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1001 - PHSA Section 2714: Extension of Dependent Coverage

 
Implementation Status 
Statutory Text 

Summary

Amended by section 2301 of HCERA. Requires group and individual plans, including grandfathered plans, that provide dependent coverage of children to continue making such coverage available for an adult child until the child turns age 26. Does not extend to providing coverage to the child of an adult child.

Applies to grandfathered group plans in plan years beginning before January 1, 2014, only if the adult child is not eligible to enroll in another eligible employer-sponsored health plan.

#Insurance Reform

Implementation Status

 
Summary 
Statutory Text 

CCIIO has an overview of this provision and links to implementation details here, including to a list of regulations and guidance and fact sheets and FAQs as well as other resources.

2010

In an April 27, 2010, press release and accompanying Notice, the IRS noted that effective March 30, 2010, “health coverage provided for an employee’s children under 27 years of age is now generally tax-free to the employee.”

A May 13, 2010, interim final rule implemented these requirements regarding coverage of dependent coverage of children who have not attained age 26.

2013

On August 19, HHS announced a video content it is co-sponsoring with the Young Invisibles seeking entries that educate young Americans about ACA coverage options. Several parameters the videos can address, among others, include availability of coverage under a parent’s plan to age 26 and Marketplace coverage options. More details are available in an August 22 Federal Register Notice.

On September 17-18, DOL held webinars on ACA compliance; they are available in archived form, and registration is required. In the first call, DOL discussed final regulations on employer wellness programs, while Treasury presented on the employer mandate. In the second call, DOL discussed the ACA requirement to provide employees with a Notice of Marketplace Coverage Options, and HHS presented on Marketplaces and SHOPs.

On October 29, OPM released a final rule codifying changes to FEHBP regulations that, pursuant to this section, enable young adults to remain on parents’ plans up to age 26, consistent with the program’s current policy (as noted in the July 2012 proposed rule). Indicating that the regulation is finalized as proposed with several changes, OPM says the “most significant change…is that eligibility for the children of same-sex domestic partners is limited to those states in which same-sex couples are unable to marry.” The rule takes effect on Jan. 1, 2014.

2015

On Jan. 30, SAMHSA released a report that evaluates how the ACA has impacted coverage and treatment of behavioral health for young adults.

In a Mar. 10 blog post, AHRQ Director Richard Kronick discussed research findings that fewer young adults are relying on hospital emergency departments for care and credited the ACA allowance for those ages 19-25 to remain on a parent’s plan.

On Mar. 16, HHS released a report estimating that 2.3 million were able to remain on parents’ plans since 2010

Statutory Text

 
Implementation Status 
Summary 

‘‘SEC. 2714 [42 U.S.C. 300gg–14]. EXTENSION OF DEPENDENT COVERAGE. ‘‘(a) IN GENERAL.—A group health plan and a health insurance issuer offering group or individual health insurance coverage that provides dependent coverage of children shall continue to make such coverage available for an adult child until the child turns 26 years of age. Nothing in this section shall require a health plan or a health insurance issuer described in the preceding sentence to make coverage available for a child of a child receiving dependent coverage. [As revised by section 2301(b) of HCERA] ‘‘(b) REGULATIONS.—The Secretary shall promulgate regulations to define the dependents to which coverage shall be made available under subsection (a). ‘‘(c) RULE OF CONSTRUCTION.—Nothing in this section shall be construed to modify the definition of ‘dependent’ as used in the Internal Revenue Code of 1986 with respect to the tax treatment of the cost of coverage.

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  • VIII-Community Living Assistance Services and Supports (CLASS ACT)
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