HHS issues age 26 coverage rule

Under the health care reform law, HHS is required to issue a regulation implementing the provision that extends dependent coverage to children up to age 26 regardless of marital status.  The HHS interim final rule, fact sheet, and frequently asked questions were issued today. As I anticipated, HHS took the most expansive approach to implementing this law. Under the regulations, the only permissible basis for dependent child coverage is the existence of a family relationship — financial dependency and residency with the enrollee are no longer required.

Modern Healthcare notes that  “According to HHS, the new benefit will cost $3,380 for each dependent, which will raise premiums by 0.7% in 2011 for employer plans. Premiums are also expected to rise by 1% and 1.2%, respectively in 2012 and 2013, although HHS expects the actual increase across the entire individual market will be smaller than these estimates.”  That’s likely on the low side for the FEHB Program which is an older group with (I expect) more adult children than the typical employer group.

The interim final rule requires a special open season for re-enrollment of the adult children, which may be combined with the general Open Season. That ball is in OPM’s court.

These changes take effect on January 1, 2011, absent Congressional action. Interestingly, Federal News Radio columnist Mike Causey described Congressman Van Hollen’s bill that would permit OPM to accelerate this change as a “long shot.” OPM has explained the available options for coverage until then.