With More Young Adults Insured, Premiums to Rise

By Ricardo Alonso-Zaldivar, Associated Press Writer

WASHINGTON (AP) — Letting young adults stay on their parents' health insurance until they turn 26 will nudge premiums nearly 1% higher for employer plans, the government said in an estimate released Monday.

The coverage requirement, effective starting later this year, is one of the most anticipated early benefits of President Barack Obama's new health care law. Many insurers have already started offering extended coverage to families who purchase their coverage directly. And employers say parents have flooded their benefits departments with questions.

The Health and Human Services Department released estimates of the costs and benefits of the requirement as part of a regulation directing employers and insurers how to carry it out.

The new benefit will cost $3,380 for each dependent, raising premiums by 0.7% in 2011 for employer plans, according to the department's mid-range estimate. Some 1.2 million young adults are expected to sign up, more than half of whom would have been uninsured.

Extended coverage will be required starting this fall, for health plan years beginning on or after Sept. 23.

Family coverage through the workplace now averages about $13,400 a year— counting both the shares paid by the employer and worker.

Many employers allow workers to keep college students on the company health plan until they graduate. But under the new law, staying in school would no longer be required.

The regulation also specifies that young adults offered extended coverage through an employer cannot be charged more than other dependents, nor can they be offered a lesser set of benefits. Instead, the cost must be spread broadly.

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