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November 12, 2009

Pitt extends health insurance option

University employees who want to take advantage of a new state law that will allow them to add qualifying children under age 30 to their health insurance plan will need to apply through the Benefits department before Dec. 31 in order to receive coverage when the new benefit takes effect Jan. 1.

Otherwise, unless there is a qualifying change in status, participants would need to wait until next spring’s open enrollment period for coverage that would take effect in the upcoming plan year that begins July 1, 2010.

The option applies only to health plan coverage, not vision or dental care, according to Pitt’s Benefits office.

Senate Bill 189, signed into law last June and now known as Act 4, allows uninsured, single adult children up to age 30 to be covered by a parent’s health insurance plan, at the parent’s expense.

To qualify, the adult child must not have dependents of his or her own, must either live in Pennsylvania or be a full-time student, and be unable to get coverage through an employer or government program.

In a statement made at the time he signed the bill, Gov. Edward G. Rendell said the law would be “the answer to the prayers of parents whose kids will be graduating from college and will be kicked off their health insurance policies because they’ve reached the maximum age.

“Parents and kids are stressed because the kids are now uninsured and are having trouble finding jobs with health insurance, due to the current economic situation,” Rendell stated.

According to a 2008 state insurance department survey, the 19-29 age group accounts for 40 percent of Pennsylvania’s uninsured population. The survey estimated that there are more than 383,000 uninsured Pennsylvanians in that age range.

Employers are not required to offer the benefit, according to the governor’s office.

Pitt director of Benefits John Kozar said employees began inquiring about the coverage even before the state legislation was passed last June and interest has continued.

He estimated that Pitt’s health insurance  currently  covers 22,000-23,000 people through 11,000 employees. Roughly 10 percent of Pitt employees don’t opt for University coverage, he said, noting that Benefits has received some inquiries from employees who don’t currently participate in the Pitt health plan, but may be swayed by the new option.

Kozar said that employees who don’t currently participate in the health plan could opt in now, if they want to cover a qualifying adult child.

“We would consider that a family status change,” he said.

Among those who could benefit from the plan are parents of young adults who graduate from college, then find themselves uninsured. Currently, they may opt for COBRA coverage, which for Pitt’s Panther Gold plan would cost a single person almost $400 a month to continue health coverage, Kozar said.

Under the new option, insured employees with family coverage would be able to insure a qualifying adult child at no extra cost. For a Pitt employee currently covered as an individual, the addition of a qualifying adult child would prompt a change to a two-adult plan, Kozar said. In that case, for Panther Gold, the employee’s monthly contribution would rise from $55 to $203 per month, a rate Kozar said likely would be tough to beat.

He said it’s impossible to know how many adult children of Pitt employees may qualify for the benefit. “We don’t track these young adults,” Kozar said, noting that there’s no way to know who in that age group may be married or have other insurance.

Employees opting for the coverage must complete the enrollment, certification and status change forms and submit them to the Benefits office by Dec. 31 along with a copy of the adult child’s current Pennsylvania driver’s license or identification card and a copy of his or her 2008 1040 tax form.

They will need to submit certification annually to the Benefits office, attesting that their adult child continues to meet the eligibility criteria.

Kozar said he doesn’t expect that adding these young adults will have a large financial impact on the University’s health plan, adding that any changes in premium rates wouldn’t be seen before the plan year that begins in July 2011.

“No one knows what the increase in utilization will be. Not us, not the insurers,” Kozar said. “The probability of it being a significant increase in utilization is very, very low.”

By the time the 2011 benefits costs are being negotiated, nine months’ worth of claims data will be available to review.

“Statistically their claims experience won’t be significant, but only time will tell,” Kozar said.

Tony Benevento, vice president for commercial products at UPMC Health Plan, said it indeed is too early to gauge the impact of Act 4 on health insurance costs. He said it is not yet known how many employer groups in the health plan will choose to offer the option.

“Because it would mean an additional cost in a time when many employers are concerned about trying to hold down health insurance costs, we do not believe a large number of groups will choose to do it, but it is too early to say. It will be entirely up the employer to decide,” Benevento said.

Kozar said Pitt is choosing to offer the benefit “because it’s the right thing to do.” At the same time, the University will pay attention to controlling costs should the change significantly add to utilization of the health plan, Kozar said. If necessary, a new rate category for such users, with a different employee contribution, might be considered.

The Benefits office is developing the new forms that will be required and is compiling additional information to post online at

—Kimberly K. Barlow

Filed under: Feature,Volume 42 Issue 6

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