First few Article Sentences
The passage of federal healthcare reform in 2010 marks a new era for employer-sponsored health plans. Along with the requirements of other recently passed laws, group health plans must comply with several new provisions of the Patient Protection and Affordable Care Act (“PPACA”) summarized below. This article only addresses the impact of PPACA on employer-sponsored group health plans, and not the many issues for hospitals, doctors, and other medical providers. Unless otherwise noted, these changes took effect after September 23, 2010 (January 1, 2011 for calendar year plans).
One of the first health care reform changes to take effect was the change in the taxation of health coverage for children, effective March 30, 2010. Prior to health care reform, the taxation of health coverage of children depended on whether the children qualified as tax dependents for health care purposes under complicated definitions of “qualifying child” or qualifying relative.” Now, health care coverage can be provided on a tax-free basis for children (including adopted children, children placed for adoption, stepchildren and foster children) through the calendar year in which the child turns 26. This rule applies regardless of the marital status of the child, the residence of the child, or whether the child is financially dependent upon the employee or the employee’s spouse.