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Only one in five employers plan to extend coverage to adult children before required to do so by law

Only one in five employers (19.5 percent) plan to extend health care coverage for dependent adult children before required to do so by the Patient Protection and Affordable Care Act, according to a survey from the International Foundation of Employee Benefit Plans (IFEBP). The Affordable Care Act requires that group health plans that provide dependent coverage to children must make coverage available for an adult child until the child turns 26 years old. This provision is effective for plan years beginning on or after September 23, 2010. The IFEBP survey, Health Care Reform: What Employers Are Considering, found that two-thirds of employers will not extend coverage to adult children until legally required.

Over 45 percent of employers reported being unsure how they will address cost-sharing for dependent coverage in light of the health reform changes. However, one in ten employers do plan to add new tiers to their cost-sharing structure, according to IFEBP. In addition, 53.4 percent are not sure if they will change the eligibility requirements for dependents on the other plans they offer (such as dental, vision, and life insurance plans) to maintain the same definition of dependent children for all plans offered or if they will only apply the new rules to the primary medical plan.

IFEBP asked employers about how they will handle several other provisions located in the Affordable Care Act, as follows:

  • Lifetime and annual maximums. Approximately 80 percent of employers indicated that their plans currently include lifetime maximum provisions on essential benefits. Only 4.4 percent reported they will remove lifetime maximums before they are required to do so. In addition, IFEBP found that 70 percent of employers reported that their plans currently set annual maximums, and of these, only 3.6 percent plan to remove annual maximums before they are required to do so.
  • Preexisting condition exclusions. Almost half of employers provide health care plans that include preexisting condition exclusions. Of these, IFEBP found that only 4.5 percent will remove the exclusions before required to do so by law.
  • Early Retiree Reinsurance Program. Over 50 percent of employers that currently offer retiree medical plans to early retirees plan to apply for the temporary Early Retiree Reinsurance Program.
  • CLASS Act. Most employers (56.8 percent) are not sure whether they will offer Community Living Assistance Services and Support (CLASS) Act benefits, awaiting further clarification of premiums and regulations before they decide.

The survey contains responses from 1,021 employers. For more information, visit http://www.ifebp.org/AboutUs/PressRoom/Releases/pr_062110_us.htm.