Law Requires Certain Employers to Offer Dependent Coverage Until Age 26

Under the Affordable Care Act, when a plan covers dependents, it must continue to make the coverage available until a child reaches the age of 26, even if the young adult has been offered coverage through his or her own employer, is married, no longer lives with his or her parents, is not a dependent on a parent’s tax return, or is no longer a student.

There is no federal requirement compelling a plan or issuer to offer dependent coverage. However, applicable large employers may be liable for a “pay or play” penalty if they do not offer coverage to the dependents of their full-time employees through the entire calendar month during which the dependent attains age 26.

Note: Individual states may have dependent coverage requirements that are more favorable to employees. Employers and plan administrators should consult with their state insurance department to determine if additional requirements apply to their plans.

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