What are the details of the requirement that group health plans and health insurers must now cover dependents on a parents plan until the dependent’s 26th birthday? Does it only allow people who are currently on their parents' plan to stay on it, or are those who are 23-25 and off their parents' plan to rejoin it? When does this go into effect?
hraper [ Moderator ]
The young adult age group tends to have a greater proportion of uninsured than do other age groups because young adults often are employed in low-wage jobs that either do not provide health insurance or provide health insurance that the young workers cannot afford. These two new provisions set a nationwide standard to require employers to cover adult children younger than age 26, and to provide a tax exclusion for this coverage until age 27, regardless of whether or not the dependent is a full-time student, disabled, or married. <?xml:namespace prefix = o ns = “urn:schemas-microsoft-com:office:office” /><o:p></o:p>
Effective date. The provision requiring dependent coverage until age 26 is effective for plan years beginning on or after Sept. 23, 2010 (six months after the date of enactment). The provision allowing a tax exclusion until age 27 is effective on March 23, 2010 (the date of enactment). Since the effective date of the bill is intended for plan years that start after Sept 23, 2010, speculation is that there is no loophole to enroll children between the ages of 23-25 before that time in an existing plan.
Intersting note: If individual pocilies are cheaper for the dependent, once secured, FSA dollars could be used to reimburse the emloyee for the actual premium in lieu of taking a tax deferred deduction from the employee’s check.