FAQ: Illinois Dependent Age Limit Change

1) What is the effective date of changes mandated by Public Act 95-0958?

The changes need to be reflected in individual and group health insurance policies and HMO contracts as they are delivered, issued, or renewed on and after June 1, 2009. Policies in force prior to June 1, 2009, will have to reflect the changes on the first renewal date after June 1, 2009, and no later than May 31, 2010.

2) Does the law require group and individual policies to provide dependent coverage?

No. The law only applies if dependent coverage is included in the policy.

3) Who must be covered under the law?

Policies that include dependent coverage must allow unmarried dependents under the age of 26 to apply for coverage. In addition, policies must allow military veteran dependents under age 30 to apply for coverage if the military veterans:1) are Illinois residents; 2) are not married; 3) have served in the active or reserve components of the U.S. Armed Forces (which includes the National Guard); and 4) have received a release or discharge other than a dishonorable discharge.

To prove that they have served in the U.S. Armed Forces and received a release or discharge other than a dishonorable discharge, veterans must submit to insurers a DD2-14 (Member 4 or 6), otherwise known as a “Certificate of Release or Discharge from Active Duty.”

A policy shall not condition eligibility for dependent coverage on enrollment in any educational institution.

4) Do covered dependents need to re-apply for coverage?

No. After June 1, 2009, dependents covered under a policy at the time of that policy’s delivery, issuance or renewal do not need to re-apply. After June 1, 2009, dependents not covered at the policy’s delivery, issuance or renewal may need to re-apply for coverage.

5) When will dependents be allowed to enroll?

a) Policies in force as of June 1, 2009 must provide for a 90-day open enrollment period for all dependents that meet the criteria established in (3) beginning on the policy renewal date, but not later than May 31, 2010. During the initial 90-day enrollment period, requirements for creditable coverage, continuous coverage or breaks in coverage may not be applied, but preexisting condition limitations may be applied if creditable coverage has not been established.

b) Policies issued on or after June 1, 2009 must provide for a 90-day open enrollment period for all dependents that meet the criteria established in (3). The 90-day open enrollment requirement only applies to policies issued on or before May 31, 2010. During the initial 90-day enrollment period, requirements for creditable coverage, continuous coverage or breaks in coverage may not be applied, but preexisting condition limitations may be applied if creditable coverage has not been established.

c) After the initial 90-day open enrollment period, insurers must provide eligible dependents not already covered under the policy annual enrollment during an open enrollment period. For policies that do not currently provide for an open enrollment period, enrollment must be allowed for the 30-day period prior to the policy’s annual renewal date or anniversary date if the policy does not have a renewal date. During this annual enrollment period the insurer may decline coverage if the dependent does not meet the requirement of 90 days of continuous coverage without a break in coverage of more than 63 days. If the dependent meets these requirements, preexisting condition limitations may not be imposed.

d) This law does not change HIPAA special enrollment requirements. As such, an eligible dependent that meets the limiting age requirements of P.A. 095-0958, may be added to a group policy if a HIPAA special enrollment event occurs.

6) Can the insurer decline coverage for eligible dependents due to health conditions?

No policy may decline coverage to an eligible dependent due to age (as defined in P.A. 095-0958), health status, or enrollment in an educational institution. The law does not otherwise restrict the definition of dependent. However, the Division will take appropriate enforcement action if the Division finds that an insurer imposed any eligibility requirement as a proxy for age (e.g., restricting coverage based on IRS dependency rules).

During the annual enrollment period, the insurer may decline coverage if the dependent does not meet the requirement of 90 days of continuous coverage without a break in coverage of more than 63 days. If the dependent meets these requirements, preexisting condition limitations may not be imposed.

7) Will companies be required to amend existing policies in order to comply with new enrollment and eligibility requirements?

Yes. Companies must amend an existing policy if the policy does not currently contain a provision for annual open enrollment or if the definition of “dependent” does not conform with these new requirements. For example, an individual policy that is guaranteed renewable and contains no open enrollment provision and has no renewal date must be amended to establish an enrollment period for the 30-day period preceding the annual anniversary date. In addition, if the policy’s definition of dependent varies from the requirements established by this new law, that definition will need to be amended.

Any required amendments to in-force polices must be incorporated by way of a rider that must be filed with and approved by the Director.

After the effective date of the new law, policies will either need to be refiled or amended to accommodate these new requirements or must be issued with a rider in order to be in compliance.

8.) Does the dependent coverage law apply to dental and vision plans?

Yes. Because the new law applies to all accident and health plans, the dependent coverage requirement applies to dental and vision plans.