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Human Resources

The Affordable Care Act and Dependent Coverage

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The ACA does not require that coverage offered to dependent children be "affordable" or subsidized at the same level as employee coverage.

Therefore, an employer can choose not to pay for any of the dependent coverage. However you’ll certainly want to weigh this option with offering a competitive benefits package in order to attract and retain good talent.

Dependent Health Care Coverage

So what is a “dependent?” According to the Department of Labor and the ACA, a person has to be one of the following:

  • Biological children (sons, daughters)
  • Stepchildren
  • Adopted children (including children placed for adoption)
  • Foster children who are placed with the employee by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

Coverage must be offered to anyone in the above categories, up to age 26. A dependent can join or remain on a parent's plan even if they are:

  • Married
  • Not living with their parents
  • Attending school
  • Not financially dependent on their parents
  • Eligible to enroll in their employer’s plan

Bottom line: Employers will need to calculate whether they are small or large according to the Affordable Care Act. See our Company Size Calculator for help with this important calculation. They will then need to decide whether to offer coverage to their full-time employees and dependent children — and how much, if any, to subsidize dependent coverage.

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David Peasall, VP, Benefits and Human Resources
ABOUT THE AUTHOR
David Peasall, VP, Benefits and Human Resources

David Peasall joined FrankCrum in 2010. Since that time, he has served as the Vice President, Benefits and Human Resources overseeing human resources, employee benefits, and group health sales. Serving in the Army, he began his 20+ year career in human resources and benefits administration and has held several management positions within the corporate and public human resources environments overseeing employee benefits sales and administration, recruitment, compensation, employee relations, organizational development, and compliance. He has the nationally recognized designation of Senior Professional in Human Resources (SPHR), PPACA certification from NAHU, and a Bachelor’s degree from Barry University with a dual major in Human Resources Management and Health Services Administration. He has written for the Society for Human Resources Management, HR Insight, Proyecto Magazine, and for online publications in the restaurant and health care industries. While not at work, this Florida native loves spending time with his family, preferably boating, fishing, and diving the beautiful waters of Florida.