Parents who allow their children to stay on their employer-based health insurance plans until the age of 26 will see their health insurance premiums go up nearly 1% next year, HHS announced in an interim final rule.
Rule sets premium hike of nearly 1% for young adults' coverage
The rulemaking instructs employers and insurers on how to carry out this benefit, which officially begins on Sept. 23, although most insurance plans are allowing uninsured young adults to join their parents' health plan ahead of that deadline.
According to HHS, the new benefit will cost $3,380 for each dependent, which will raise premiums by 0.7% in 2011 for employer plans. Premiums are also expected to rise by 1% and 1.2%, respectively in 2012 and 2013, although HHS expects the actual increase across the entire individual market will be smaller than these estimates.
In her blog, HHS Secretary Kathleen Sebelius said the slight premium increases are worth it and that graduating seniors and their families will get “added security in exchange for premiums that are only expected to rise by .7%.”
It's not a bad deal for insurance companies or employers either, Sebelius wrote. “Insurers will save the administrative costs that would have added up as they dropped people in May only to sign them back up in September. And businesses have already been notified that the tax exclusion for employer health benefits will apply to all the young adults who choose to stay on their parents' plans.”
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