On May 10, 2010, the Departments of Health and Human Services,
Treasury and Labor issued regulations interpreting the provision
under the Patient Protection and Affordable Care Act (PPACA) that
requires group health plans and insurers to offer dependent
coverage to children until they reach age 26. In interpreting this
requirement, the regulations also significantly affect the way in
which group health plans can define which minor dependent children
are eligible for coverage. These regulations will be effective for
plan years on or after Sept. 23, 2010, so employers should begin
considering how they will affect their health plan designs.
PPACA and the subsequent Reconciliation Act provide that a group
health plan providing dependent coverage for children of employees
must continue to make that coverage available for an adult child
until the child turns 26 years of age. PPACA further authorized the
issuance of regulations to define those dependents to whom coverage
must be made available.
These regulations clarify how these new coverage rules apply to
adult children. Specifically, the regulations provide:
That coverage must be available to a child of an employee until
that child attains age 26 (as of the child's birthdate,
coverage under the health plan may be terminated, subject to COBRA
A health plan is not required to make coverage available for
the child of a child receiving dependent coverage.
The terms of the health plan coverage that apply to dependent
children cannot vary based on age (except for children who are age
26 or older).
If a child previously was covered under the plan, but lost
coverage as the result of attaining the Plan's limiting age for
dependent children (and that age was less than 26 years) or if the
child was never able to enroll in the Plan due to exceeding the
limiting age at the time the employee became eligible to enroll in
the Plan, a 30 day special enrollment window must be provided as of
the first day of the first plan year to which the PPACA requirement
applies (i.e., the first plan year beginning on or after Sept. 23,
2010). In connection with this special enrollment opportunity, the
Plan must provide written notice to the employee and/or the child
explaining the availability of the special enrollment window.
Because this enrollment window is treated as a special
enrollment, the dependent child must be offered all benefit
packages available to similarly situated individuals and the
employee parent of the child would also be permitted to enroll in
any benefit package available to similarly situated employees under
As long as the child enrolls within the 30 day special
enrollment window, coverage would be effective as of the first day
of the first plan year beginning on or after Sept. 23, 2010.
While grandfathered group health plans are generally subject to
these rules for plan years beginning on or after Sept. 23, 2010,
for plan years beginning before Jan. 1, 2014, a grandfathered group
health plan is not required to make dependent coverage available to
an adult child who has not attained age 26 if the adult child is
eligible to enroll in an eligible employer-sponsored health plan
other than a group health plan of a parent.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Effective January 1, 2015, certain employers became subject to the employer mandate of the Patient Protection and Affordable Care Act, and thus subject to liability under the ACA Employer Shared Responsibility provisions.