The health care limbo recent college graduates have found themselves in, between leaving their parents’ insurance plan and finding a job which covers them, will now be abolished as a new state mandate allows those under 27 years old to stay on their parents’ insurance plan.

Entering into effect this month, the new insurance mandate allows single adults under 27 years of age to stay on their parents’ policy with the most affordable option if health insurance is not available through their employer. This option is also available if the amount paid through an employer’s insurance is more than the amount someone would pay by staying on their parent’s policy.

Phil Dougherty, senior executive officer of the Wisconsin Association of Health Plans, said the goal of the mandate is to give older children a more affordable means of obtaining health insurance.

“The primary purpose is to help younger people who are in between higher education and being established in employment to retain health insurance and help them to get on their feet,” Dougherty said.

Professor Bryan Becker from the University of Wisconsin Department of Medicine said this mandate reflects a growing trend in many states to extend insurance coverage to younger adults.

Becker said the mandate represents a mutually beneficial agreement between states and insurance companies. By insuring more people, states can offset other expenses that could occur due to large populations of uninsured people. Insurance companies could also see it as a way to add more clients who have relatively few risks or pre-existing conditions.

“There is still a belief that offering this benefit has the ability to reduce the uninsured population in the U.S. for certain segments, and from the insurance perspective it’s not a huge risk,” Becker said. “It’s a societal good to reduce the number of uninsured.”

Jim Guidry from the Wisconsin Office of the Commissioner of Insurance agreed that extending coverage to younger adults is a relatively low risk for insurance companies.

“Insurance companies will be picking up a pool of individuals that historically have lower health care costs,” Guidry said. “For insurance companies, they’ll be able to collect premiums and won’t have as much in the way of medical costs as for someone who is 45.”

Although the mandate has found much support in the state, Dan Schwartzer, executive director of the Independent Business Association of Wisconsin, said there are a few problems inherent in the new law.

Schwartzer said the definition of a dependent in the new mandate conflicts with the Internal Revenue Service’s definition, which could create a complicated tax situation for employers. He said the IBA has asked legislators to revise the law so it states a dependent must be under 27 years old, or as the IRS defines a dependent.

This new law will affect many UW students, including senior Andrea Samz-Pustol who said she is planning on staying on her parents’ insurance after she graduates.

“It helps people who are kind of at the mercy of the economy,” Samz-Pustol said. “On the other hand, if you’re 27 you’re not really a kid anymore. It kind of throws grown-up responsibility out the window.”