Must Dental and Vision Plans Include Young Adults Under PPACA? (back)
This week a reader asks if dental and vision plans are required to include children up to age 26.
Section 2714 of the Public Health Service Act (PHSA), as amended by PPACA, provides generally (and in part) that a group health plan or issuer that makes available dependent coverage of children must make such coverage available for children until attainment of 26 years of age. PPACA also makes conforming amendments to the "HIPAA" group health plan requirements in the Code and ERISA.
The insurance market reforms in PPACA (including the age 26 child coverage requirement) preserved the HIPAA scheme whereby "excepted benefits" are exempt from the PHSA, Code and ERISA group health plan requirements (including the new PPACA insurance market reforms). Excepted benefits include, among other things, limited-scope dental and vision benefits, if offered separately.
Treasury regulations generally define limited-scope dental or vision benefits for this purpose as dental or vision benefits that either are:
(1) offered under a separate policy, certificate or contract of insurance, or
(2) otherwise not an integral part of the group health plan.
To satisfy the second requirement – i.e., for dental or vision benefits to not be considered an integral part of the plan -- participants must both (a) be given a separate election not to receive the dental/vision coverage, and (b) if the participant elects to receive coverage for the benefits, the participant must pay an additional premium or contribution for that coverage.
The DOL, IRS and HHS recently issued a FAQ on this issue that confirms that if a plan requires a separate election and "charges even a nominal employee contribution towards the coverage," the dental or vision benefits would be excepted benefits that are not subject to the insurance market reforms. Thus, if dental and vision benefits are not offered pursuant to a separate election under which the participant is charged some additional contribution toward the cost of the dental and vision coverage, those benefits would be subject to the age 26 adult child coverage requirement.