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May 2007

States Enact New Laws to Increase Dependent Coverage

During the 2007 legislative session, four states expanded coverage by changing the definition of ‘dependent’ and extending access to insurance for young adults older than 18.


Maryland enacted legislation (House Bill 1057) allowing young adults (including child dependents of domestic partners) to remain eligible for insurance until the age of 25 if the individual resides with the insured policyholder and is unmarried. The Maryland Insurance Commissioner is required to issue regulations to implement this bill. In addition, several state agencies are jointly charged with studying the high rate of uninsurance among young adults ages 19 to 29 and, by November 1, 2007, recommending ways to increase coverage.


• In March 2007, Idaho Governor C.L. “Butch” Otter (R) signed into law Senate Bill 1105 which expands the definition of ‘dependent.’ Under the new law, unmarried non-students can remain on their parents’ insurance until the age of 21 and unmarried, financially dependent, full-time students can remain on parental insurance until the age of 25. Finally, unmarried children designated as disabled can remain a dependent for insurance purposes up until any age.


• As part of the larger health care reform activity in Washington this year, any commercial health plan offering health insurance coverage must allow the option of covering unmarried dependents up until age 25. Additional premiums may be charged to cover these young adult dependents. If the dependent meets certain disability criteria, parents may continue to cover the dependent irrespective of age for the same premium as dependents under age 20. These requirements also apply to the state employee program.


• In May 2007, Indiana Governor Mitch Daniels (R) signed into law House Bill 1678 that requires commercial health insurers and health maintenance organizations to cover dependents up until the age of 24, at the policyholder’s request.


Young adults (19-29 years old) are one the largest and fastest growing groups of the uninsured. In 2004, approximately 13.7 million young adults were uninsured. The majority of the uninsured young adults (69 percent) earn less than 200 percent of the federal poverty level (FPL). Unless they are students, dependents typically lose eligibility on their parents' or caregivers' insurance on their 19th birthday and also lose eligibility under Medicaid or the State Children's Health Insurance Program (SCHIP) unless they are students. Between 40 and 50 percent of students become uninsured during the first year following graduation from high school or college.


In response, states have pursued a number of policy options. States control the definition of dependent coverage in the commercial insurance market, the state employees' health insurance pool, and other public programs funded by state dollars. Some have changed the definition of dependents and extended it beyond the age of 18 for commercial insurance for students and non-students. Policy holders who elect to maintain coverage for adult dependents will pay additional premium. The State Coverage Initiatives Coverage Matrix Web page includes information about all states that have enacted dependent coverage reforms.