Adult Children Annual Health Coverage Price Tag: $350K to $750K

April 27, 2010 ( – New coverage available to children of employees up to age 26 under the health reform law could cost employers with 5,000 or more employees an additional $350K to $720K per year in premiums and claims costs.

Data collected by Hewitt Associates said an estimated 5% to 10% more children could end up on their parents’ workplace policies than currently, including children age 19-23 that are not full-time students and adult children age 23-26.  Further, Hewitt’s Health Value Initiative (HHVI) 2009 database of 930 large employers indicated that dependents age 23-26 currently cost employers an average of $2,000-$2,500 per dependent, per year. 

The U.S. Census (Income, Poverty and Health Insurance Coverage in the US: 2008) reports 28.6% of people age 18-24 are uninsured, the largest uninsured group by age. Additionally, U.S. Department of Labor Bureau of Labor Statistics 2009 data shows people age 18-19 had the highest unemployment rate at 24.3% and people age 20-24 had an unemployment rate of 14.7%

“Given the option, unemployed individuals in this age range, may be more likely to seek coverage under a parent’s medical plan,” Hewitt commented.

A number of insurers recently announced they are changing their coverage policies to comply with the new law ahead of its deadline later this year (see Insurers Beat Health Care Reform Deadline on Adult Children Coverage).