May 2010

Final Interim Regulations Issued on Adult Dependent Health Coverage

From Journal of Accountancy.

On Monday, the IRS, along with the Department of Labor and Department of Health and Human Services, issued interim final regulations for group health plans and health insurers relating to dependent coverage for children under the age of 26 (TD 9482). The regulations complement guidance issued by the IRS on April 27 on the tax treatment of health coverage for children who have not yet turned 27.

The Patient Protection and Affordable Care Act (PL 111-148) requires group health plans and health insurers that provide dependent care coverage to continue to make coverage available for any adult child of a plan participant up to age 26. It also extended the general exclusion from gross income for reimbursements for medical care under an employer-provided accident or health plan (under IRC § 105(b)) to any employee’s child who has not yet turned 27 by the end of the tax year. (The IRS in Notice 2010-38 indicated that it will extend this treatment to include coverage excluded under IRC § 106, too.)

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