Three Cabinet agencies released joint regulations on the extension of dependent coverage to adults under age 27 yesterday, providing a draft of the rules that will govern part of the health care reform law that goes into effect on September 23.
As expected, the rules defining eligible dependents are broad: eligible dependents do not need to live with a parent, still be a student, be unmarried, or be claimed as a dependent on a parent’s tax return to be eligible for inclusion on a parent’s plan. The benefits offered to all dependents under 27 would have to be the same and cost the same. Spouses and children of the dependent would not be able to join the parent’s plan. Also, if the dependent’s employer makes a credible offer of insurance, the dependent could not join a parent’s plan until 2014.
An important caveat in the regulations is that employers who do not currently offer dependent coverage would not be required to cover older dependents. Employers that do, however, would be required to extend coverage.
The cost estimate is roughly $3,300 for each dependent that joins a group plan, meaning employer plans could see a cost increase of 0.7% in 2011 just from expanded dependent coverage. The cost for those in the non-group market is estimated at $2,400 in 2011.
You can read the draft regulations here. The comment period will open on May 13.
