Are Employees’ Dependants Required to be Covered by Employer Insurance Premiums?

Q: Under the Affordable Care Act, are we required to contribute toward the health insurance premiums for our employees’ dependants?

A: While some employers are required to offer coverage to eligible dependent children of their full-time employees under the Affordable Care Act (ACA), they are not currently required to contribute toward the premiums of those dependent children.

The obligation to offer coverage to dependent children only applies to employers who are subject to the Employer Mandate. For 2015, the mandate covers employers with 100 or more Full Time Equivalent (FTE) employees.* Employers with 50-99 FTE employees will need to comply with the Employer Mandate in 2016, including offering coverage to dependent children of employees. Note that an employer is not required to extend coverage to spouses or domestic partners, even if they are the dependents of the employee.

Additionally, under the Affordable Care Act, if an employer offers dependent coverage (either because it is required to comply with the Employer Mandate or it is a small employer who voluntarily offers a group health plan to dependent children), that plan must allow such coverage to continue for an adult child up to age 26, or through the end of the plan year during which the child turns age 26.

*As a reminder, Full Time Equivalent employees can be calculated as follows: Number of employees who work 30 hours or more + (Total number of hours worked by part-time employees per month / 120) – Owners = Full Time Equivalent Employees.

GTM provides clients with ACA reporting to ensure your business stays compliant. For more information, contact GTM at (518) 373-4111.