The PPACA calls for adult children to be eligible for enrollment in the parents health plan to age 26. However, Recent IRS guidance – Notice 2010-38 provides that the favorable tax treatment of employer contributions toward this coverage says that the relief is in effect for any tax year ending prior to the year in which such child attains age 27. Is this a conflict and can children be covered beyond age 26?
It probably is not a conflict because it is typical for a plan to allow a child, especially a child graduating college, to remain an eligible dependent until the end of the year in which they meet the maximum age allowed by the plan. The IRS likely wrote the guidance as it did so that an employer would not have to terminate coverage on the child’s 26th birthday only to avoid undesirable tax consequences.
However, there is nothing to prohibit an employer from stopping the coverage for an adult child at age 26 .
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