May 7, 2010
Healthcare Reform - Will Your Firm Be Ready?
~ written by Char Sutek, Employee Benefits, Willis
Plans that cover dependent children must make health coverage available for such children until they reach age 26. (In other words, eligibility for employees’ children may end at the attainment of age 26.) The law does not mandate coverage for dependent children, but if any child of an employee is eligible, then eligibility must be extended until the child turns age 26.
It is clear that a plan cannot condition eligibility on a child being unmarried or being a full-time student. It’s not clear whether a plan can impose other requirements (e.g., residing with the employee, financial dependence, etc.). We hope to get clarification on this before the effective date.
Although eligibility for employees’ children generally must continue until age 26, grandfathered plans may exclude some of these children. Until the start of the 2014 plan year, a grandfathered plan may exclude any child who is eligible for other employment-based coverage. (In other words, until 2014, grandfathered group health plans need only cover employees’ children that do not have another source of employer-sponsored coverage.)
There is no requirement for employer plans to cover the children or spouses of covered dependent children (e.g., a worker’s grandchild or son/daughter-in-law).
Health benefits provided to an employee’s adult children until the end of the year in which they turn age 26 are nontaxable regardless of dependent status. This does not make these children dependents for other purposes if they would not otherwise qualify, however.
For more information on how health care reform could affect your firm benefits plan, attend the Willis Sponsored luncheon on May 12 at noon at the Columbus Bar. RSVP to Char Sutak at email@example.com or 614/326.4907.