by James A. Woehlke, Esq., CPA
General Counsel / COO, MBL Benefits Consulting Corp.

The Patient Protection and Affordable Care Act (the ACA*) was enacted on March 23, 2010. The ACA requires that both new and grandfathered group health plans be designed to cover participants’ children up to age 26. The Administration issued guidance on this requirement in the form of interim final regulations on May 13, 2010.

Prior to the ACA, it was typical for plans to tie dependent coverage to the same rules used for tax purposes. For instance, children were covered if they met certain residency or financial support requirements, or were full-time students up to age 23. Some states, however, had mandated expanded coverage for adult children. Effective for plan years beginning after September 23, 2010, if a group health plan offers coverage to participant’s children, the ACA now requires that coverage extend until the child reaches age 26.

This change is required both for grandfathered and new plans. However, for plan years beginning before 2014, a plan is permitted to deny coverage to a child under 26 if he or she is covered by another plan, other than the plan of the child’s other parent. In other words, if the child is covered by his or her own employer’s plan or that of a spouse, the parents’ plans may exclude the child until 2014.

The regulations identify criteria which are no longer permitted in defining eligibility of children, including

  • financial dependency on the participant or primary subscriber (or any other person),
  • residency with the participant or primary subscriber (or any other person),
  • student status,
  • employment,
  • marital status,
  • eligibility for other coverage,
  • or any combination of the above.

Although, eligibility may not hinge upon a child’s marital status, there is no requirement that plans must cover spouses or children of participants’ children. The regulations also provide that the terms of the plan or policy for dependent coverage cannot vary based on the age of a child, except for children age 26 or older. Where states set a higher age or coverage requirement, as does New York, which requires plans to make coverage available to age 29, the state mandate will apply.

There are many individuals over age 23 but under 26 who lost coverage before the effective date of this ACA provision. The regulations provide transition rules for these people. They must be given notice of the opportunity to receive coverage and have an open enrollment period of at least 30 days to occur not later than the first day of the first plan year beginning on or after September 23, 2010.

If you have questions about the age 26 coverage requirement, please contact your MBL Benefits consultant or the author at jwoehlke@mblbc.com.

* For simplicity, the Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act are collectively referred to as the Affordable Care Act, or ACA.

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Additional resources available at

Official publication of interim final regulations on coverage for children to age 26: http://www.federalregister.gov/articles/2010/05/13/2010-11391/interim-final-rules-for-group-health-plans-and-health-insurance-issuers-relating-to-dependent

From the Proskauer Rose law firm, http://www.proskauer.com/publications/client-alert/health-coverage-for-children-to-age-26/

Rev. 8/30/2010.

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