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Hewitt: Many Employers To Expand Dependent Health Access Early

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About 950,000 workers will be able to get dependent health coverage for young-adult children earlier than required by the new Affordable Care Act.

Hewitt Associates L.L.C., Lincolnshire, Ill., has based that estimate on a survey of about 500 large U.S. employers with 6.9 million employees with health coverage.

About 19% of the employers will be providing early access to dependent coverage for the children of covered employees up to age 26.

About 10% of the employers will voluntarily extend coverage early for all adult children and another 9% will do so for graduating students already covered under the health plan.

The young adult dependent access mandate is set to take effect this fall.

About 77% of the employers that participated in the Hewitt survey plan to wait to extend access to health care coverage until they are required to do so. In most cases, expanded access will be available starting Jan. 1, 2011.

About 57% of the employers said they have estimated the cost of expanding dependent coverage access to adult children, and 18% of those employers expect the change to result in a plan cost increase of less than 1%.

A quarter of the companies project a 1% to 2% increase, and 11% expect costs to increase between 2% and 5%.

The typical affected employer could end up covering 5% to 10% more adult children than it does today, Hewitt says.

Employers already provide coverage for many college students ages 19 to 23.

For an employer with 5,000 employees, that the cost of covering additional adult children could range from $350,000 to $720,000 per year, Hewitt estimates.

“Employers that are choosing to extend coverage early are doing so because it earns employee goodwill, particularly when many adult children today can’t find jobs or were laid off during the recession,” says Ken Sperling, Hewitt’s global health care leader. “However, most companies are holding off on extending coverage for a variety of reasons. The cost and administrative complexities of early adoption are key factors, but it’s really about their view of access.”

Many employers believe that most adult children are healthy and can find affordable coverage in the individual market, Sperling says.


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