N.J. to let twentysomethings tap parents' health plans
USATODAY
Published: Friday, March 17, 2006
On your 18th birthday, you can buy a pack of smokes. Make it to 21 and you can belly up to the bar. Retirement at 65 was standard until the age was raised for future retirees.
Life is full of milestones marked by age. Now, New Jersey is giving residents an extra decade to reach another significant one: when to acquire your own health insurance.
A new law effective in early May will require health insurers to allow twentysomethings to piggyback on their parents' plans, extending current coverage by more than 10 years.
Existing rules let children as old as 19 or 23, if a full-time student remain on their parents' insurance as a family member. The new guidelines extend the coverage, but the dependent must buy his or her share of the premium.
The only restrictions are that the dependents have to be unmarried, have no children of their own, have no other insurance plan and must reside in New Jersey but they aren't required to live at home with their parents.
That's awesome, 20-year-old Lauren Stafford said of the change. It would make a huge difference in things for me, make things easier.
Stafford, a retail worker at the Hamilton Mall in Mays Landing, said not feeling forced to settle into a career path just for the sake of having health insurance would mean more time to sort out what she wants to do.
I'm supposed to be starting college soon, and really I'm doing it now because I don't want to lose the insurance, she said, referring to the coverage she gets under her parents' plan. It would take a little pressure off, because I need it, but I can't afford my own insurance.
And buying into her parents' plan would likely cost less than paying for the limited-coverage insurance offered at her current job, Stafford said.
State Assemblyman Neil Cohen, D-Union, who sponsored the so-called 18-to-30 bill, said that's the idea behind the change.
The individual plan is really a dying market. People especially young people are not going to buy their own health insurance, especially not at $5,000 to $7,000, Cohen said. In talking with the insurance industry, I told them we need something to draw younger people in, but at a much-reduced cost. And then it came to me: What if we treated them all as if they had been in college covered under their parents?
Cohen said most projections put the buy-in cost between $1,200 and $2,000 per year. As many as 200,000 New Jersey residents could be eligible for the program.
If you think about it, most of that's going to be revenue for the insurance companies anyway. We're talking about a large group of people that make relatively few claims. But this gives them the protection they need in case something happens, Cohen said.
Six states have recently extended coverage to dependents between ages 24 and 26, and others are said to be considering bills similar to New Jersey's.
In her second week at a new job, 19-year-old Erin Dickerson said health insurance is a concern right now.
I have to wait 90 days to get insurance here, but I'm starting school soon so I might not make the 40 hours I need to keep it. If I'm not in school full time, I could lose my parents' insurance, she said. I do worry about it.
Insurance companies and industry experts contacted about the change offered little comment, citing a lack of guidance from the state Department of Banking and Insurance, or DOBI.
We're in a wait-and-see mode right now until the rules are set. But as far as opening up insurance to a population that might not already have it, that's certainly a good thing, said Thomas Rubino, a spokesman for Horizon Blue Cross Blue Shield of New Jersey.
The DOBI has said only that insurers must offer the extended coverage beginning May 12, and that the companies must come up with a rate plan for the dependents that reflects the cost of adding an adult to a family coverage plan.
We have until May 12 to issue the rules and we'll have them ready by that time, a spokesman for the agency said.
Cohen said he couldn't see why anybody would argue against the change.
It doesn't cost the employer anything because it's being paid for by the parent. It doesn't cost the business community a single penny. The state isn't paying anything for it. You're creating a new source of revenue for insurance companies. I really do believe it's a home run, he said.
N.J. to let twentysomethings tap parents' health plans
By J. STAAS HAUGHT Staff Writer, (609) 272-7253
Published: Friday, March 17, 2006
Updated: Friday, March 17, 2006
On your 18th birthday, you can buy a pack of smokes. Make it to 21 and you can belly up to the bar. Retirement at 65 was standard until the age was raised for future retirees.
Life is full of milestones marked by age. Now, New Jersey is giving residents an extra decade to reach another significant one: when to acquire your own health insurance.
A new law effective in early May will require health insurers to allow twentysomethings to piggyback on their parents' plans, extending current coverage by more than 10 years.
Existing rules let children as old as 19 or 23, if a full-time student remain on their parents' insurance as a family member. The new guidelines extend the coverage, but the dependent must buy his or her share of the premium.
The only restrictions are that the dependents have to be unmarried, have no children of their own, have no other insurance plan and must reside in New Jersey but they aren't required to live at home with their parents.
That's awesome, 20-year-old Lauren Stafford said of the change. It would make a huge difference in things for me, make things easier.
Stafford, a retail worker at the Hamilton Mall in Mays Landing, said not feeling forced to settle into a career path just for the sake of having health insurance would mean more time to sort out what she wants to do.
I'm supposed to be starting college soon, and really I'm doing it now because I don't want to lose the insurance, she said, referring to the coverage she gets under her parents' plan. It would take a little pressure off, because I need it, but I can't afford my own insurance.
And buying into her parents' plan would likely cost less than paying for the limited-coverage insurance offered at her current job, Stafford said.
State Assemblyman Neil Cohen, D-Union, who sponsored the so-called 18-to-30 bill, said that's the idea behind the change.
The individual plan is really a dying market. People especially young people are not going to buy their own health insurance, especially not at $5,000 to $7,000, Cohen said. In talking with the insurance industry, I told them we need something to draw younger people in, but at a much-reduced cost. And then it came to me: What if we treated them all as if they had been in college covered under their parents?
Cohen said most projections put the buy-in cost between $1,200 and $2,000 per year. As many as 200,000 New Jersey residents could be eligible for the program.
If you think about it, most of that's going to be revenue for the insurance companies anyway. We're talking about a large group of people that make relatively few claims. But this gives them the protection they need in case something happens, Cohen said.
Six states have recently extended coverage to dependents between ages 24 and 26, and others are said to be considering bills similar to New Jersey's.
In her second week at a new job, 19-year-old Erin Dickerson said health insurance is a concern right now.
I have to wait 90 days to get insurance here, but I'm starting school soon so I might not make the 40 hours I need to keep it. If I'm not in school full time, I could lose my parents' insurance, she said. I do worry about it.
Insurance companies and industry experts contacted about the change offered little comment, citing a lack of guidance from the state Department of Banking and Insurance, or DOBI.
We're in a wait-and-see mode right now until the rules are set. But as far as opening up insurance to a population that might not already have it, that's certainly a good thing, said Thomas Rubino, a spokesman for Horizon Blue Cross Blue Shield of New Jersey.
The DOBI has said only that insurers must offer the extended coverage beginning May 12, and that the companies must come up with a rate plan for the dependents that reflects the cost of adding an adult to a family coverage plan.
We have until May 12 to issue the rules and we'll have them ready by that time, a spokesman for the agency said.
Cohen said he couldn't see why anybody would argue against the change.
It doesn't cost the employer anything because it's being paid for by the parent. It doesn't cost the business community a single penny. The state isn't paying anything for it. You're creating a new source of revenue for insurance companies. I really do believe it's a home run, he said.
During the first year of the program, until May 12, 2007, qualified dependents can sign onto their parents' plan at any time. After that, access would be set by the insurance company's open enrollment period.
During the first year of the program, until May 12, 2007, qualified dependents can sign onto their parents' plan at any time. After that, access would be set by the insurance company's open enrollment period.
