Covering children under health insurance to age 26, probably no additional cost to many parents

Many people raise the question as to whether an adult child newly eligible to enroll in a parents health insurance as provided for under the health reform legislation must pay an additional premium to enroll.

The best we can determine, the answer is no. The intent of Congress is for such adult children to be added to the parents existing coverage. So, if the parent already carries family or parent and child coverage there should be no additional cost to add these children. If the parent carries only husband and wife coverage then conversion to family coverage may require an additional premium payment.

This position is further reinforced because the IRS rules are changed to avoid imputed income to these children for the value of the coverage.

The other side of the coin is that group employee benefit plans will see some increase in their costs to reflect this additional coverage and may incur a small degree of adverse selection under the assumption that children enrolled will be inclined to have claims. However, this should be minimal given there is no additional cost to the parent (employee) or the child in many cases and thus a broader range of children will enroll.

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