May 7, 2010: The recently passed federal health reform included a provision that allows dependent children under 27 years of age to be covered under their parent's health insurance plan. In response, the Internal Revenue Service has released guidelines regarding the taxation of these benefits as they relate to cafeteria plans. The IRS notice, which can be viewed here, clarifies that employers offering cafeteria plans can begin making pre-tax salary reduction contributions in order to provide coverage for children under the age of 27. Says IRS Commissioner Doug Shulman, "We want to make it as easy as possible for employers to quickly implement this change and extend health coverage on a tax-favored basis to older children of their employees."
In April, SHARE hosted a webinar, "The Impact of Extending Dependent Insurance Coverage to Young Adults," with grantee Joel Cantor from Rutgers University and Deputy Superintendent of Health for the State of New York, Troy Oechsner. Dr. Cantor's research examines expansion initiatives in 19 states for young adult health insurance coverage. His most recent issue brief, "The Impact of State Dependent Coverage Expansions on Young Adult Insurance Status: Further Analysis (Companion Brief)" finds variation in the impact of the expansions amongst different population subgroups. The report also includes discussion of federal reform implications for states in expanding dependent coverage to age 26.