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New Jersey Raises Age for Health Insurance Dependency

New Jersey now requires all health insurers in the state to raise the age limit of dependents eligible for coverage under their parents' plan to 30—the highest in the nation. Employer-based health insurance traditionally terminates dependent coverage at age 19 or upon college graduation. Young adults are a disproportionate share of the uninsured, but a generally healthy population.

The new law, effective since May, covers uninsured, unmarried adults under age 30 who have no dependents and are either state residents or full-time students. It does not require employers to contribute to coverage for young adults, and it does not apply to large companies' self-insured plans or plans issued and delivered outside of the state, even if they cover New Jersey residents. The state expects about 200,000 young adults to receive coverage under the new law.

Under the bill, signed by former Governor Richard Codey, the cost of the extended coverage is capped at 102 percent of the premium previously paid for that dependent's coverage prior to them aging out. There are concerns that the law could make employer group coverage more expensive, or make dependent premium rates unaffordable. Estimates for the additional amount parents would pay for premiums to cover their adult children vary greatly, ranging from $1,200 to $6,000 annually. Connecticut, Kentucky, Massachusetts, and New York are considering similar measures, and other states, including Colorado, Illinois, New Mexico, South Dakota, Texas, and Utah, have all expanded dependent coverage to 24- to 26-year-olds in recent years.

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