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Eligible Dependents - A Growth Segment - Workscape HR Institute
Eligible Dependents – A Growth Segment in 2011
Once upon a time, it was reasonable to expect that after high school your children would leave the nest and become adults. They could vote, maybe enlist, and (hopefully) become financially responsible. They would enthusiastically venture out into the world to make their mark; start a career, and possibly a family.
Follow up:
Though it might sound like a fairy tale, this was the reality and the expectation of parents and employers not all that long ago. After age 19 you were on your own, and if you wanted to continue your education, then maybe age 23 or so was the point when you were considered responsible for providing for yourself. But the norm has been changing in the last decade. Parents are finding their adult children moving back home for a variety of reasons. It has become socially acceptable for individuals to live with their parents well through their twenties and beyond.
For many, hearing that health care reform requires employers to allow dependent children to stay on their parents' insurance policies until age 26 was a shock. The children cannot have jobs that offer insurance, but unlike most definitions of a dependent child they can be married and there is no requirement that the dependent be a student.
Until today, federal law did not define who qualified for dependent coverage under employer sponsored insurance. Thirty seven states, however, have defined who is eligible for dependent coverage under fully-insured group health plans. While most extend eligibility for dependent children through age 25, a handful of states (including Florida, Nebraska and New Jersey) allow individuals to cover their adult dependents up to age 30! It has been cumbersome for large employers with employees in multiple states to keep track of this varied eligibility. Requirements on marital status, student status, tax status, residence, etc,. vary from state to state.
Employers will want to begin thinking about the impact of this change now, as it will impact plan years starting on or after 10/1/2010. For most this will mean a 1/1/2011 change, but HR departments across the country are already receiving calls from eager parents looking to add their previously ineligible children back on their plan.
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