Health Care Reform Changes to Dependent Coverage for Adult Children Cause Confusion



The Patient Protection and Affordable Care Act (PPACA) includes a provision that changes the age limit of dependent children to whom health plans must offer dependent coverage. PPACA states that as of September 23, 2010, group health plans and health insurance issuers that offer dependent coverage of children will be required to continue to make coverage available for an adult child (who is not married) until the child turns 26 years of age.  Plans do not have to offer coverage to a child of a child who is receiving dependent coverage.  However, the Healthcare and Education Reconciliation Act of 2010 made the following changes to the dependent coverage provision (Section 2714) of PPACA:

  1. It deleted the phrase "who is not married", so plans must continue to offer coverage to adult dependents up to age 26, even if the dependent is married.
  2. It made the dependent coverage extension applicable to grandfathered health plans, with the exception that, for plan years beginning before January 1, 2014, they will not have to extend coverage for the adult dependents referred to in the new provisions if the adult child is eligible to enroll in an eligible employer-sponsored health plan other than the grandfathered plan in question.

Even though the age extension is not mandatory until September 23 of this year, Secretary Sebelius has been encouraging insurers to begin implementing this coverage practice now instead of waiting until the fall.  According to the National Conference of State Legislatures, as of Tuesday, April 20, the following insurers have announced that they will begin closing the gap before the fall:  Blue Cross Blue Shield, Humana, Kaiser Permanente, United Healthcare and Wellpoint.

Cowan has been following the insurance carriers to see if they will comply with these new requirements early. Some insurers that will comply prior to the deadline are still undecided on when they will comply as well as the specifics of how they will comply.  For example, it is unclear whether or not it is required that fully-insured group health plans offer the extended definition of dependent up to age 26 prior to the September implementation date.  This is what we know thus far:

  • United Healthcare (UHC):  Effective April 19, 2010, UHC will extend the health coverage that graduating college students currently have under their parents' fully-insured UHC plan until the new PPACA requirements take effect.  This excludes dependents not currently enrolled in their parents' UHC plan.
  • BlueCross BlueShield:  Effective June 1, 2010, for fully-insured plans BlueCross BlueShield of TN (BCBS of TN) will allow covered individuals under age 26 to remain on their parents' policy.  This excludes dependents not currently enrolled in their parents' BCBS of TN plan.  More changes are expected to be announced soon.
  • Aetna:  Aetna has stated that it intends to cover dependents up to age 26 prior to the fall deadline, but it has not released any details yet.
  • CIGNA:  CIGNA is currently considering whether or not they will comply before the September deadline.
  • Humana:  Effective April 19, 2010, for fully-insured plans Humana will allow covered individuals under age 26 to remain on their parents' policy.  This excludes dependents not currently enrolled in their parents' Humana plan.
Cowan is still seeking clarification on how insurers will handle the new provision.  Your account manager will notify you of any updates that affect your plan.