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Young adults have additional options for health insurance

Washington Post May 2, 2011

In past years, a students graduation could mean leaving behind not only the classroom but also health insurance coverage, since family plans often stopped covering dependent children once they left school.

The health-care overhaul has changed that: Adult children can now remain on their parents plan until age 26, with few exceptions. (More on that later.) But even if coverage under a family plan isnt an option, the new law has helped ensure that some of the other choices available to young adults offer better protection than they have in the past.

For many graduates, staying on their parents plan is likely to be the best option. Most employer plans have good benefit packages, says Sara Collins, a vice president at the Commonwealth Fund, a private organization that studies health-care issues. Keeping an adult child on the family policy probably wont significantly affect the premium, his or her existing conditions continue to be covered and the new graduate can keep using the same doctors.

Rochelle OSullivan is relieved that she can stay on her mothers plan after she graduates from Boston University this spring. The 22-year-old is on crutches after breaking her hip when she slipped at the airport on her way home to San Francisco for spring break in March. Having health insurance while she mends is critical. But once she kicks her job search into high gear, OSullivan doesnt want health insurance concerns to get in the way.

Im worried about getting a job, getting experience, says the mass communications major. And if that means taking a job without insurance, Id do that.

The law applies to adult children whether or not they live at home or are financially independent. Even married children can stay on their parents health policy until age 26.

The biggest wrinkle for young adults: If they take a job whose benefits include health insurance, they cant choose to stay on their parents plan.

If that job offers good coverage, thats not a problem. But new grads often take entry-level or part-time jobs, which can come with limited-benefit plans that offer low coverage limits providing little protection if they actually get sick. According to the Department of Health and Human Services, however, even inadequate, so-called mini-med policies count as insurance, and if young adults are offered such coverage, they cant be covered under their parents plans. Once the health-care law is fully implemented in 2014, mini-med plans will be phased out.

The Bryant family has been negotiating this tricky period. Kelli and Kirk Bryants oldest son, Dylan, 21, graduated last September and was working part time at a retailer while looking for a full-time job. The retailer offers a limited-benefit policy with $50,000 in coverage annually, not nearly as good as the comprehensive plan the family has through Kirks job at a hospital in Lincoln, Neb.

The retailer said Dylan wasnt eligible for its insurance, but Kelli was worried that that was a mistake and that he might be on thin ice if questions arose.