Human Resources News & Insights

Communicating with workers: Dependent eligibility rules

There’s a lot of contradictory info floating around about the upcoming dependent coverage rules — and it’s critical that your employees get the facts right.

One thing you, as the employer, are responsible for: Change all of your company’s printed and electronic information — enrollment materials, summary plan descriptions, benefits websites, etc. — to reflect the new definition of an eligible dependent.

Reform: Who is and isn’t eligible now

The new definition of an eligible dependent is a biological or legally adopted child up to age 26 — even if married.

Some key points to include in your materials:

  • Dependents don’t need to be enrolled in school or be financially dependent on parents to be eligible.
  • Working adult dependents employed at an organization that provides health coverage aren’t eligible for enrollment in parents’ plans.
  • Eligibility doesn’t extend to adult dependents’ spouses or children.
  • All dependents — including those previously dropped or whose parents have opted out of the employer’s plan — must be invited (in writing) back during your enrollment period.

Note: Employers whose plan years begin on or just after Sept. 23 must comply with the new eligibility rules this fall.

Info: A helpful FAQ can be found here.

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Comments

  1. Do I understand this correctly? If the employed parent is not participating in the health insurance program, the opportunity to enroll still must be extended to their dependent children? How is the company to know who their dependent children even are? Are we required to get that information from the employee?

  2. Mike, I could definitely be wrong, but I’d say an “invitation” to the employee during open enrollment that states it applies also to their dependents that qualify on those basis above should work. I agree with you on how are we supposed to know every employee’s dependents…I think the letter to the employee that includes their dependents would suffice. Our plan (like most) doesn’t allow just the dependent to be covered, the employee also has to be covered before they can add a dependent. I’m assuming that is still ok under these new regulations? If so, go with a generalized letter addressed to the employee and dependents without having to individually and specifically name each one on a separate letter.

  3. Good point Paige…we don’t allow dependents to enroll by themselves, either. I have not seen anything on whether or not that is dealt with under the regs or not. If anyone has any info on that please provide a link.

  4. Could someone explain the “Working adult dependents employed at an organization that provides health coverage aren’t eligible for enrollment in parents’ plans.” Does this mean that if any health care is provided by an employer that the person isn’t eligible for the dependent coverage? We provide health insurance and pay 75% of the employee/single premium and one of our under 26 employees asked me if they were eligible for coverage under their parents insurance and I’m not sure what to tell her since we do provide health insurance.

  5. Here’s a link to the HHS website’s FAQs on this subject. This should answer some of your questions.

    http://www.hhs.gov/ociio/regulations/adult_child_faq.html

  6. Thank you Debra. One thing I did notice though is that it did not cover the one item that many of us have questioned…» All dependents — including those previously dropped or whose parents have opted out of the employer’s plan — must be invited (in writing) back during your enrollment period.<< If the parent has Opted Out of the plan, how do you enroll a child of theirs? The FAQ does not cover this item; it only says that "Eligible adult children wishing to take advantage of the new coverage will be included in the parents’ family policy"…so if a parent does not choose to have a policy what happens? My insurance advisor, when asked, said that the article was wrong and that we would not have to offer dependents coverage if the parent did not partake in the plan. But she could not site a specific clause in the law to support her statement either. Can someone (hopefully the author of this article) provide the actual citation which states we have to cover dependents of parents who have opted out?

    • Christian Schappel Christian Schappel says:

      According to the interim final regulations: “If a child qualifies for an enrollment opportunity under this section and the parent is not enrolled but is otherwise eligible for enrollment, the plan must provide an opportunity to enroll the parent, in addition to the child.”

      So while all those eligible (including dependents) must be invited back in writing, it appears as though coverage for a dependent is only required if the dependent’s parent is enrolled.

      Also, notice of eligibility only needs to be given to the parent. That satisfies the requirement to notify the dependent.

      The interim final regulations can be found here: http://www.dol.gov/ebsa/pdf/dependentcoverage.pdf

      I hope this helps.

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