Employers Offering Insured Health Plans Required To Extend Coverage To Dependents Up To Age 26

Employers that offer insured health benefits to Illinois employees will need to offer that coverage to unmarried dependents up to age 26 – without regard to student status – and up to age 30 for veterans residing in Illinois, under a new state insurance law set to take effect for policies issued or renewed after June 1, 2009.  The Illinois House and Senate accepted Governor Rod Blagojevich’s amendatory veto of House Bill 5285 which created the new dependent coverage provisions. 

Specifically, the new law amends the Illinois Insurance Code to prohibit individual or group accident and health insurance policies and managed care plans, that provide coverage for dependents, from terminating coverage or denying the election of coverage for unmarried dependents based on the dependent’s age before the dependent’s 26th birthday.  The coverage requirement extends to an unmarried dependent’s 30th birthday, if the dependent is an Illinois resident and a veteran of the military who has not been dishonorably discharged.  Furthermore, the law prohibits conditioning the extended health coverage based on the dependent’s enrollment in any educational institution. 

The new provision will be effective for policies or plans that provide health coverage to dependents that are amended, delivered, issued, or renewed after June 1, 2009, at which time, the provider of the policy or plan must offer a 90-day initial enrollment period to make an election for such coverage.  The law further requires that the cost of coverage for these dependents be identical, but does not prohibit an employer from requiring an employee to pay for such coverage.  This law would not affect self-insured health plans or those that provide coverage through insurance not regulated by the state of Illinois.

Employers with calendar year plans will not be subject to the new dependent health coverage requirements until January 1, 2010.  However, insurers will need to provide notice of the new dependent health coverage election option and employers will need to provide for a 90-day initial enrollment period for employees in their insured plans to elect such coverage.

Note: This article appeared in the September 5, 2008 issue of the Illinois eAuthority.