benefits, it could be a popular option for young adults and their parents, experts say.

Right now, there are only two requirements to qualify. The first is the parent’s plan must be a family plan that includes dependents. The second is that the young adult’s employer must not offer insurance and the parents’ plan must have been in existence when the law passed in March.

All people under 26 qualify even if they’re not in school, living at home or listed as a dependent on a parent’s tax return, the Department of Labor said.

“There’s really no reason not to” go under the parent’s family plan if you’re under 26 and uninsured, said Sara Collins, vice president for Affordable Health Insurance at the Commonwealth Fund, a private health policy foundation.

Regulations are specified in a way that an adult child can come onto a parent’s plan the same way a younger child would, Collins said, so “it’s not as if you have to pay an extra full premium.”

Lauren Cathey, a 23-year-old office assistant in Charlotte, N.C., is waiting for the opportunity to rejoin her mother’s insurance. She was kicked off the plan a few years ago when she stopped being a full-time student at the University of North Carolina-Charlotte, and now her employer doesn’t offer insurance.

“I haven’t really been to the doctor since I was at least 18 or 19 because I haven’t had health insurance,” Cathey said. Fortunately, she doesn’t have any major health issues.

Before the federal law passed, states had their own age requirements for dependent coverage.

Charlotte resident Kora Sadler, 39, was afraid that her 19- and 20-year-old children would age off her employer-provided health plan when they finish at Johnson and Wales University and the Art Institute of Charlotte.

“Yes, I am relieved,” said Sadler, because now she can keep her children on her family plan as dependents.

Critics of the under-26 provision say it propagates a “nanny” mentality among young adults, who should be striving for independence from their parents.

Charlie Creason, 22, has a full-time job as a manager of a coffee shop in Easley, S.C., but he doesn’t receive employer health insurance. The 2006 Providence High School grad has been uninsured since January, but he doesn’t want to go back on his parents’ plan.

“I’ve moved out from under my parents’ roof — and I’m trying to stand on my own two feet,” Creason said. He plans to look into private-purchase insurance plans.

Some skeptics of the new law say that unless a parent already has dependent coverage, a healthy young adult should consider buying high-deductible coverage to cut potentially unnecessary costs.

These high-deductible policies, often called catastrophic plans, have low premiums. They also are set up in connection with a tax-free health savings account, where you can “take the money and use it on your own,” said Joe Coletti, director of health and fiscal policy at the nonprofit John Locke Foundation.

For healthy young people insured through their own or their parents’ employer, being part of a pool with older or sick people works to keep costs relatively lower for everyone. But that cost is still probably higher than you might pay through private coverage, Coletti said.

It’s no surprise that rates for privately purchased health insurance differ dramatically by age. Based on calculations on ehealthinsurance.com, a female 22-year-old who’s not in college and doesn’t smoke can buy an individual plan in Charlotte starting at $52.67 a month. For a 45-year-old woman who doesn’t smoke, the cost is double, though these costs can become prohibitive with pre-existing conditions.

Young adults represent the highest uninsured age group. Many without chronic conditions think they don’t need health insurance, but an uninsured person is just an accident away from financial ruin, said Aaron Smith, executive director of the health-care advocacy group Young Invincibles.

He said many young people will probably take advantage of the coverage once that September date has passed, because it’s not just the unemployed young people who can benefit — it’s the college students, freelancers, part-time workers and full-time workers who don’t have employer insurance.

“The idea is that you’re protecting yourself in case something bad happens,” Smith said. “You don’t expect your car to get totaled, but you still buy insurance to protect yourself. You don’t expect your house to burn down, but you still buy insurance.”

(c) 2010, The Charlotte Observer (Charlotte, N.C.).

Distributed by McClatchy-Tribune Information Services.

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