Dependent Coverage

Government Resources
Analysis
State Taxation of Dependent Coverage

Government Resources

New Report Shows Affordable Care Act Has Expanded Insurance Coverage Among Young Adults of All Races and Ethnicities, 3/7/12 (New) 

2.5 Million Young Adults Gain Health Insurance Due to the Affordable Care Act, HHS, 12/14/11 

The EBSA, IRS and HHS have released regulations and explanatory aids on the health care reform provisions for coverage of adult children up to age 26.

• Regulations, 5/13/10 
• Fact Sheet, 5/10/10 
• FAQs, 5/10/10 
• Model Notice of Opportunity to Enroll in Connection with Extension of Dependent Coverage to Age 26, 6/28/10  
  • Spanish version

The recently enacted Affordable Care Act allows health coverage provided for an employee's children under 27 years of age to be generally tax-free to the employee, effective March 30, 2010. The Internal Revenue Service (IRS) has announced that these changes immediately allow employers with cafeteria plans to permit employees to begin making pre-tax contributions to pay for this expanded benefit. 

• IRS Notice 2010-38, 4/27/10 
• Press Release, 4/27/10
• Fact Sheet, 4/27/10 
• Health Reform for Young Adults: The Affordable Care Act Gives Young Adults Greater Control Over Their Own Health Care, 3/31/10

Assistant Secretary of Labor Phyllis C. Borzi issued a statement calling on employers and benefit plans to make young adult coverage available immediately. 5/11/10

HHS Secretary Kathleen Sebelius sent a letter to health insurance companies asking them to voluntarily begin offering health coverage to adult children up to age 26 before the September effective date required by the new health reform law. Several companies have agreed to this request. Giving Young Adults More Peace of Mind, 4/20/10 

Analysis  

• Impact of PPACA on Employment-Based Health Coverage of Adult Children to Age 26, EBRI, 1/10/12 (New) 
• US Employer Health Plan Enrollment Up 2% Under PPACA’s Dependent Eligibility Rule, Mercer, 8/1/11 
• New Legislation Requires New York Employers to Report Availability of Dependent Health Coverage, Epstein Becker Green, 7/29/11  
• Agencies Continue to Clarify Rules on Coverage for Children, Segal, 11/11/10 
• Realizing Health Reform’s Potential: Young Adults and the Affordable Care Act of 2010, Commonwealth Fund, 10/8/10
• Health Care Reform: Summary of Key Changes in Coverage for Adult Children, Jackson Lewis, 9/23/10 
• Important Health Care Reform Guidance Released on Age 26 Rules and Grandfathered Plan Status, Buck Consultants, 9/22/10 
• Hewitt Survey Shows Almost 1 Million U.S. Employees Given Early Opportunity to Cover Adult Children Under Their Employers' Health Plans: However, the Majority of Workers and Their Adult Children Will Have a Six-Month Wait Before Coverage Kicks In, Hewitt, 6/8/10 
• Rules on Coverage for Children Clarified, Segal, 6/7/10 
• New Interim Rules Issued for Adult Dependent Coverage, Seyfarth Shaw, 5/17/10 
• Guidance Issued On Implementing “Adult Child” Dependent Coverage Mandate, Drinker Biddle, 5/14/10 
• Agencies Issue Guidance on Extension of Children’s Health Coverage to Age 26, Buck Consultants, 5/13/10 
• Regulations on Group Health Plan Coverage of Adult Children Released, Segal, 5/13/10 
• New Rules on Extension of Health Plan Coverage to Children Up to Age 26, Sutherland, 5/12/10 
• Agencies Issues Interim Final Rule on Adult Child Coverage to Age 26, Hewitt, 5/11/10  

State Taxation of Dependent Coverage   

• Wisconsin Bill Passed to Conform State Tax Treatment of Coverage of Adult Children, Faegre & Benson, 10/28/11 
• States Address Tax Consequences of Health Coverage for Adult Children, Buck Consultants, 9/16/11  
• Minnesota Conforms State Tax Law to Health Care Reform Changes – Wisconsin Does Not, Dorsey & Whitney, 9/7/11  
• Health Care Reform: California Adopts Favorable Federal Tax Treatment of Health Coverage for Adult Children Under Age 27, McDermott Will & Emery, 5/16/11  
• Technical Advisory Memorandum (TAM-14): Gross Income Tax Notice: Federal Affordable Care Act, Dependent Coverage for Adult Child, New Jersey Division of Taxation, 4/20/11  
• State and Federal Income Tax Treatment of Adult Child Coverage May Differ, Towers Watson, 4/15/11
• California Adopts Retroactive Conformity to Federal Exclusion from Gross Income for Adult Children Health Benefits, Pillsbury Winthrop Shaw Pittman, 4/14/11
• The Affordable Care Act and Impact on California Tax, State of California Franchise Tax Board, 4/8/11    
• Many States Begin Falling in Line Regarding Tax Exclusion for Providing Health Benefits to Older Children, Katten Muchin Rosenman, 4/5/11  
• Federal Tax Law: Dependent Coverage up to Age 26, William Gallagher Associates, 4/4/11   
• Notice to Employers Concerning Change in Kentucky Income Tax Law for Health Insurance Premiums for Adult Children Under Age 27, Kentucky Department of Revenue, 3/21/11  
• Extension of Health Coverage to Adult Children May Result in Tax Consequences in Some States, Buck Consultants, 2/25/11 
• New Health Care Reform Definition of Dependent Child Creates Tax Issues, Miller Johnson, 2/22/11
• State Tax Issues Under the Affordable Care Act, Proskauer Rose, 2/14/11 
• Further Guidance on State Imputed Income for Dependent Healthcare Coverage, ArlenGroup, 2/4/11 
• Employee Health Benefits for Adult Children: Managing the Variations in State Income Tax, Pillsbury Winthrop Shaw Pittman, 1/13/11