SUMMARY
The legislature revised the private health insurance coverage requirements for children in 2007 (See, PA 07-185, §§ 15-17, as amended by PA 07-2, JSS, §§ 64, 65, and 69).
Under the new law, a child' s health insurance coverage under an individual policy must continue at least until the policy anniversary date on or after the date the child marries or turns age 26, whichever occurs first. Group comprehensive health care plans must (1) extend coverage eligibility to unmarried children living in Connecticut who are under age 26 and (2) provide the option for a child to continue coverage to the end of the month following the month in which the child marries or turns age 26. For individual policies and continued coverage under a group comprehensive plan, the child must live in Connecticut or, if residing out-of state, must do so (1) as a full-time student at an accredited school of higher education or (2) with a custodial parent pursuant to a child custody determination. The law eliminates the requirement that the child be dependent on the policyholder or covered employee.
The new requirements are effective January 1, 2009.
INDIVIDUAL HEALTH INSURANCE POLICY>>
New Law
Under the new law, a child' s coverage under an individual health insurance policy is prohibited from ending before the policy anniversary date on or after the date the child marries or turns age 26, whichever occurs first.
To be eligible for coverage, the child must live in Connecticut or, if residing out-of state, must do so (1) as a full-time student at an accredited school of higher education or (2) with a custodial parent pursuant to a child custody determination.
The law is effective January 1, 2009. It applies to individual health insurance policies delivered, issued, amended, or renewed on or after that date that cover:
1. basic hospital and medical surgical expenses,
2. major medical expenses,
3. accidents,
4. limited benefits, and
5. hospital or medical services, including HMO contracts.
Prior Law
Under prior the law, which remains effective until January 1, 2009, a child' s coverage under an individual policy is prohibited from ending before the policy anniversary date on or after whichever occurs first: the date the child (1) marries, (2) is no longer dependent on the policyholder, or (3) turns age 19 or, if a full-time student in an accredited school of higher education, age 23.
GROUP COMPREHENSIVE HEALTH CARE PLAN>>
A “group comprehensive health care plan” is a plan that each group health insurance carrier (i. e. , insurance company, HMO, hospital or medical service corporation, and fraternal benefit society) must offer in the state. It must contain certain minimum standard benefits set in law, including coverage continuation rights (CGS § 38a-551, et seq. ).
New Law
Under the new law, the people eligible for coverage under a group comprehensive plan must include an eligible employee' s unmarried children who are under age 26 and living in Connecticut.
Additionally, the plan must offer a child the option to continue coverage to the end of the month following the month in which the child marries or turns age 26, provided the child lives in state or, if residing out-of-state, is doing so (1) as a full-time student at an out-of-state accredited school of higher education or (2) with a custodial parent pursuant to a child custody determination. (By law, a child choosing to continue coverage may be required to pay up to 102% of the entire premium at the group rate. )
The law is effective January 1, 2009.
Prior Law
The prior law, which remains effective until January 1, 2009, requires group comprehensive plans to extend eligibility to each eligible employee' s dependent unmarried children who are under age 19, or, for full-time students at accredited schools of higher education, under age 23 (CGS § 38a-554(a)).
It also requires the plan to offer a child the option to continue coverage until the end of the month following the month in which the child (1) marries, (2) ceases to be dependent on the employee, or (3) turns age 19, whichever occurs first, except that if the child is a full-time student at an accredited school of higher education, the coverage may be continued while the child remains unmarried and a full-time student, but not beyond the month following the month in which the child turns age 23 (CGS § 38a-554(b)(5)).
Every month, $500 is automatically deducted from Hillje's account to go to HSA Bank. From that account, he pays a premium for a family health plan with a high deductible, while the remainder awaits spending on medical needs and grows from year to year if there is anything left at the end of the year.
While Americans and the medical community have been a little slow to take up the idea of a health savings account, or HSA, as a way to control medical costs, flexibility and tax-friendly changes to how HSAs work are getting people's attention.
There are about 10 million people enrolled in so-called "consumer-driven health plans," and about 6 million of those are health savings accounts. The U.S. Treasury Department estimates that 25 million to 30 million people will be enrolled in an HSA by 2010.
Laws passed late last year allow an individual to contribute up to $2,850 a year to an HSA and to allow a family to contribute up to $5,650
Although that's up only slightly from last year's allowance of $2,700 per individual and $5,450 per family, it comes with the advantage of being fully tax-deductible. In previous years, only the amount of the health plan deductible could be written off. Deposits can be spread out throughout the year, but taxpayers also can take advantage of fully funding an HSA before April 17 for a break on their 2006 taxes.
"I think HSAs are the greatest thing since sliced bread," said insurance broker Kevin Cooley of San Antonio's Integrated Health Plans. "Most clients who are open to the HSA idea are self-employed, and they have a different view on money."
That view is one of watching every dollar and weighing options more carefully than workers with company-provided health benefits, low co-payments and a low deductible.
HSAs mean more out-of-pocket expenses than traditional insurance because of the high deductible; but for those without coverage, putting any amount toward tax-free health savings "is still better than no coverage," Cooley said.
A family health plan in San Antonio with a $1,500 deductible and 20 percent co-payments to health providers would cost $1,020.69 a month, under one illustration Cooley provided. That can be a tough nut to crack every month for most families.
But with a health savings account and a higher deductible of $5,650, the same family would pay $322 a month in premiums and any money not spent out of the HSA would roll over into the next year.
Managing those savings also is becoming more sophisticated.
United Healthcare's Golden Rule Insurance Co., one of the pioneers in the HSA field, recently launched mutual fund investment options that provide higher returns on health savings that go unused. After the savings account balance reaches $2,000, excess amounts can be invested into one or more of eight no-load mutual funds.
Golden Rule spokeswoman Ellen Laden said another advantage to the new HSA rules includes a one-time transfer from an IRA to help fund an HSA. This is especially useful for early retirees who are no longer covered by employer-based plans and aren't old enough to qualify for Medicare.
The law also allows money to be moved from a flexible spending account — the use-it-or-lose-it part of many employer-based plans — to an HSA.
Laden said about one-third of people signing up for health savings accounts with high-deductible plans were previously uninsured.
In Texas, Golden Rule found that most of their HSA clients were self-employed or a husband-and-wife business, followed by part-time workers and farmers and ranchers.
Long-term-care insurance premiums also can be paid out of HSA accounts beginning this year.
"There are young families that are concerned about the braces and the eyeglasses with the HSA," Laden said. "But there are older people who are worried about who is going to take care of them."
The growing use of the accounts is prompting new forms of banking to deal with unexpected expenses.
For example, if a person has made one contribution to the savings account at the beginning of the year, but gets hit with a big deductible right away, it can create problems, said Bart Halling, vice president for consumer-driven health products at Fiserv.
That could create a market for specialty lending against future HSA contributions, he said.
"My call to action on the consumers' side is to have a little bit longer horizon on planning for health care expenses," Halling said. With traditional health plans, "people are used to planning in nice one-year blocks." With HSAs, they need to plan for larger expenses before a health event, he said.
Hillje said the health savings account has made him think differently about medical expenses.
"The HSA has just made it more workable for a self-employed person," Hillje said. And because the first few thousand dollars of medical expenses each year will come out of his pocket, he says the family is more cautious about how they use the health care system.
The family still goes for regular doctor visits at provider network discounts to stretch their dollars further, and preventive medicine remains the way to control costs down the line.
"We don't just run to the doctor every time somebody has a cold," Hillje said. "It makes you really think, 'Do we need to go?'"
tpoling@express-news.net
More and more insurance companies are making the purchase of individual health plans easier by placing links on agent websites. Prospective insurance buyers can visit websites, such as this one, and click on a link that will bring them to the individual health carrier's automated enrollment site. Here the consumer can view plans and their benefits, as well as get instant quotes and apply for coverge online. Currently the option of applying online is available from Anthem, ConnectiCare, Golden Rule, Aetna, Time, and Celtic.
Also, currently you can download forms and information required to apply for coverage from these carriers.
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