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PPACA: What is a Child?

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An Affordable Care Act provision will extend access to dependent health coverage to children up to age 26, but the provision does not define the word “child.”

Many of the members of the public who submitted the 81 comments reacting to federal agencies’ interim final rule implementing the young-adult coverage access provision have suggested definitions that, at the very least, would include adopted children and stepchildren.

The effort to define “child” is just one small part of those comments,

A journey of 1,000 regulations must start with many discussions about terminology.

and the dependent coverage provision is just one of many major provisions in the Affordable Care Act – the legislative package that includes the Patient Protection and Affordable Care Act (PPACA) – that will take effect for health plan or health insurance plan years starting on or after today.

President Obama signed the bill that created PPACA March 23.

Some of the other provisions coming online today include the new restrictions on policy rescissions, a ban on using information about pre-existing conditions when deciding whether to sell coverage to a child, new restrictions on annual health benefits maximums, and a provision requiring non-grandfathered plans to provide coverage for designated preventive care services, such as mammograms, without applying deductible requirements or other cost-sharing requirements.

The Employee Benefits Security Administration (EBSA), an arm of the U.S. Labor Department, is working with the Internal Revenue Service and the Office of Consumer Information and

Insurance Oversight (OCIIO), a new division of the U.S. Department of Health and Human Services, to implement the Affordable Care Act provisions.

The agencies say they are using interim final regulations, rather than regulations that have gone through the full public comment process, to implement the PPACA provisions that are starting to take effect today because of the tight deadlines Congress imposed when it drafted the act. Use of interim final regulation process means that agencies start by posting regulations, and then collect and analyze public comments after the regulations are posted.

In the comments on the dependent coverage access provision, Mary Burns, an official with the New York State Insurance Department, took note of the lack of definition of the word “child.”

“We are aware that some insurers are interpreting this silence to mean that only biological children must be covered and that insurers and policyholders may cover adopted children and stepchildren at their option, unless state law addresses the issue,” Burns says. “We would suggest that the regulation define ‘child’ to include adopted and stepchildren, as it does not appear that the intent of the law was to exclude these children.”

Jeannette Kozloff of Hewitt Associates Inc., Lincolnshire, Ill., also has suggested that officials need to define the word.

The Internal Revenue Service (IRS) uses a definition that includes adopted children, stepchildren, individuals placed with an employee for adoption, and foster children, Kozloff says.

“It is unclear whether a plan that prior to the law voluntarily covered individuals, such as nieces and nephews…would have to now cover those individuals to age 26,” Kozloff says. “Further, it is unclear whether a plan that prior to the law did not provide coverage to certain children, such as legally placed foster children, will now have to extend coverage to these individuals.”

Kozloff and other commenters suggested that a poorly written definition of the word “child” could keep employers from providing dependent coverage for children that they now cover and want to continue to cover.

The new PPACA dependent coverage access rules will require plans that offer dependent coverage to make access available to children of insureds up to age 26 even if the children do not live with the adult insureds, are not students and are not dependents of the adult insureds for tax purposes.

The Labor Department should use the definition of child that the IRS uses, and it should clarify that a plan can still provide some access to coverage for other types of children without necessarily providing the same level of access provided to children who qualify as being children under the IRS rules, Kozloff says.

Justine Handelman, who has written to EBSA on behalf of the Blue Cross Blue Shield Association, Chicago, says plans deciding whether to cover young nieces, young nephews and other children who are not IRS “qualified children” should be able to come up with their own rules for screening those additional types of children. When deciding whether to cover a niece or nephew, for example, the plan should be able to consider extra factors, such as whether the niece or nephew of the adult insured for tax purposes.

Anne Lennan, a vice president at the Society of Professional Benefit Plan Administrators, Chevy Chase, Md. notes that some plans have been offering dependent coverage to grandchildren who live with adult insureds.

“If a group health plan voluntarily decides to cover grandchildren, may the plan impose eligibility thresholds that are prohibited for other children (i.e., age requirements, financial dependency, residency, etc.)?” Lennan asks. “May the benefits for grandchildren be less than the benefits for other children?”


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