Saving You Money For Life

A year ago New Jersey enacted a groundbreaking new law to extend parents’ health coverage to “kids” up to age 30. Contrary to expectations, its impact has been marginal.
State insurance officials estimate that 6,250 young people have become insured because of this policy — a fraction of the 100,000 expected. Meanwhile, as many as 500,000 people younger than 30 are in need of coverage.

Most group health policies end coverage when children turn 19 or, if they are in college, at 22 or 23. The New Jersey law makes coverage available until the adult child turns 30. Insurance broker David Oscar says it sounds like a good idea, but “in the practical world, it’s a nightmare” because each insurer implemented it differently. Brokers working through his agency sell insurance to 11,000 small businesses statewide, but “I don’t believe we’ve done more than 100 kids,” he said.

Reasons cited for the slow uptake include:

* Few potential customers know about it.

* Insurers have been slow to work out the details. Some have not allowed enrollment until a company’s annual renewal date.

* Several conditions must be met for eligibility. A dependent must be unmarried, for example, have no dependents and — unless a full-time student — live in New Jersey.

* Many employers are not affected by the state law because they self-insure or buy coverage in another state. The law applies only to employers whose insurance is regulated by New Jersey, not those subject to federal regulation or regulation in another state.

Finally, the premiums — between $2,300 and $3,300 a year — are still too high for many prospective customers. “Think of when you were 22 or 23,” said Brad Greenbaum, state president of the underwriters association and head of Fairfield-based Approved Management Concepts. “Your first apartment in northern New Jersey costs $1,800 a month. You lease a car for $300 a month. Now you’re choosing between the cable TV package and health insurance. You’re going to go with the cable package!”

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