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Health Insurance Coverage for Adult Dependents
August 2, 2010
What are the changes?
The Patient Protection and Affordable Care Act as amended by the Health Care and Education Reconciliation Act of 2010 includes several tax provisions that take effect this year. Two of these provisions are related to health insurance coverage for adult dependents.
The first change requires group health plans and health insurance issuers that provide dependent care coverage to continue to make such coverage available for an eligible adult child until age 26. For plans in existence on March 23, 2010, if an adult child is eligible to enroll in an employer-sponsored health plan other than a health plan of a parent, the extended coverage must be offered for plan years beginning on or after January 1, 2014. If an adult child is not eligible to enroll in an employer-sponsored health plan other than a health plan of a parent, or if the health plan did not exist on March 23, 2010, the extended coverage must be provided no later than plan years beginning on or after September 23, 2010. Coverage of an eligible adult child may not be denied or restricted based on the child's financial dependency, residency, student status, or employment.
The second major change requires employers providing health coverage to permit employees to begin making pre-tax contributions to pay for health coverage for a child under 27 years of age. Employees who have children who have not reached age 27 by the end of the year are eligible for this benefit beginning March 30, 2010. Self-employed individuals are allowed a deduction for premiums they pay for such dependent coverage.
Additionally, House Bill 1 enacted by the Ohio Congress extends coverage for unmarried, "Older Age" dependents up to age 28 if he/she meets specific eligibility criteria. To be eligible, the child must be:
- the natural child, stepchild, or adopted child of the employee,
- an Ohio resident or a full-time college student,
- not eligible for coverage if employed by an employer that offers any health benefit plan, and
- not eligible for coverage under Medicaid or Medicare.
The House Bill 1 dependent age changes are effective for policies issued or renewed and plans established or modified on or after July 1, 2010.
How do the changes affect you?
If you need assistance to determine how these changes affect you, feel free to contact your advisor at the 415 Group.
by: Holly L. Lieser
