Young Adult Coverage

Health Care Reform Gives Young Adults Insurance Coverage — Employers Must Take Action

Under the new health care reform initiative, millions of young adults who currently have no health care insurance, or were previously dropped from a parent's coverage because of an age limit, can be covered under a parent's policy. According to the U.S. Department of Health and Human Services, the new law will be beneficial to approximately 30 percent of adults under 26 with no health insurance coverage.

2010 Start Date

Starting with plan years beginning on or after September 23, 2010, employers must continue health insurance coverage for dependent children until the dependent's 26th birthday. In some cases, certain carriers are allowing dependents who would otherwise "age-off" the parent's policy to remain on coverage or even re-enroll before the renewal date.

Who is Eligible?

Dependents up to age 26. The dependent need not live with the parent, attend school, or be a dependent for tax purposes. The law covers policies that currently provide coverage for dependents. Extended coverage is applicable whether the dependent is married or not, but does not apply to the dependent's spouse or children.

Will Insurance Rates Increase?

The law does not allow insurers to raise rates based on the age of the dependent. However, family rates do apply, and the Department of Health and Human Services anticipates that policy holders with dependents will likely see an across-the-board increase.

Starting Date

Beginning with plan years on or after September 23, 2010, employers must provide the option for health insurance coverage for dependents up to age 26.

Don't Forget FSA Expenses!

With the change in dependent coverage, parents can submit FSA reimbursements for eligible dependent expenses incurred on or after March 30, 2010.

Paychex Insurance Agency Can Help

Paychex Insurance Agency is a full-service organization ready to provide information and guidance about dependent coverage and other provisions of health care reform. We can also:

  • determine if your carrier(s) will allow dependents to remain on the policy until the plan renewal date;
  • help you enroll dependents not already on an employee's policy;
  • adjust deductions if there is a change in premium; and
  • follow the latest regulations to keep you informed about any legislative changes that affect you and your business.

An essential partner to over 550,000 businesses nationwide, Paychex closely monitors legislation that affects our clients. With access to legislative and regulatory specialists in Washington, D.C. and utilizing expert, in-house sources of legal and compliance guidance, Paychex Insurance Agency will continue to provide the latest information on health care reform.

Paychex Insurance Agency is ready with the coverage you need, when you need it. To speak with a licensed insurance representative about the right plans for your business, your employees, and yourself, call 877-393-8868 or have an agent call you.

The Department of Health and Human Services and the Internal Revenue Service (IRS) continue to provide specifics and guidance on the Health Care Reform Act. Paychex will monitor these regulatory developments and provide updates as appropriate.

The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant. It is provided for informational purposes only. If you require legal or accounting advice, or need other professional assistance, you should always consult your licensed attorney, accountant, or other federally licensed tax professional to discuss your particular facts, circumstances, and business needs.

Insurance available through Paychex Insurance Agency, Inc. (formerly Paychex Agency, Inc.), 150 Sawgrass Drive, Rochester, NY 14620. CA License #0C28207.

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