Extension of dependent coverage

Applies to grandfathered and non-grandfathered plans.

Requirement overview

• Health insurance plans must offer coverage to dependents on their parents' plan(s) until the young adult turns 26.
• Coverage must be the same as for other dependents and can't cost any more.

Dependent defined

Eligible dependents: 

• Must be a son, daughter, stepson, stepdaughter, legally adopted child or eligible foster child of the employee. 
• Don't have to be living with a parent 
• Don't have to be a dependent on their parents' tax return 
• Don't have to be full-time students 
• May be married (but plan doesn't have to cover the dependent's spouse or children*)

Important notice about HSAs and dependents under age 26

The Affordable Care Act allows parents to add their dependent children (up to age 26) to their health plans, but the IRS has not changed its definition of a dependent. The IRS definition is used when determining a dependent for HSA purposes. If the account holder can't claim the child/relative as a dependent on their tax return, then they can't use HSA dollars to pay for services provided to that child/relative.

See the IRS definition of a dependent on our PriorityHSA^SM page for more information.

What Priority Health is doing

• For most groups, we allow all dependents up to age 26 to stay on their parents' health plans if currently enrolled. See more information.
• Dependent coverage for plans effective on or after 9/23/10 is extended up to the 26th birthday.
• We offer an out-of-area dependent rider to provide basic coverage for dependents on our HMO plan who live outside of Michigan (proof of out-of-state residency may be required).
• We provide a notice about the 30-day special open enrollment period in our benefit summary documents.

What you need to do

Both fully funded and self-funded employers:

• With grandfathered plans must monitor dependent eligibility since they are not required to cover a dependent if the dependent is eligible for coverage under another employer-sponsored health plan until 1/1/2014.
• Must give Priority Health accurate residency information for HMO dependents who live outside the Priority Health HMO service area. (View service area map.) Notify us if a dependent student lives outside the service area.

Our sales team will work with self-funded employers to:

• Extend coverage to dependents up to age 26 (you could end coverage at the end of the birthday month or birthday year with no tax consequences).
• Consider an out-of-area dependent rider to cover dependents living outside Michigan (EPO plans only)

Suggested text to use in your materials

Use this sample notice provided by the U.S. Department of Labor or your own text to meet the health reform requirement to tell all employees about changes to their health care coverage:

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].

Source: U.S. Department of Labor