Regulations issued for adult child coverage to age 26

Have questions about your obligation to provide health coverage to your employees’ adult children? Good news! Interim final rules clarifying the mandate have been issued by the Departments of the Treasury, Labor and Health and Human Services (75 Fed Reg 27122, May 13, 2010). The recently enacted federal health care reform law requires that as of the first plan year beginning on or after September 23, 2010 (January 1, 2011 for calendar year plans), health plans must offer coverage to the adult children, up until they turn age 26, of enrolled employees. The new rules clarify that:

• The plan may only define the term “dependent” in terms of the relationship between the child and the participant. This means that factors such as student status, financial dependency and residency may no longer be used to establish any child’s eligibility for coverage.
• The plan must offer dependent coverage on the same terms for all children under age 26.
• The premium charged for coverage cannot vary based on the age of the child.
• The plan cannot deny coverage to an adult child under age 26 based on the child having coverage under another parent’s plan.
• The plan is not required to cover the adult child’s spouse or children.
• If an adult child qualifies for enrollment due to the new law, both the parent and the child will be considered to have had a HIPAA special enrollment right, enabling the parent to change benefit options or to enroll him or herself if not previously enrolled.
• The plan must give employees at least 30 days to enroll their adult children and must provide employees with written notice of this enrollment opportunity.

If you have questions about how this mandate affects your plan, contact your health plan advisor.