That 25-year-old? He's a Dependent

Why you may soon be adding a bunch of 25-year-olds to your insurance plan.

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Call it the Peter Pan law. Six states, including Colorado and Texas, now require insurers to cover workers' dependent children into their twenties, in most cases even if they are no longer full-time students. New Jersey now covers "kids" through age 30. Traditionally, parents could put children on their employer's insurance only until they turned 19, unless they were in college. That helps to explain why 18- to 24-year-olds are the most uninsured group in the U.S. (see chart).

Some business groups have opposed these laws out of fear that they would increase costs for employers at a time when they are struggling to cope with health care expenses. California Governor Arnold Schwarzenegger cited that argument in October when he vetoed a state bill that would have extended insurance to dependents through age 26.

Though these laws do force employers to insure more people, supporters of the policy counter that most twentysomethings pay more into a health plan than they take out. Utah has covered children up to age 26 since 1995, in part to cover young Mormon missionaries. Yet premiums have remained on par with the national average.

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Kasey Wehrum

Staff writer Kasey Wehrum has written for Inc. magazine on subjects ranging from the businesses behind professional bull riding to gadget inventor and father of the infomercial, Ron Popeil. His work has appeared in the New York Times, Worth, Budget Travel, and on MSNBC.com. He lives in New York City.