It's open enrollment time and employees will be getting ready to pick their health insurance coverage for the following year. People who buy their own individual health insurance will be researching their options. And Medicare beneficiaries will be able to change their coverage later this year. As you sign up for coverage this fall, here's what to look for.

Extension of Young Adult Coverage

All health plans must permit adult children to remain on their parents' plans until age 26. It makes no difference if the young adults are married or financially independent. As long as children don't have an offer of coverage from their own employer, parents can keep them on their plan. If you want to put an adult child on your family health insurance plan, you'll be given an opportunity to do so during a special enrollment period. At most companies that will coincide with open enrollment. Even if it doesn't, insurers and employers are required to notify you of the special enrollment period. Look for that notice.

Effect of Young Adult Coverage on Health Insurance Cost

Under the law, plans can't charge more for adult children than for dependents younger than 19. But they can increase the cost of family coverage overall, and many will do so, according to an employer survey released last week by the benefits consulting firm Mercer. The survey found that more than half of employers that plan to shift more costs onto employees' shoulders will do so by disproportionately increasing the cost of family coverage compared with employee-only coverage. As part of their efforts to rein in costs, employers are also more likely than before to ask employees to verify that dependents are eligible for coverage, say experts. More than 40 percent of ineligible dependents are children younger than 19. Often the eligibility change is part of the fallout from divorce. Children may no longer live with or be financially dependent on the parent whose insurance covered them, for example, potentially making them ineligible under plan rules. Most of the time, employees are covering ineligible dependents because they don't know the rules of their plan. This can also be true for adult children on their parents' plans.

Prohibition on Coverage Exclusions for Children with Preexisting Conditions

Employer plans can no longer refuse to cover children younger than 19 because they were born with or develop a serious medical condition. The ban on coverage exclusions also applies to new individual policies purchased for a child. A similar ban on coverage exclusions for adults goes into effect in 2014.

Restriction on Annual Dollar Coverage Limits

In general, employer plans can't impose annual coverage limits of less than $750,000 for "essential" health benefits, including hospital services, drugs, emergency services and maternity and newborn care. The maximum limits increase every year and they are eliminated in 2014. These limits apply to new individual policies, too.

Additional Provisions for New Plans

• Cover the full cost of preventive services that have the highest recommendation of the U.S. Preventive Services Task Force.
• Allow women to see an OB-GYN without a referral.
• Do not make plan members pay higher co-payments or coinsurance for out-of-network emergency services

Alice Newton feels as if she just caught a break. Owner of the Newton Books in San Diego, she has been in business for 18 years. Her shop provides group health insurance coverage to seven employees. But premium increases in recent years were so astronomical that health care costs had been eating up 30 percent of the store's revenue, about $78,000 a year. She seriously considered dropping health care coverage altogether. But relief arrived in the form of an early provision of the Affordable Healthcare Law - aka ObamaCare. Beginning this year, the law provides generous tax credits to small businesses struggling to maintain health coverage.

Ms. Newton discovered her store was eligible for the full credit, which will give the business a rebate of $21,000 this tax year. So for now, the Newton Books is still in business, and Ms. Newton and her employees have kept their health insurance.
The government this year is offering a tax credit to companies with fewer than 25 full-time workers and average wages of less than $50,000 a year. To qualify, employers must pay at least 50 percent of their employees' health care premiums. Small businesses with 10 full-time employees or fewer earning an average of $25,000 or less are eligible for the largest credit, 35 percent of their health insurance premium costs. Companies with larger numbers of employees earning more receive smaller credits on a sliding scale.

If you own a small business, it might pay to familiarize yourself with the new provisions in the health care law. They may convince you that you can afford to offer health insurance or keep your existing policy in place. If you're an employee at a small company, you could learn the details yourself and make sure your employer is ready to take advantage of the coming changes. Entrepreneurs are busy and not always plugged into these kinds of administrative changes. Your input may mean the difference between getting insurance or going without.

There is no application process; the business owner simply files one additional form with the company tax return. Start pulling together the figures now, though. The tax credit begins in the 2010 tax year, so the payoff will come as soon as next January.
The tax credit is set to expire in 2016, on the assumption that by then most small businesses will have made the transition to the insurance exchanges, where policies will be more affordable and premium costs will be the same for all participants. Small businesses will have even greater tax benefits once the new state health insurance exchange - the California Health Insurance Exchange - is up and running in 2014. The maximum tax credit will increase to 50 percent at that time -- but companies must buy insurance through the exchanges to be eligible.

It may take searching, and premiums may be higher, but for some patients, choices are available.

Amy Reiley had resigned herself to joining the ranks of the uninsured. The part-time L.A. resident and owner of a boutique cookbook publishing company had a group health insurance plan that for three years covered her and another full-time employee.

But when Reiley's employee became eligible for Medicare, she lost the group policy and was left to search for insurance on her own.

Reiley, in her 30s, has a history of headaches resulting from neck spasms, which she manages with a muscle relaxant. Because of her condition, all her applications for individual health insurance coverage were denied.

"I tried two companies and looked into what the state had to offer and there really wasn't anything I could do," she says.

For people with preexisting medical conditions, looking for medical insurance in the private market may feel like the ultimate fool's errand. A 2009 report by the Commonwealth Fund found that 36% of people who tried to buy insurance in the private market were denied coverage or charged more because of a preexisting condition or had the condition excluded from their coverage. Cancer, heart disease, diabetes, rheumatoid arthritis and drug and alcohol dependency are certain to be automatically rejected by insurers -- and even people who have minor conditions may find the search for an insurance plan tricky.

When the health reform law takes full effect in 2014, health insurance companies will no longer be able to deny coverage to people with preexisting medical conditions. In the meantime, new federally funded high-risk pools for the medically uninsurable have been established. To qualify, you have to be without insurance for six months. And you must show you have applied for, and been denied, insurance in the private market.

But if you have a preexisting condition and don't qualify for the high-risk pools, it still pays to explore options in the private insurance market. Don't assume if one insurer rejects you that they all will. Reiley, for example, did try again, this time with an experienced insurance broker. Although she paid more because of her condition, she found a plan that is cheaper than what she was paying for as a member of a small group.

With proactive steps as well as insight into how insurers decide who they'll cover, you can improve your chances. Insurers also are more likely to cover someone with a clear-cut diagnosis being managed with inexpensive medications rather than a borderline case that may blow up later.