SELF-INSURED EMPLOYERS NOT REQUIRED TO OFFER YOUNG ADULT DEPENDENT COVERAGE

Coverage under a parent’s health insurance plan for an extra two years for young adults is a popular component of Massachusetts’ Health Reform law. A lesser-known aspect of the law however, is that it requires only companies that pay health insurance premiums to give the extra two years of coverage. Those companies that self-insure are governed by federal law under ERISA and are not bound by this requirement. Self-insured companies pay the health insurance companies to administer the benefit, not to insure them. Whether or not a company self-insures may not be readily apparent to the insured as they are given a card from the insurance company basically identical to those that are insured. Many large local employers are self-insured. These large companies do not have to pay the extra cost to cover dependents for those two more years. Small businesses are generally not able to take on the financial risk required to self-insure, so those companies that provide insurance to employees do have to pay the extra premiums. Parents who want to find out if their young adult children will be covered should contact their employers’ benefits office. MGH does offer this coverage to employee’s adult children.

--Adapted from: “Single-payer healthcare is the one way” By Michael Kaplan, Op-Ed, The Boston Globe, December 3, 2007 retrieved at: http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2007/12/03/single_payer_healthcare_is_the_one_way/

12/07