Dear Yozell Clients:
We want to provide you with an update to our seminar last June on the provisions contained in the Massachusetts Health Reform Act. Most of the provisions will have an impact on employers with between 11 and 50 full time employees. As we learn of specifics in the law we continue to post updates to our website. However, many details behind this legislation have yet to be determined.
As of January 1, 2007 some of the requirements contained in the new Massachusetts Health Care Reform Act will take effect. Of particular note is the language in the law which requires health insurance contracts to provide dependent coverage beyond the ages at which a dependent ceases to qualify as such under the Internal Revenue Code.
Specifically the Act extends coverage up to age 26 or two years following the loss of dependent status under the Internal Revenue Code, which ever occurs first. Currently dependent eligibility for most group health contracts ends at age 19 or if a full time dependent student, up to age 25. Under the Federal I.R.S. Code Section 152, the definition of dependent changed effective January 1, 2005 as a result of The Working Families Tax Relief Acts of 2004 (WFTRA). The new definition is as follows:
A "qualifying child" is a daughter, son, stepchild, sibling, stepbrother or sister, or any descendent of these individuals if such child has the same principal place of abode for more than one-half of the taxable year and who (other than in the case of disability) has not attained age 19 as of the end of the taxable year (age 24 for students); and has not provided over one-half of the individual’s own support for the calendar year. The age limit does not apply to individuals who are totally and permanently disabled at any time during the year.
The three major health insurance companies in the state; Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim Health Care, and Tufts Health Plan are in the process of notifying their clients with regard to how they specifically will be administering the extended coverage for dependents. At a minimum, employers should notify employees whose dependents have lost coverage due to age previously, but who now qualify under the new law, that they may be eligible to re-enroll as of January1, 2007. The normal enrollment process applies as though this were a qualifying event. In addition, employees with dependents not previously eligible, but who now qualify, can enroll those dependents effective January 1, 2007.
As details become available from the new Massachusetts Health Insurance Connector and each health care insurer, Yozell Associates will notify you and be available to assist and advise you accordingly.
Thank you,
Marijane Norris Geary
