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LEGAL DISCLAIMER:
Information contained in this publication is not legal advice, and
should not be construed as legal advice. If you need legal advice upon which you can rely,
you should seek a legal opinion from your attorney.
enrollment, the plan must provide an opportunity to enroll the parent, in addition to
the child.
Similarly, another example illustrates that, if a plan offers
more than one benefit
package option, and the under age 26 dependent qualifies for enrollment due to
this change in the law, and the parent is enrolled in one benefit package option, the
plan must provide an opportunity to enroll the dependent in any benefit package
option for which the dependent is otherwise eligible (thus allowing the parent to
switch benefit package options).
Another example illustrates that an under age 26 dependent who qualifies for an
extended enrollment opportunity and who is covered under a COBRA continuation
provision must be given the opportunity to enroll as a dependent of an active
employee (i.e., other than as a COBRA-qualified beneficiary). In this situation, if the
dependent loses eligibility for coverage due to a qualifying event (including aging
out of coverage at age 26), the dependent has another opportunity to elect COBRA
continuation coverage. (If the qualifying event is aging out, the COBRA continuation
coverage could last 36 months from the loss of eligibility that relates to turning age
26).
The final example illustrates that an employee who joined a plan prior to the
applicability date of the regulation, and has a child who never enrolled because the
child was too old under the terms of the plan but has not yet turned 26, must be
provided an opportunity to enroll the child under this section even though the child
was not previously covered under the plan. However, if the parent is no longer
eligible for coverage under the plan (for example, if the parent has ceased
employment with the plan sponsor) as of the first date on which the enrollment
opportunity would be required to be given, the plan would not be required to enroll
the child.
Action Items
Trustees should determine the expiration date of the last CBA covering the plan
that was in effect on March 23, 2010 and adopt a timeline for implementation of
these changes. Plan Documents will need to be revised,
Summaries of Material
Modifications
(SMM)
issued
and
enrollment information and forms will need to be
updated. Plan professionals will need to provide projections of anticipated additional
costs for financial planning purposes as in multimeployer group health plans, there
is generally no “single” vs “family” coverage as the plan usually covers the entire
family for the flat contribution rate.
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Technical Note: With the elimination of “dependency” tests, the only real test is
whether the person formerly called a “dependent” is a “child” of the participant.
The term dependent has been around for a long time. While it may be more
accurate to call such an under age 26 person a “child” or “adult child”, we have
stayed with the term dependent, using it as short-hand for such individuals.