Below is a summary of the key points of the Dependent to Age 26 provision:
Restrictions on Plan Definition of Dependent
With respect to a child who has not attained age 26, a group health plan may not define dependent for purposes of eligibility for dependent coverage of children other than in terms of a relationship between a child and the participant. A group health plan may not deny or restrict coverage for a child who has not attained age 26 based on the presence or absence of the child's financial dependency (upon the participant or any other person), residency with the participant or with any other person, student status, employment, or any combination of those factors.
In addition, a group health plan may not deny or restrict coverage of a child based on eligibility for other coverage (except where the "special rule" applies). The "special rule" applies to "grandfathered health plans" for plan years beginning before January 1, 2014. Under the "special rule," a "grandfathered health plan" may exclude from coverage an adult child who has not attained age 26 if the adult child is eligible to enroll in an employer-sponsored health plan other than a group health plan of a parent. (See article on Grandfathered Plans).
New Enrollment Opportunity Created
A self-funded group health plan or insurer to give eligible children who were dropped from the plan due to a failure to satisfy a dependent status condition an opportunity to enroll in the plan. This new enrollment opportunity must continue for at least 30 days. Coverage must begin no later than the first day of the first plan year beginning on or after September 23, 2010, even if the request for enrollment is made after the first day of the plan year. Any child enrolling under this provision must be given the same treatment as HIPAA special enrollees: the child must be offered the same benefit packages and charged the same as similarly situated individuals who did not lose coverage.
New Written Notice Required for New Enrollment Opportunity - The new written notice explaining the new enrollment opportunity must be provided no later than the first day of the first plan year beginning on or after September 23, 2010. Note: Plans will want to send this notice well before the first day of the first plan year beginning on or after September 23 so they can avoid retroactive coverage.
When must the new enrollment period be provided? The opportunity to enroll must be provided no later than the first day of the first plan year beginning on or after September 23, 2010. The written notice of the new enrollment opportunity must be provided in a similar timeframe.
Content of Written Notice - The written notice must include a statement that children whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are eligible to enroll in the plan. The notice may be included with other enrollment materials that plans distribute to employees, provided the statement is prominent.
|
Parent Not Enrolled - If a parent is not enrolled in the plan but is otherwise eligible and a child qualifies for the new enrollment opportunity, the plan must provide an opportunity to enroll the parent, in addition to the child.
Switch Benefit Package Option - The plan must provide an opportunity to enroll the child in any benefit package option for which the child is otherwise eligible; thereby allowing the parent to switch benefit package options.
Child on COBRA - A child who qualifies for the new enrollment opportunity and is currently covered under COBRA must be given the opportunity to enroll as a dependent of an active employee.
Child Never Enrolled - Children, not yet 26, who never enrolled because they were too old under the terms of the plan must be given an opportunity to enroll.
|
Below is a Model Notice provided published on the U.S. Department of Labor website that you can use:
|
Individuals whose coverage ended, or who were denied coverage (or were not eligible for coverage), because the availability of dependent coverage of children ended before attainment of age 26 are eligible to enroll in [Insert name of group health plan or health insurance coverage]. Individuals may request enrollment for such children for 30 days from the date of notice. Enrollment will be effective retroactively to [insert date that is the first day of the first plan year beginning on or after September 23, 2010.] For more information contact the [insert plan administrator or issuer] at [insert contact information].
|
Coverage of Grandchildren not Required - The interim final rules clarify that PPACA does not require coverage of grandchildren.
Adult Child Eligible for Both Parents Plans - In the case of an adult child who is eligible for coverage under the plans of the employers of both parents, neither plan may exclude the adult child from coverage based on the fact that the adult child is eligible to enroll in the plan of the other parents' employer.
What decisions do Plan Sponsors need to be making?
|
1. What will be the effective date for the amendment? (First Plan Year beginning on or after September 23, 2010 or earlier);
2. Are you interested in adding the special rule for "grandfathered" plans (explained above)? If you are, you need to make sure that your health plan qualifies as a "grandfathered" Plan
3. Do you want to adopt the same eligibility rules for your dental or vision plan? The Dependent to Age 26 provision does not apply to "excepted benefits", such as stand alone dental and vision plans (Note: most clients so far are requesting that the same dependent coverage provisions on the Medical Plan also apply to the dental plan).
4. When do you plan on having the "special enrollment period"? We recommend that you use the 30 day period prior to the amendment effective date. For example, if the new dependent eligibility rules will go into effect on January 1, 2011, we would recommend that you use the month of November 2010 as the special enrollment opportunity period.
5. Will you change your employee contribution amounts and/or coverage levels to offset the additional risks associated with these newly eligible dependent children? For example, if you have a single and family coverage option, you might want to consider additional tiers of dependent coverage.
|
