Young Adult Dependent Care Coverage Extended

Here’s another exciting update on the changes in the world of employee benefits you’ve been waiting for!

One of the improvements in our health care due to the Patient Protection and Affordability Care Act (PPACA) requires insurance carriers for medical plans to extend benefits to adult children of covered employees as a dependent until they reach age 26.

Beginning at your plan’s renewal at or after September 23, 2010 (realistically October 1, 2010), an adult “child” to age 26 (this really means the last day of their 25th year) can be added as a dependent to an employee’s plan.  If the dependent has coverage provided through an employer s/he is not qualified for this benefit.

The dependent does not have to live with their covered parent(s), does not have to be a dependent on the parent’s tax return, does not have to be a full time student and can even be married.  Spouses and children of the adult “child” do not qualify for this benefit.

The insurance carriers categorize rates as single employee, employee and spouse/domestic partner, employee and child(ren) and family which includes the employee, a spouse/domestic partner and any number of children.  If an employee adds their newly eligible adult child to their plan and they have other children already enrolled,the cost of the plan will not change.  However, if an employee has single coverage or employee and spouse/domestic partner coverage, the rates will increase when a child is added to the plan.

If an employee currently has a dependent on the plan who “ages out” (this means they have reached the maximum covered age typically 23 or 24 depending on the carrier) most of the carriers are allowing those dependents to stay on the plan even though the law does not require this until the plan renewal at or after October 1, 2010.  This early implementation was requested of the insurance carriers by The Department of Health and Human Services, Secretary Kathleen Sebelius.

Adding a dependent to a plan is a qualifying event and allows for re-election in a Flexible Spending Accounts (FSA) if such an account is offered through an employer.

To read the release from the Department of Labor, click on this link: http://www.dol.gov/ebsa/newsroom/fsdependentcoverage.html

Look for some more exciting news about health care reform in the near future.

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