The U.S. Department of Labor and the Employee Benefits SecurityAdministration have released some fast facts on regulations in theAffordable Care Act that allow young adults to stay on theirparents' health care plan until age 26:

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The Affordable Care Act allows young adults to stay on theirparents' health care plan until age 26. Before the President signedthis landmark Act into law, many health plans and issuers could anddid in fact remove young adults from their parents' policiesbecause of their age, leaving many college graduates and otherswith no insurance. This helps to explain problems like:

• Young adults have the highest rate of uninsured of anyage group. About 30% of young adults are uninsured,representing more than one in five of the uninsured. This rate ishigher than any other age group, and is three times higher than theuninsured rate among children.
• Young adults have the lowest rate of access toemployer-based insurance. As young adults transition intothe job market, they often have entry-level jobs, part-time jobs,or jobs in small businesses, and other employment that typicallycomes without employer-sponsored health insurance. The uninsuredrate among employed young adults is one-third higher than olderemployed adults.
• Young adults' health and finances are at risk.Contrary to the myth that young people don't need health insurance,one in six young adults has a chronic illness like cancer, diabetesor asthma. Nearly half of uninsured young adults report problemspaying medical bills.

Providing Relief for Young Adults:

The Affordable Care Act requires plans and issuers that offercoverage to children on their parents' plan to make the coverageavailable until the adult child reaches the age of 26. Many parentsand their children who worried about losing health insurance afterthe children moved away from home or graduated from college nolonger need to worry.

The Departments of Health and Human Services, Labor, andTreasury have issued regulations implementing the Affordable CareAct by expanding dependent coverage for adult children up to age26. Key elements include:

• Coverage Extended to More Children. The goalof this new policy is to cover as many young adults under the ageof 26 as possible with the least burden. Plans and issuers thatoffer dependent coverage must offer coverage to enrollees' adultchildren until age 26, even if the young adult no longer lives withhis or her parents, is not a dependent on a parent's tax return, oris no longer a student. There is a transition for certain existinggroup plans that generally do not have to provide dependentcoverage until 2014 if the adult child has another offer ofemployer-based coverage aside from coverage through the parent. Thenew policy providing access for young adults applies to bothmarried and unmarried children, although their own spouses andchildren do not qualify.
• Effective for Plan or Policy Years Beginning On orAfter September 23, 2010. Secretary Kathleen Sebeliuscalled on leading insurance companies to begin covering youngadults voluntarily before the implementation date required by theAffordable Care Act (which is plan or policy years beginning on orafter September 23rd). Early implementation would avoid gaps incoverage for new college graduates and other young adults and saveon insurance company administrative costs of dis-enrolling andre-enrolling them between May 2010 and September 23, 2010. Over 65companies have responded to this call saying they will voluntarilycontinue coverage for young adults who graduate or age off theirparents' insurance before the implementation deadline.
• All Eligible Young Adults Will Have A SpecialEnrollment Opportunity. For plan or policy years beginningon or after September 23, 2010, plans and issuers must givechildren who qualify an opportunity to enroll that continues for atleast 30 days regardless of whether the plan or coverage offers anopen enrollment period. This enrollment opportunity and a writtennotice must be provided not later than the first day of the firstplan or policy year beginning on or after September 23, 2010. Thenew policy does not otherwise change the enrollment period or startof the plan or policy year.
• Same Benefits/Same Price. Any qualified youngadult must be offered all of the benefit packages available tosimilarly situated individuals who did not lose coverage because ofcessation of dependent status. The qualified individual cannot berequired to pay more for coverage than those similarly situatedindividuals. The new policy applies only to health insurance plansthat offer dependent coverage in the first place: while mostinsurers and employer-sponsored plans offer dependent coverage,there is no requirement to do so.

Access to Insurance: What Young Adults and Parents Needto Do:

• Check for Immediate Options: Private healthinsurance companies that cover the majority of Americans havevolunteered to provide coverage earlier than the implementationdeadline for young adults losing coverage as a result of graduatingfrom college or aging out of dependent coverage on a family policy.This stop-gap coverage, in many cases, is available now. Ask youremployer and insurer about this option.
• Watch for Open Enrollment: If early coverageis not an option with your employer or insurance company, thenyoung adults will qualify for an open enrollment period to jointheir parents' family plan or policy beginning on or afterSeptember 23, 2010. Insurers and employers are required to providenotice for this special open enrollment period. Watch for it or askabout it.
• Expect an Offer of Continued Enrollment:Insurers and employers that sponsor health plans will inform youngadults of continued eligibility for coverage until the age of 26.To get the coverage, young adults and their parents need not doanything but sign up and pay for this option.

New Tax Benefits for Adult Child Coverage:

The new regulation complements guidance issued by the TreasuryDepartment on April 27, 2010, on the tax benefits provided for suchcoverage through the Affordable Care Act. Under a new tax provisionin the Affordable Care Act and the Treasury guidance, the value ofany employer-provided health coverage for an employee's child isexcluded from the employee's income through the end of the taxableyear in which the child turns 26. This tax benefit appliesregardless of whether the plan is required by law to extend healthcare coverage to the adult child or the plan voluntarily extendsthe coverage.

Key elements include:

• Tax Benefit Continues Beyond Extended CoverageRequirement. While the Affordable Care Act requires healthcare plans to cover enrollees' children up to age 26, someemployers may decide to continue coverage beyond the child's 26thbirthday. In such a case, the Act provides that the value of theemployer-provided health coverage is excluded from the employee'sincome for the entire taxable year in which the child turns 26.Thus, if a child turns 26 in March but stays on the plan throughDecember 31st (the end of most people's taxable year), all healthbenefits provided that year are excluded for income taxpurposes.
• Available Immediately. These tax benefits areeffective March 30, 2010. The exclusion applies to any coveragethat is provided to an adult child from that date through the endof the taxable year in which the child turns 26.
• Broad Eligibility. This expanded health caretax benefit applies to various workplace and retiree health plans.It also applies to self-employed individuals who qualify for theself-employed health insurance deduction on their federal incometax return.
• Both Employer and Employee Shares of Health Premium AreExcluded from Income. In addition to the exclusion fromincome of any employer contribution towards qualifying adult childcoverage, employees can receive the same tax benefit if theycontribute toward the cost of coverage through a "cafeteria plan."This benefit is available immediately, even if the cafeteria plandocument has not yet been amended to reflect the change. To reducethe burden on employers, they have until the end of 2010 to amendtheir cafeteria plan documents to incorporate this change.

Companies Responding To Secretary Sebelius' Call ForEarly Implementation:

Early implementation by the companies listed below will avoidgaps in coverage for new college graduates and other young adultsand save on insurance company administrative costs of dis-enrollingand re-enrolling them between May 2010 and the start of the plan orpolicy year beginning on or after September 23, 2010. Earlyenrollment will also enable young, overwhelmingly healthy peoplewho will not engender large insurance costs to stay in theinsurance pool. The following companies have agreed to implementthis program before the September 23, 2010 deadline:

Blue Cross and Blue Shield of Alabama
Blue Cross Blue Shield of Delaware
Blue Cross and Blue Shield of Arizona, Inc.
Blue Cross and Blue Shield of Florida
Arkansas Blue Cross and Blue Shield
Blue Cross and Blue Shield of Hawaii
Blue Shield of California
Blue Cross of Idaho Health Service
Regence Blue Shield of Idaho
Wellmark Blue Cross and Blue Shield of Iowa
Health Care Service Corporation
Blue Cross and Blue Shield of Kansas
Blue Cross Blue Shield Association
Blue Cross and Blue Shield of Louisiana
WellPoint, Inc.
CareFirst BlueCross and BlueShield
Blue Cross and Blue Shield of Massachusetts
Blue Cross and Blue Shield of Kansas City
Blue Cross and Blue Shield of Michigan
Blue Cross and Blue Shield of Montana
Blue Cross and Blue Shield of Minnesota
Blue Cross and Blue Shield of Nebraska
Blue Cross & Blue Shield of Mississippi
Horizon Blue Cross and Blue Shield of New Jersey, Inc.
HealthNow New York, Inc.
The Regence Group
Excellus Blue Cross and Blue Shield
Capital BlueCross
Blue Cross and Blue Shield of North Carolina
Independence Blue Cross
BlueCross BlueShield of North Dakota
Highmark, Inc.
Blue Cross of Northeastern Pennsylvania
BlueCross and BlueShield of Tennessee
Blue Cross and Blue Shield of Vermont
Blue Cross & Blue Shield of Rhode Island
Premera Blue Cross
Blue Cross and Blue Shield of South Carolina
Blue Cross and Blue Shield of Wyoming
Kaiser Permanente
Cigna
Aetna
United
WellPoint
Humana
Capital District Physicians' Health Plan (CDPHP), Albany, NewYork
Capital Health Plan, Tallahassee, Florida
Care Oregon, Portland, Oregon
Emblem Health, New York, New York
Fallon Community Health Plan, Worcester, Massachusetts
Geisinger Health Plan, Danville, Pennsylvania
Group Health, Seattle, Washington
Group Health Cooperative Of South Central Wisconsin, Madison,Wisconsin
Health Partners, Minneapolis, Minnesota
Independent Health, Buffalo, New York
Kaiser Foundation Health Plan Oakland, California
Martin's Point Health Care, Portland, Maine
New West Health Services, Helena, Mt
The Permanente Federation, Oakland, California
Priority Health, Grand Rapids, Michigan
Scott & White Health Plan, Temple, Texas
Security Health Plan, Marshfield, Wisconsin
Tufts Health Plan, Waltham, Massachusetts
UCARE, Minneapolis, Minnesota
UPMC Health Plan, Pittsburgh, Pennsylvania

This fact sheet has been developed by the U.S. Department ofLabor, Employee Benefits Security Administration, Washington, DC20210. It will be made available in alternate formats upon request:Voice phone: 202.693.8664; TTY: 202.501.3911. In addition, theinformation in this fact sheet constitutes a small entitycompliance guide for purposes of the Small Business RegulatoryEnforcement Fairness Act of 1996.