Policy-ish

Many Young Adults Will Wait For Health Coverage After All

The Obama administration was thrilled last month when dozens of health insurers agreed to implement early a new requirement of the health law: Young adults can stay on their parents' plans until turning 26 years old.

The move was intended to fill a gap for this spring's crop of graduating college seniors. Otherwise many would be kicked off their parents' plans, then have to re-enroll after the coverage requirement takes effect on Sept. 23.

HHS even posted the list of plans that agreed to start the benefit early on its website. But now it seems there's a proverbial fly in that ointment.

A survey of large employers finds that most aren't planning to follow the insurance companies' lead in launching the new benefit early.

The consulting firm Mercer asked 800 large employers about their plans for dealing with the new health law. It found only about a quarter planned to start the new benefit before their next renewal — which for most plans comes Jan. 1, 2011.

The largest firms — those with more than 5,000 workers — were the least likely to say they would begin the benefit before they were required to. Only 16 percent said they would implement it early.

Why does it matter what employers do compared to insurers? Well, because even though you might not realize it, your employer is far more likely to determine what your benefits are then an insurance company.

Of the roughly 160 million Americans who get insurance through their or a family member's job, about two-thirds are in what's known as a self-insured plan. That means the insurance company just does the paperwork, and the employer decides what the benefits are — and, in this case, when the new benefits begin.

And why the difference on this benefit between employers and insurers? Money, mostly, says Tracy Watts, a consultant in Mercer's Washington D.C. office.

"This change is a pretty big deal for employers, with new notification requirements, employee communication and tax implications," Watts said. "Not to mention that it would be an immediate, unbudgeted business expense."

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