Get Health Care for Your 20-Something

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The Affordable Care Act will make getting health insurance easier for young adults. Here’s how to make the new rules work for your child.

A child grows up, leaves for college or work — and gets dumped from his or her parent’s health insurance plan.

Well, not exactly: Under provisions of the federal Affordable Care Act enacted earlier this year, young adults have a right to be carried on their parents’ health insurance policies until age 26. The provision takes effect Sept. 23.

About 30% of young adults have no health insurance, according to the Department of Health and Human Services. Many have entry-level jobs that don’t provide health insurance, others cannot afford it, and still others feel they’re too healthy to bother. But doing without insurance can be a mistake, as one in six young adults experiences a chronic illness. Also, of course, anyone can suffer an accident.

If a parent has insurance that provides coverage for dependents, that coverage must be available to the parent’s children until they reach 26. A child need not live with the parent, be enrolled as a student or even be carried on the parent’s tax return as a dependent. A married child must be covered, however, though the coverage does not have to include the child’s spouse or children.

Plans must offer young adults the same coverage provided to dependents, at the same price.

So, if you or your child can benefit from the new law, what should you do?

First, check with the parent’s insurer, or employer. The law covers plans and policies that begin their yearly cycle on or after Sept. 23. While that means your plan may not accept a new enrollee for some months, many insurers have agreed to do so right away, without waiting for the start of the new plan year.

This could help avoid a gap in coverage for a young person who has recently graduated from college or become too old to be carried on the parent’s plan under the previous rules.

Second, if stop-gap coverage is not available, watch for notice of the open-enrollment period, which will be the first opportunity for an uninsured young person to get on the parent’s plan. The open-enrollment period must last at least 30 days and start no later than the first day of the new plan year.

Finally, keep an eye out for an “offer of continued enrollment” from the insurer or employer. Once this arrives, all you’ll need to do is sign up and pay. There are no medical exams or other requirements.

The whole process will be quite simple if one or both parents have insurance through work. If you have private insurance, this might be a good time to review your coverage and costs, or to look around for a better plan.

Use the shopping tool to find affordable policies, and remember that you can reduce premiums by agreeing to a higher deductible and co-pays. That can be a good option if everyone covered by the policy is healthy, but it may be better to minimize these out-of-pocket expenses of anyone on the policy is likely to need a lot of medical care.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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