Tax Free Health Insurance Coverage for Eligible Dependents

There are no longer tax consequences if your dependent, who is not a full-time student and is between ages 19 through 25, is enrolled in your health and dental insurance plans.

With the passage of the Patient Protection and Affordable Care Act (P.L. 111-148) and the Health Care and Education Reconciliation Act (P.L. 111-152), collectively called the “Affordable Care Act” and after additional guidance from the Internal Revenue Service, the State is acting quickly to provide tax-free coverage to your adult children currently on the State’s health insurance plan.

The dependent eligibility criteria has not change; but, beginning with the May health and dental family premiums, you will no longer be taxed on the added value of an adult child’s coverage. No action is required on your part to make this change.

If you have an adult child not enrolled in your health insurance, you will have to wait until the next enrollment and change period. You may not enroll the adult child in dental coverage until the next open dental enrollment period. The only exception to these enrollment opportunities would be if there was a qualified life event that would allow an adult child to be added to your health or dental plan during the year. Information on qualified life events is available at the DAS Benefit website: http://benefits.iowa.gov/index_qualified_life_events.html.

Verification of Student Status

DAS-HRE will no longer require written verification or a transcript/class schedule from you that your adult child, age 19 through 25, is a full-time student.

Expanded Coverage

In addition to eliminating the tax consequences of adult children, the “Affordable Care Act” also expands coverage to children through the end of the plan year they turn age 26. This expanded coverage will go into effect:

July 1, 2010 for SPOC-covered employees

January 1, 2011 for all other employees

More information about the expanded dependent eligibility coverage will be provided from Iowa DAS during the enrollment and change period.