Do your COBRA policies address the rights of your employees’ children? Under the Affordable Care Act, children are allowed to stay on their parent’s health plan until they turn 26. This is true regardless of the child’s marital status, and it applies to employer-sponsored plans as well as plans purchased on the Health Insurance Marketplace.

When children turn 26, they age out of their parent’s plan. This type of coverage loss counts as a qualifying event under COBRA, and children are eligible for 36 months of continuation coverage.

Providing Necessary Notice

According to the Department of Labor, the responsibility of notifications falls to the beneficiary and not the employer in this situation. When a child ages out of a parent’s employer-based health plan, the covered employee or one of the qualified beneficiaries is responsible for providing notice.

However, it is the responsibility of the plan administrator to establish a procedure for how this notice should be given. A time limit may be established, but it must provide at least 60 days after the qualifying event, the loss of coverage, or being informed that notification is required, whichever occurs latest.

This means that the plan administrator must make sure employees and their children have been informed about the age 26 rule and the notification requirement. This information can be presented in the summary plan description and in the COBRA general notice.

After the child provides the appropriate notice of the qualifying event, the plan administrator has only 14 days to provide election notice.

Some people may decide to enroll in COBRA coverage. However, because COBRA beneficiaries have to pay their full coverage costs plus a 2 percent administration fee, others may decline COBRA if they can find more affordable options through their own employer-based health plan or through the Health Insurance Marketplace.

State Laws and Other Extensions

In addition to the Affordable Care Act and federal COBRA laws, some states have additional laws that employers need to pay attention to. For example, many states have their own coverage continuation laws – or mini COBRAs – that create additional requirements.

Some states also have laws that let children stay on their parent’s health plan past age 26, although this may only apply to children who have not married. For example, in New York, some people qualify to stay on their parent’s health plan until they turn 30.

Additionally, even if it’s not legally required, some plans may provide coverage until the end of the calendar year when the child turns 26. Although this is not needed, it can make coverage changes easier, and employees will likely appreciate the extra time.

Make sure you know all applicable laws and create clear policies, so your employees and their dependents always know what’s going on.

The age 26 rule is just one more regulation for employers to keep track of. Simplify your benefits administration, and easily comply with both federal and state laws, with Travisoft COBRA administration software.