Illinois Student Health Insurance

Illinois Gov. Rod Blagojevich recently used his executive power to raise the cutoff age for insuring employees’ children to 26. Student health insurance will not be necessary for many young adults.

Starwalt, a Sherman resident and state employee is happy that her daughter, Bridgette, a 20-year-old sophomore at Millikin University, won’t be cut off from Starwalt’s state health plan at age 23 — the current age limit.

Tracy Starwalt said her daughter now won’t have to interrupt her pursuit of a master’s degree in nursing to get a job with health benefits. “It is one more thing not to have to worry about,” Tracy Starwalt said.

Illinois previously had no law requiring dependent health coverage. Many employers offer insurance to dependents through their early or mid-20s, and then only if they are full-time students.

But barring a legal challenge, on June 1, 2009, Illinois will join 20 other states in requiring dependent coverage.

Most of those states passed laws to do this in the past three years, and most of them, like Illinois, require the coverage to be offered regardless of whether a dependent is a student.
Fueling the trend is the fact that young adults are the fastest-growing group of uninsured people in the United States.

These generally healthy “young immortals,” as they are called in the insurance industry, often decide not to buy private insurance after they “age out” of their parents’ insurance plans.
After college, however, recent graduates — and young workers in general — may find that health insurance is not offered at entry-level jobs or may be unaffordable.

Blagojevich set the new mandate in motion when he expanded the scope of House Bill 5285 through an amendatory veto in August. The Illinois House and Senate accepted the governor’s changes later in the month.

Jay Shattuck, executive director of the Illinois Chamber’s Employment Law Council, said the new requirement, which the chamber might challenge in court, is one of many state insurance provisions that are driving up the cost of health insurance for employers. The expansion might prompt employers to charge more for dependent coverage or drop it altogether, he said.
“We believe this will actually reduce coverage because of the cost,” Shattuck said. “Employers should not be obligated to provide insurance coverage to young adults.”

Blue Cross and Blue Shield of Illinois estimates that the law will result in its rates for employee groups rising an average of 1 percent.

But because young adults are relatively cheap to insure, state insurance regulator Michael McRaith estimates the requirement will add only 0.3 percent to the cost of an employer’s health plan.

It’s unclear whether similar mandates have led to significant cost increases in other states.
Governmental and business leaders in New Jersey and Utah, where dependent-coverage requirements have existed for several years, said they haven’t noticed a negative impact on employers.

In New Jersey, a 2005 directive that employers offer dependent coverage through age 29 resulted in 10,000 to 15,000 young adults getting coverage, according to Marshall McKnight, spokesman for the New Jersey Department of Banking and Insurance.