Individuals & Families Employers Brokers Physicians Health & Wellness

Dependent (Adult Child) Coverage to Age 26

Timeline of Provisions

Dependent (Adult Child) Coverage

Summary

Plans that provide coverage for dependents are required to extend the coverage of dependents (adult children) to age 26, regardless of their eligibility for other insurance coverage, effective Sept. 23, 2010. Plans must provide coverage to all eligible dependents, including those who are not enrolled in school, not dependents on their parents' tax returns, and those who are married.

Grandfathered plans (group health plans and group health insurance coverage only) are not required to cover adult children to the age of 26 if the adult child is eligible to enroll in another employer-sponsored health plan. This is in effect until the first plan renewal date on or after Jan. 1, 2014.

For grandfathered plans renewing on or after Jan. 1, 2014, coverage for adult children to age of 26 will be required even if the adult child is enrolled in another employer-sponsored health plan.

Video: Adult Child Coverage

Thanks to a provision in the Affordable Care Act, health care now runs in the family – a bit longer for dependent children. View video

For More Information

Dependent Coverage to Age 26 Provision Summary (PDF)

Frequently Asked Questions

What is the definition of "dependent" as it applies to the Patient Protection and Affordable Care Act (the Act)?

A group health plan or insurer may base eligibility for dependent child coverage only in terms of the relationship between a child and participant, and may not deny or restrict coverage based on factors such as financial dependency, residency, student status, employment or marital status. The health reform regulations do not provide a definition of "child" for these purposes.

Which types of plans need to cover adult children until age 26?

The law applies to all group health plans and issuers of group or individual insurance. This includes fully insured and self-funded plans.

Do grandfathered plans have to offer a child coverage up to age 26?

Yes, but they are not required to cover a child that is eligible for other employer-sponsored coverage. However, grandfathered plans renewing on or after January 1, 2014, are required to cover a child up to age 26 that is eligible for other employer sponsored coverage. UnitedHealthcare's position is to allow coverage for adult dependents to age 26 regardless of the customers' grandfathering status.

Is the spouse of the dependent or the children of the dependent covered?

No. Health reform does not require that the spouse of a dependent or the dependent of a dependent (grandchild) be covered. There are state laws though that require additional dependents to be covered. For example, Louisiana requires that a grandchild may be covered. So fully insured plans in those states will provide such coverage, as might self-funded groups.

Can members who meet criteria for coverage be added back to their employer group plan at the group's next renewal?

Yes, covered children under age 26 whose coverage ended, or who were denied (or were not eligible for) coverage, because the availability of dependent coverage ended before attainment of age 26 are eligible to enroll under a 30-day transition period, which may or may not coincide with the employer group's open enrollment; but must begin no later than the group's next renewal date.

Do employers that do not have an annual open enrollment still have to offer a 30-day transition period?

Yes, if they have dependents that meet the criteria described above.

Will previously terminated dependents be automatically reinstated when the plan allows coverage to age 26?

No. A previously terminated dependent will become a newly eligible dependent up to age 26. This means that, the enrollment must be submitted following standard eligibility methods (this applies whether or not they have had coverage with us in the past). In addition, if a dependent is no longer eligible for coverage, the customer/eligibility vendor should terminate the dependent's coverage.

What do employers and/or members need to do to enroll adult dependents with UnitedHealthcare?

Standard eligibility methods continue to apply (paper, portal, electronic, etc.). For employers that submit eligibility electronically we strongly recommend adult dependents be submitted as Child (CH). Student (ST) should only be used in valid student situations (beyond age 26).

Are plans required to verify student status for eligible dependents?

No.

If a dependent loses a job that provides coverage, is that a qualifying event to move to the parent's coverage?

Yes. This is a special enrollment under the Health Insurance Portability and Accountability Act (HIPAA) (e.g., loss of other coverage).

Do dependents under age 26 who lose their employer health care coverage, have to exhaust their COBRA first, or can they go right onto their parent's plan?

The Act does not state nor do the regulations address the matter directly. However, normally when a dependent loses coverage through their own employer, that dependent may enroll as a dependent because it is considered a special enrollment event under HIPAA (e.g., loss of other coverage); and the dependent does not have to enroll in COBRA or exhaust their COBRA coverage.

Can dependents who are on COBRA and are under the age of 26 enroll onto their parent's plan at renewal?

Yes.

If COBRA ends, is that a qualifying event to move to the parent's coverage?

Yes; assuming the adult child is under age 26. This is a special enrollment event under HIPAA (e.g., loss of other coverage). The regulations do provide a special transition rule that says that if a dependent is on COBRA at the rule's effective date (plan renewal beginning on or after Sept. 23, 2010), the child can re-enroll in whatever employer coverage is available to similarly situated individuals.

Do adult children or their parents need to document they have no access to other employer-based coverage prior to joining a parent's plan?

Not for UnitedHealthcare. UnitedHealthcare's position is to allow coverage for adult dependents to age 26 regardless of the customers' grandfathering status. The standard eligibility submission methods apply. (Customers may choose to require documentation from adult dependents for their files/needs, but it is not a UnitedHealthcare requirement.) Please note that for plans renewing on or after Jan. 1, 2014, grandfathered plans must allow coverage for adult dependents to age 26 even if eligible for other employer sponsored coverage.

Is coverage applicable through the age of 26, or does it end on the 26th birthday?

Coverage must be allowed to continue until the child reaches the age of 26. Sponsors of group health plans will be required to make dependent coverage available to children up until that day. Plan sponsors are free to elect more generous benefit designs, if available to them, such as covering dependents until the end of the month or even the year in which the child attains the age of 26.

Are employers allowed to alter the contribution requirement for overage dependents?

No. Dependents up to age 26 are not considered overage dependents. For dependents under the age of 26, the plan must treat dependents uniformly and may not charge more or have a different benefits structure for dependents based on age.

What are the product requirements for dependents residing outside the licensed service area/network coverage area)?

The requirement is for access to the parent's existing health coverage until age 26. There is no present requirement to build new plans to accommodate adult children who reside outside of the service area or for selecting providers outside of a plan's provider network.

Does the term adult child/dependent mean the parents still need to claim them as a dependent on their income tax return?

No. The dependent rules apply to adult dependents until they reach age 26, with no requirement that dependent be tax dependent.

If an adult child does not meet tax dependent requirements, is the value of coverage treated as imputed income to the subscriber, or dependent that accesses coverage?

No, it is not treated as imputed income under federal law. None of this, however, takes into account differing state laws on deductibility, and of course employers who choose to define dependent more broadly would still grapple with these taxation issues.

If dental and vision products are not required to follow health reform, then would a dependent enrolled in those products be considered imputed income to the employee?

No. The Internal Revenue Code (IRC) Section 105(b) exclusion applies to any "accident or health plan" (including dental, vision, FSA) regardless of whether the Act mandates apply.

Are the benefit changes based on the group's Employee Retirement Income Security Act (ERISA) renewal or plan year renewal, what if the two dates are different?

UnitedHealthcare's position is to apply the benefits as of the customer's plan renewal.

From a legal perspective, "plan year" is the year designated in the plan document. The term "plan document" refers to more than the Certificate of Coverage (COC) or Summary Plan Description (SPD); it refers to the year in the document under which the plan is established/operated (in which an authorized governing body sets the plan up). If there is no year designated in the plan document, then in order of applicability look to: (1) deductible or limit year used under plan; (2) policy year; (3) employer's taxable year; (4) calendar year. However, keep in mind that UnitedHealthcare is implementing the health reform laws as of the customer's plan renewal.

Note: Groups with over 100 participants may be subject to the IRS Form 5500 obligation. Check the plan year listed on the Form 5500. If there is no plan document disclosing a plan year, but a Form 5500 was filed with the government, use the plan year listed on the Form 5500.

What if a state has a more favorable eligibility entitlement beyond the federal mandate (age 26)?

The federal health reform laws take precedence over state laws. However, some state laws mandate coverage beyond what the federal health reform laws require. For example, some states mandate coverage beyond age 26, coverage for students beyond age 26, or coverage for grandchildren. For those states, the benefits beyond the federal health reform laws must be provided for fully insured group plans and any state requirements for eligibility will be applied (i.e., full-time student, unmarried, etc.). For example, if a covered married adult dependent turns 26, he or she may not be eligible under a state mandate that offers coverage to age 27 for unmarried dependents.

Do retiree plans have to provide coverage for dependents to age 26?

No. If the plan is truly a retiree plan, then it is exempt from the health reform mandates such as the age 26 dependent coverage provision.