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Dependent health insurance: Illinois' gift to graduates

Maryalene LaPonsie | May 21, 2010

The State of Illinois doesn't want the federal government to steal its thunder. Lately, the news has been filled with stories about how federal health care reform now allows young adults, up to age 26, to stay on their family health insurance plans. So the Illinois Department of Insurance rolled out a press release to remind everyone: Hey! We did it first!

Student health insurance in Illinois

The Illinois Young Adult Dependent Coverage Law went into effect on July 1, 2009, almost a full year before Congress pulled itself together and voted on health care reform. Under the Illinois law, young adults in the state can depend on dear old Dad and Mom for health insurance until they hit the age of 26. Should they choose to volunteer a little time for Uncle Sam, the law allows dependent coverage up to age 30 for military veterans.

While it appears the Illinois provisions are intended to provide student health insurance--after all, insurers can require that Mom, Dad and Junior share the same address--it doesn't limit coverage only to students. The only requirement is that the young adult be unmarried. Once you are hitched, your parents are off the hook for medical coverage.

How federal health reform affects Illinois residents

The federal law goes into effect on September 23, 2010. Because federal law trumps state statute, the new requirements for dependent health insurance in Illinois will be:

  • Married or unmarried young adults, up to age 26, can be listed as a dependent on their parent's health plan.
  • Young adults can no longer be required by insurers to share the same address as their parents.
  • Self-insured employers will have to offer coverage for employee children up to age 26 if their plan includes dependent care.
It appears that Illinois veterans up to age 30 can still remain on parents' insurance plans, but may be required to maintain the same permanent address as their folks.

Helping the next generation with health insurance costs

Of course, the point behind both the Illinois and federal laws is to help young adults find and maintain insurance coverage. While this group is generally the healthiest segment of the population, it is also represents one of the largest groups of uninsured Americans.

The most affordable health insurance available are group plans. However, one of the only ways to get this type of coverage is through employers. Entry level positions, often filled by young adults, do not offer insurance benefits. By extending dependent coverage, the government hopes to offer a form of temporary health insurance until young workers have established their own group coverage.

Is it a good idea? It depends on who you ask. On the one hand, critics argue that we are enabling helicopter parents to new levels of co-dependency. Others say that we are providing young adults with a needed safety net so they can start their careers and families on stable financial footing.

Either way you look at it, young adults have got themselves a pretty sweet deal.

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