Good policy, good PR, or both? UnitedHealthcare announced yesterday that it will extend the health coverage that graduating college students currently have under their parents' plans until the new health reform provision requiring dependent coverage up to age 26 is fully implemented – a full four months ahead of when they’re required to do so.
Hmmm, seems things are getting interesting.
As you know, under the Patient Protection and Affordable Care Act, young adults will be able to stay on their parents' employer-offered or individual family health plans up until age 26, regardless of student status or marital status. However, this extension does not take effect for employer-sponsored plans until Sept. 23.
"We want students to graduate into a secure future, not the ranks of the uninsured, so we are working with employers to make sure these young adults have health coverage available to them ahead of the new requirements," says UnitedHealthcare President Gail Boudreaux. "Accelerating the dependent coverage extension timeline for our graduating student enrollees is another tangible step we are taking to help translate the new, complex health reform directives into workable reality."
I don’t know whether UnitedHealthcare is being altruistic or cunning with this announcement, and I won’t speculate. But there is a sort of PR genius to this move, don’t you think?
Do you think other carriers will follow suit? Do you even want them to, or are you perfectly happy to have the summer to get this thing sorted out? You know what to do – hit the comments.
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1 Comment(s)
Posted by: JWales | April 26, 2010 7:50 PM
Ask anyone in my office, this is my pet issue with HealthCare Reform. Most employers offer pre-tax contributions under Section 125. Section 152 is the IRS code that governs who is a tax qualified dependent, and Section 125 refers to Section 152 for eligibility of pre-tax contributions.
There is currently a "safe harbor" for the most part for dependent children under the age of 19, or under the age of 24 IF they are full time students. They might still be eligible (or "tax-qualified") if they aren't full time students, but it's a more stringent definition. What does this mean? If the dependent isn't tax-qualified, that the employee is obligated to pay a Fair Market Value for that coverage, either outright or via Imputed Income.
The problem is that most employers (or even some brokers, for that matter) aren't familiar with this rule. There's a good possibility (or so I've been told by credible sources!) that reconciliation legislation might fix this apparent discrepancy between the eligibility age and the tax age, but it hasn't been fixed yet.
By opening up this eligibility, United may be exposing cleints (and their employees) to tax liability that they otherwise might not have had. Whew. Sorry for the diatribe.
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