Tuesday, March 23, 2010

Dependent children coverage changes

I have a son who ages out of my private health insurance plan at the end of next month. For personal reasons, I would not object to a boost in the age limit. One of the provisions under Section 1001 of the Senate health care reform bill (H.R. 3590) that the President signed into law today provides that
(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 (who is not married) 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.
(b) REGULATIONS. The [Health and Human Services] 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.
Section 1004 of the Senate bill states that this change shall take effect for plan years beginning on or after the date that is 6 months after the date of enactment of this Act, today March 23, 2010. Consequently, this change will not apply to the FEHB Program until January 1, 2011. (Oddly in a 2000+ page bill, Congress failed to amend the FEHB Act's dependent definition which ages out unmarried dependent children at age 22 (unless the adult child is totally disabled (5 U.S.C. Sec. 8901). I am confident that this oversight will be remedied before January 1, 2011.)

A key issue left to the judgment of the federal regulators is whether and to what extent this change will be applied retroactively. My daughter, who is 19, unquestionably will receive the extension to age 26 under my private health insurance coverage. However, will her older brother, who loses coverage next month, be permitted to rejoin my plan on January 1, 2011?  This is a big issue for all health plans, not just FEHB plans.

The complications don't end there. Section 2301(c)of the reconciliation bill of amendments to the Senate bill (which the House approved on Sunday and the Senate is now considering) would delete the phrase “(who is not married)” from Section 2714. In other words, a child's marriage would no longer be a basis for terminating dependent child coverage before the limiting age if the Senate passes the reconciliation bill. This change also would take effect on January 1, 2011 for the FEHB Program.

This is a very complicated law that will take a while for everyone to digest.

1 comment:

Bob Flores said...

Do you know the status of this? I, too, have a personal interest.