PacificSource FAQ: Extension of Dependent Eligibility Published: May 21, 2010 Updated: August 9, 2010 and November 19, 2010 General Information What is this about? Under the new federal Patient Protection and Affordable Care Act, known as the Affordable Care Act for short, dependents will be able to stay on their parents health plan to age 26. By law, this extension of dependent eligibility starts on September 23, 2010 and is effective on your health insurance policy s first renewal on or after that date. On May 10, 2010, the U.S. Department of Health and Human Services (HHS), the U.S. Department of Labor (DOL), and the U.S. Department of the Treasury published interim final rules on the dependent eligibility requirements of the Affordable Care Act. These interim final rules clarify the dependent eligibility requirements and create a special enrollment opportunity for adult children under the age of 26. The following questions and answers will provide more information about this early extension of dependent eligibility. Will PacificSource implement the dependent eligibility extension early? Yes and no. Effective May 1, 2010, PacificSource will extend coverage to dependents currently* covered on their parents individual or group policies up until age 26, regardless of full-time student status or parent support. Large employers had the option of opting out of this early extension of eligibility if they notified us in writing by May 14, 2010. Otherwise, they will have opted in to the extension by default. Dependents who terminated coverage on their parents policy prior to May 1, 2010 will not be able to re-enroll before the dependent eligibility provision of the Affordable Care Act takes effect on their policy renewal on or after September 23, 2010. We are also unable to extend coverage to those who don t meet the current dependent eligibility requirements outlined in their parents policies or benefit handbooks. *as of April 30, 2010 Information for Members Q1: Which of my dependent children are eligible to remain under my health plan as a result of the Affordable Care Act? A1: Your natural children, stepchildren, or adopted children (including a child placed for adoption) under the age of 26 are eligible. Q2: When do the changes in dependent eligibility go into effect under the Affordable Care Act? Q2: They are effective on the first day of the first plan year beginning on or after September 23, 2010 (e.g., January 1, 2011 for policies that renew on January 1). Q3: Are there any additional restrictions for children under the age of 26 to be eligible to enroll on my health plan under the Affordable Care Act? Q3: Yes, a plan may not define dependent other than in terms of a relationship between a child and the parent. A plan may not deny or restrict coverage for a child who is under age 26 based on any of the following: the child s marital status the child s financial dependency upon the parent or any other person the child s place of residence FAQ_DependentEligibility_111910 1 of 6
the child s employment status (unless the parent s health plan is a grandfathered group health plan for a definition of grandfathered group health plan, please see our General FAQ.) the child s student status If the parent s health plan is a grandfathered group health plan, the plan may exclude coverage to an adult child under the age of 26 only if the child is eligible to enroll in an eligible employersponsored health plan other than a group health plan of a parent. Q4: My child was dropped from coverage earlier this year due to no longer meeting the dependent eligibility requirements. Can he re-enroll early? Q4: (Updated November 19, 2010) In general, no; there is not an open enrollment period when dependents can resume coverage until the policy s renewal date on or after September 23, 2010. Dependents who lost coverage prior to May 1, 2010 may only re-enroll in their parents coverage when the dependent eligibility provision of the Affordable Care Act takes effect, which is on the policy s renewal date on or after September 23, 2010. At that time, a one-time special enrollment period will be offered to eligible children under age 26 who do not have healthcare coverage for one of the following reasons: their coverage ended because they reached the previous dependent age limit; they were denied coverage (or were not eligible for coverage) because they were over the previous age limit. The interim final rules require that this special enrollment period last for at least 30 days. Q5: My child transferred to a COBRA, state continuation, portability, or individual policy earlier this year due to no longer meeting the dependent eligibility requirements. Can she reenroll early? A5: (Updated November 19, 2010) In general, no; there is not an open enrollment period when dependents can resume coverage until the policy s renewal date on or after September 23, 2010. Dependents who lost coverage prior to May 1, 2010 may only re-enroll in their parents coverage when the dependent eligibility provision of the Affordable Care Act takes effect, which is on the policy s renewal date on or after September 23, 2010. At that time, a one-time special enrollment period will be offered to eligible children under age 26 who do not have healthcare coverage for one of the following reasons: their coverage ended because they reached the previous dependent age limit; they were denied coverage (or were not eligible for coverage) because they were over the previous age limit. The interim final rules require that this special enrollment period last for at least 30 days. Q6: My child is under age 26 and is getting married soon. Will he be able to remain on my policy? A6: In general, yes, as long as your child was enrolled on your policy as of April 30, 2010, and he will not have access to other group health insurance coverage after marriage. (Large employers have the ability to opt out of this early extension of eligibility.) Q7: Does my child have to be enrolled in college or pursuing some form of higher education? A7: No. There are no requirements related to education. Q8: Do I need to be providing a certain level of financial support for my child? A8: No. There are no requirements related to financial support. Q9: I received notice that my dependent child will be dropped from my policy effective May 1 or June 1, 2010 due to no longer meeting the dependent age or financial support requirements. How does this early extension of dependent eligibility affect that? FAQ_DependentEligibility_111910 2 of 6
A9: Unfortunately, our May and June 2010 dependent ineligibility notices mailed before we made the decision to extend eligibility. We are in the process of mailing updates to those who received that notice. Unless you are covered by a large employer that has chosen to opt out of this eligibility extension, or your dependent is reaching age 26, your dependent s coverage will not terminate and there will be no gap in coverage. If you have questions, please call our Membership Service Department at (866) 999-5583 (Oregon) or (888) 839-6888 (Idaho). Q10: What do I need to do to ensure that my dependent s coverage continues during this period? A10: You do not need to do anything. We are updating our systems to allow for coverage to continue without interruption until age 26 for everyone eligible. (Large employers have the ability to opt out of this early extension of eligibility; the extension will automatically happen for everyone else.) Q11: Will my premiums change if I keep my child on my policy during this time? A11: No, you will continue to pay the same amount you otherwise would for family or dependent coverage until your group renews. Q12: What if I don t want to keep my adult dependent children on my policy? A12: As always, you can remove dependents from your existing coverage at any time, effective the first of the month following the date PacificSource receives the request to drop your dependent. Q13: Does the special enrollment period under the Affordable Care Act apply only to group health plans, or to both group and individual health plans? A13: It applies to both group and individual health plans. Q14: Which of my family members are eligible to enroll during the special enrollment period under the Affordable Care Act? A14: (Updated November 19, 2010) Eligible family members are your adult children under the age of 26 who are not currently enrolled due to one of the following reasons: Their coverage ended because they reached the previous dependent age limit; or They were denied coverage (or were not eligible for coverage) on their parents plan because they were over the previous age limit. If you are not currently enrolled, you are also eligible if you are also enrolling your adult children described above at the same time. Your spouse, domestic partner, or any children who were still eligible under the previous dependent age limit are not eligible to enroll during this special enrollment period for adult children described above. Q15: Is the special enrollment period under the Affordable Care Act a one-time opportunity for an adult child to enroll, or will it be provided annually? A15: The special enrollment period created by the interim final rules is a one-time opportunity for an adult child to enroll. In subsequent years, dependent coverage may be elected for an eligible child in connection with normal enrollment opportunities outlined in the terms of the policy. Q16: If my employer offers more than one benefit package, is this special enrollment period under the Affordable Care Act also an opportunity for me to switch benefit packages? A16: (Updated November 19, 2010) Yes, but only if you are adding an adult child described in question Q14 above to your policy at that time. The interim final rules require that the plan must provide your child an opportunity to enroll in any benefit package available to similarly situated individuals who enroll when first eligible. Q17: My child is under age 26 and currently enrolled on COBRA. Can I add my child back under my coverage during the special enrollment period under the Affordable Care Act? A17: (Updated November 19, 2010) Yes. The interim final rules require that the plan must provide your adult child an opportunity to enroll on the plan as your dependent instead of as a COBRA qualified beneficiary. FAQ_DependentEligibility_111910 3 of 6
Q18: If my child who was previously enrolled on COBRA re-enrolls under my coverage, will she be eligible to elect COBRA continuation coverage due to aging out of the plan at age 26? A18: Yes, as long as your child meets the definition of a COBRA qualified beneficiary. If your child loses eligibility for coverage due to a COBRA qualifying event (including aging out of coverage at age 26), she has another opportunity to elect COBRA continuation coverage. If the qualifying event is aging out, your child s COBRA continuation coverage could last up to 36 months from the loss of eligibility that related to turning age 26. Q19: My child is under age 26 and has insurance through his employer, and I have a different employer. Can I also add him on my employer insurance policy under the Affordable Care Act? A19: (Updated August 9, 2010) Yes, if your employer s insurance policy is a nongrandfathered group health plan. If your employer s insurance policy is a grandfathered group health plan, the plan may deny coverage to a child who is eligible to enroll in an employer-sponsored health plan other than the parent s group health plan. Q20: Will I receive notice of the special enrollment opportunity under the Affordable Care Act closer to my plan s renewal date? A20: (Updated November 19, 2010) Yes. The interim final rules require that notice be provided to adult children under the age of 26 no later than the first day of the first plan year beginning on or after September 23, 2010. With group health plans, the notice must be provided by your employer. Your employer may provide the notice to you on behalf of your adult child. Your employer may also include the notice with other enrollment materials that it distributes to you. With individual health plans, the notice must be provided by your insurer, PacificSource. We may provide the notice to you on behalf of your adult child. Q21: (Added November 19, 2010) Can I add any eligible dependent child under age 26, or is it limited to just those that are newly eligible due to reform? A21: The interim final rules state that the special one-time enrollment is limited to just those that are newly eligible. As such, an eligible dependent child under age 26 can be added during the onetime special enrollment only if the child does not have healthcare coverage for one of the following reasons: Their coverage ended because they reached the previous dependent age limit They were denied coverage (or were not eligible for coverage) because they were over the previous age limit. Q22: (Added November 19, 2010) How long do I have to enroll my dependent child under age 26? A22: The interim final rules state that you have 30 days from the date on the special enrollment notice that your employer distributed to you. Your dependents effective date will then coincide with your plan s renewal date. Information for Employers Q23: I don t want to adopt this early extension of dependent eligibility under my policy. I would prefer to wait until the federal law goes into effect. Can I opt out? A23: If you are a small employer group of 50 or fewer employees as defined by ORS 743.730(30) in Oregon or IC 41-4703(28) in Idaho, your group cannot opt out of this extension. The extension will automatically apply to any dependents under age 26 who are currently enrolled on your policy. If you are a large employer group of 51 or more employees, you may choose to opt out. This extension will automatically apply to any dependents under age 26 who are currently FAQ_DependentEligibility_111910 4 of 6
enrolled on your policy unless you opt out in writing by May 14, 2010. To exercise the opt-out provision, please contact your PacificSource Membership Service Representative by e-mail, mail, or fax and clearly indicate that you wish to opt out of the dependent eligibility extension until required by the Affordable Care Act. If you are a new large employer group moving to PacificSource between May and September 2010, you may choose to opt out at time of initial new group enrollment with PacificSource. If you are an employer group covered through an Association or MEWA, you cannot make this decision at the employer group level. Whatever decision the Association or MEWA makes applies to all employer groups under that entity. Q24: What do I need to do to ensure that my employees can participate in this early extension of dependent eligibility? A24: You do not need to do anything; no policy endorsement is required. We are updating our systems to allow for coverage to continue without interruption until age 26 for everyone eligible. Only large employer groups that notify us of their wish to opt out will be excluded. Q25: I d like to take the early extension of coverage a step further. Can I allow coverage of all dependents under 26, and give those newly eligible dependents an opportunity to re-enroll now? A25: If you are a small employer group of 50 or fewer employees as defined by ORS 743.730(30) in Oregon or IC 41-4703(28) in Idaho, your group cannot make this change now. This provision will be automatically applied when your group policy renews for the first time after September 23, 2010. If you are a large employer group of 51 or more employees, and: o your policy renews in May, June, July, August, or September 2010 - you can add such an endorsement to your policy at renewal. The endorsement will extend coverage to dependents under age 26 and provide a 31-day period for special enrollment of the newly eligible dependents. To do so, PacificSource must receive a written request to add such an endorsement prior to your renewal date. (Groups renewing May 1 have until May 14 to provide this notice.) Your group s premium rates will be increased up to 1% to allow for this endorsement in Oregon, or up to 0.25 percent in Idaho. o your policy s next renewal is October 1, 2010 or later - you cannot make this change now. This provision will be automatically applied when your group policy renews. Q26: My group renews sometime between May and September 2010 and we have an open enrollment provision. Our group has opted to accept the extension, but is not adding the endorsement. Since I have an open enrollment provision, can I allow parents to add their dependents under age 26? A26: No. Only those dependent children that meet the eligibility requirements outlined in your plan policy may elect open enrollment. If you do not add the endorsement at your 2010 renewal to expand adult dependent children ages to 26, they will not be able to enroll until the dependent eligibility provision of the Affordable Care Act takes effect, which is on the policy s renewal date on or after September 23, 2010. Q27: Do the changes in dependent eligibility requirements under the Affordable Care Act require an employee s grandchild to be covered if the employee s child is covered? A27: No. A plan does not need to make coverage available to a child of a child receiving dependent coverage. FAQ_DependentEligibility_111910 5 of 6
Q28: Do the changes in dependent eligibility requirements affect the provisions outlined in the policy for brothers, sisters, nieces, nephews, and grandchildren if the subscriber is designated as that person s legal guardian? A28: No. A plan does not need to make coverage available to them beyond the ages outlined in your policy. Q29: Do the changes in dependent eligibility requirements under the Affordable Care Act require an employee s son-in-law or daughter-in-law to be covered if the employee s child is covered? A29: No. A plan does not need to make coverage available to the spouse of a child receiving dependent coverage. Q30: If both parents have a grandfathered group health plan, can one of those grandfathered group health plans exclude an adult child from coverage based on the fact that the adult child is eligible to enroll in the other parent s plan? A30: No. Both parents grandfathered group health plans must make dependent coverage available to children under the age of 26 unless the child is eligible to enroll in an eligible employer-sponsored health plan other than the group health plan of either parent. Q31: If my company employs both the parent and the adult child and both are currently enrolled in our grandfathered group health plan as employees, can our grandfathered group health plan exclude the adult child from becoming a dependent under the parent s coverage based on the fact that the adult child is eligible for coverage as an active employee? A31: No. The grandfathered group health plan must make dependent coverage available to children under the age of 26 unless the child is eligible to enroll in an eligible employer-sponsored health plan other than the parent s group health plan. In this case, the parent and the child have the same employer-sponsored health plan. Q32: Can an insurer charge more premium for coverage of an adult child than it does for coverage of a minor child? A32: No. The terms of the plan providing dependent coverage of children cannot vary based on age for children under age 26. Q31: Can my company have separate, different benefit packages for adult children and minor children? A31: No. The terms of the plan providing dependent coverage of children cannot vary based on age for children under the age of 26. Q32: As an employer, am I required to notify my employee s adult children under age 26 of the special enrollment period under the Affordable Care Act? A32: (Updated November 19, 2010) Yes. The interim final rules required that notice be provided no later than the first day of the first plan year beginning on or after September 23, 2010. The notice may be provided to an employee on behalf of the employee s adult child. The notice may be included with other enrollment materials that you distribute to employees, provided the statement about this special enrollment period is prominent. Q33: Is the DOL developing a model notice employers can use to notify employees and their dependent children of the special enrollment period under the Affordable Care Act? A33: (Updated November 19, 2010) Yes, the DOL has created a model notice for this purpose. PacificSource, as a courtesy, has developed a template that employers may use to notify their employees based on the DOL s model notice. Our template is available on our Web site at Pacificsource.com/reform-notices. FAQ_DependentEligibility_111910 6 of 6