June 2010 Health Care Reform Insights, "Rules on Coverage for Children Clarified"
The Affordable Care Act (the abbreviated name for the Patient Protection and Affordable Care, the new health care reform law) contains a provision requiring group health plans that provide dependent coverage for children to continue to make such coverage available for an adult child until the child turns 26 years of age. This requirement ("the age-26 mandate") applies to all group health plans, including "grandfathered" plans (those in existence when the law was enacted).
A separate new Internal Revenue Code provision allows a group health plan to provide health coverage on a tax-free basis to any child of the plan participant through the end of the calendar year in which the child turns 26.
The Treasury Department released guidance on the tax provision on April 27, 2010. On May 13, 2010, the Departments of Health and Human Services, Labor and Treasury jointly published regulations on the age-26 mandate. This issue of Health Care Reform Insights discusses the age-26 mandate in light of the recent regulations. The following topics are addressed:
- Effective dates,
- Overview of the age-26 mandate,
- Paying for the coverage,
- Coverage requirements,
- One-time special enrollment opportunity,
- Eligible children,
- Grandchildren and legal guardianships,
- Children of domestic partners and same-sex spouses,
- Cafeteria plans and mid-year changes,
- Benefits affected,
- Interaction with Michelle's Law,
- Interaction with student health plans,
- Interaction with state coverage mandates,
- Impact on status as a grandfathered plan,
- Other coverage, and
This issue of Health Care Reform Insights concludes with a list of action steps for health plan sponsors.