Who is a child required to be covered under a health plan to age 26

The American Benefits Council (ABC) has identified an important issue with regard to the definition of “child” under PPACA.

Under that tax code definition, a “child” means an individual who is the son or daughter of the taxpayer (including a legally adopted individual), a stepson or stepdaughter, or the eligible foster child of the taxpayer. Other children (such as grandchildren or nieces or nephews) are not included in this tax code definition.

Under PPACA children must be covered to age 26 without regard to a dependency status. The issue relates to children such as grandchildren who do not come under the IRS definition of a “child”.

According to ABC, many plans may only extend coverage to a grandchild, nephew or niece if he or she lives with the covered employee and receives at least some specified amount of financial support from the employee.

The adult child regulations simply use the word “child” thus leaving confusion in terms of the coverage required to be provided to children who do not meet that definition under the IRS code.

Employers who extend coverage to grandchildren, etc. want the ability to continue to require these children to be financially dependent on the employee and in some cases to reside with the employee. Without this ability some employers will simply cease to make such coverage available.

The broad reach of PPACA in attempting to expand coverage yet again may have unintended consequences.