Ask the Expert: Laws covering health plans

Your March 12 column stated that in New York, COBRA eligibility has been extended from 18 months to 36 months. But aren't some employers exempt from this law and from other state insurance laws? 

New York's laws apply to all insurance policies sold in the state. But some employers self-insure instead of buying policies. Although subject to federal laws, they're exempt from state laws. However, some self-insured employers voluntarily comply with New York's 36-month COBRA law.

Discrepancies between federal and state health insurance laws are particularly confusing with regard to extended dependent coverage for young adults.

Federal law now says all health plans that cover dependents must insure children to age 26 -- and it requires employers to subsidize the cost of this extended coverage at the same rate as they subsidize other dependent care. By contrast, New York law says all policies that cover dependents must do so through age 29, but lets employers decide whether to subsidize the extended coverage.

The New York law gives employers two choices.

Option A: Revise their existing policy to extend dependent coverage through age 29.

Option B: Keep the existing policy -- capping dependent coverage at age 21, for example -- and make separate coverage available to older dependents through age 29. There's a big difference!

With Option A, the cost of insuring kids through age 29 is shared by all employees with dependent coverage, and subsidized by the employer to the same degree as other dependent coverage. With Option B, young adults (and/or their parents) must pay the entire cost of their individual coverage in the plan.

The bottom line: If you have adult children, ask your employer how long they can be covered in your plan. If you lose your job, ask if you can obtain COBRA for up to 36 months.

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