May a Grandfathered Plan Deny Coverage to Dependent Children Eligible under Another Plan?
Question: Our organization offers a grandfathered group health plan. The plan covers dependent children until age 26 — even if they’re eligible for coverage under another plan. Aren’t grandfathered plans permitted to deny coverage to a dependent child in these circumstances?
Answer: Not anymore. If a group health plan is designed to offer dependent coverage of children, the Affordable Care Act (ACA) requires that such coverage be made available until a child attains age 26 — regardless of a child’s residency, financial dependence, student status, employment or other factors. (Note that plans that provide only excepted benefits, such as limited-scope dental and vision benefits, aren’t required to comply with this coverage requirement.)
This requirement is effective for plan years beginning on or after September 23, 2010, and it now also applies to grandfathered health plans (that is, plans in existence on March 23, 2010, that haven’t undergone certain changes). Under a transition rule for plan years beginning before January 1, 2014, grandfathered plans didn’t have to cover a child who was eligible to enroll in an eligible employer-sponsored group health plan other than the group health plan of a parent.
For example, if a child of less than 26 years of age was employed and eligible for coverage under his or her own employer’s group health plan, the parent’s health plan wasn’t required to offer coverage. But, for plan years beginning on or after January 1, 2014, the mandate to offer coverage for children until age 26 also applies to grandfathered plans — even if the child is eligible for coverage under another employer-sponsored group health plan.