The Impact of PPACA on Employment-Based Health Coverage of Adult Children to Age 26

The Patient Protection and Affordable Care Act (PPACA) enacted March 23, 2010, requires that group health plans and insurers make dependent coverage available for children until they attain the age of 26, regardless of tax or student status, or dependent status as it relates to financial support. The mandate to offer coverage to adult children ages 19-25 took effect for policy years that begin on or after Sept. 23, 2010, but since January is the beginning of the plan year for most employment-based health plans, many insurers adopted the requirements of the law before the effective date. This paper reviews the evidence as to whether the mandate to extend coverage to adult children had an effect on the percentage of young adults with coverage in late 2010 and early 2011. Data from the Census Bureau’s Current Population Survey (CPS) and Survey of Income and Program Participation (SIPP) are examined, as well as data from the Center for Disease Control’s National Health Interview Survey (NHIS). According to data from the CPS, the percentage of persons ages 19-25 with employment-based coverage as a dependent increased from 24.7 percent in 2009 to 27.7 percent in 2010. SIPP shows that the percentage of individuals ages 19-25 with employment-based health coverage as a dependent averaged 26.9 percent during January-September 2010, and increased to an average 27.1 percent during October and November. According to data from the NHIS, the percentage with private insurance increased from 51 percent to 55.8 percent, and the percentage uninsured fell from 33.9 percent during 2010 to 28.8 percent during the first half of 2011 among those ages 19-25. Data from these three surveys show that PPACA has had a positive effect on the percentage of young adults with employment-based coverage as a dependent. The PDF for the above title, published in the January 2012 issue of EBRI Notes, also contains the fulltext of another January 2012 EBRI Notes article abstracted on SSRN: “Spending Adjustments Made By Older Americans to Save Money.”