Age 25 Mandate Questions & Answers
Blue Cross and Blue Shield of Minnesota
For Individual Accounts
October 26, 2007
1. When will this go into effect for individual products?
Individual plans will make this mandate available on January 1, 2008. All new adds for individual products will be health-history underwritten and subject to preexisting condition limitation provisions if they did not have 12 months of continuous coverage.
2. Will this change cause my rates to increase?
We do expect this change to produce a slight increase in utilization. We anticipate that 2009 fully insured rates will increase less than 1 percent due to this change and future increases will be based on claims experience.
3. Will individual product members that add dependents under age 25 pay the rate for a child or the age 19-29 subscriber rates?
Newly eligible dependents will be charged as child dependents.
4. What kind of documentation will be required to keep the dependent covered through age 24?
No additional documentation is required for dependents age 19 through 24 after January 1, 2008 if the dependent is already covered under a parent's ID.
5. Can my dependent remain on my plan if he/she is not in school?
Your child is eligible until they reach age 25 as long as they are unmarried.
6. How do I add my dependent back on to my plan if he/she is on a replacement plan (under a separate ID)?
Call Blue Cross customer service for assistance at (651) 662-9935 or toll free at 1-866-306-2444.
7. What if my dependent is on a 36-month continuation under my ID?
The status of an unmarried dependent currently covered on an extension plan will change to an active dependent until they turn age 25.
8. What if my dependent works full time?
Your dependent is eligible until they reach age 25 as long as they are unmarried.
9. If an unmarried dependent between the ages 19 through 24 lives independently or with their parents and has a job with benefits, do they have to take the benefits from their employer or can they stay covered under their parent’s plan?
They can choose to be on their parent's plan or they can enroll in their employer's plan or they can enroll in both policies. If they enroll in both policies, their employer's policy would be primary over their parent's policy.
10. What are the Coordination of Benefits (COB) rules for dependents ages 19 through 24?
The COB rules are the same as any other dependent.
11. How will billing be handled for adding dependents to an individual contract?
Our system will update the "number to bill" when applicable, and send the subscriber a confirmation letter.
12. Do I have to add my dependent between ages 19 through 24?
No. You have the choice whether or not to cover your dependents.
13. When will the dependent lose coverage once he/she reaches age 25?
Coverage will be discontinued on the last day of the month of the dependent's 25th birthday. Refer to the contract for specific time-of-day details.
14. Will individual product members have to submit a health history application in order to add a dependent?
Yes, standard application procedures will apply, including health history applications for new dependents.
15. If my dependent has not had continuous coverage, will he/she be subject to preexisting condition exclusions?
Standard preexisting condition exclusions and continuous coverage rules will apply. See your Certificate of Coverage for details.
16. If the dependent is not covered from ages 19 through 22, for example, may he/she be added back on the contract until they reach 25?
Any unmarried dependent child under age 25 may be considered for coverage by submitting a health history application.
17. Will this only cover single dependents or married ones as well?
Only unmarried dependents can be covered.
18. What if my dependent is age 19 through 24 and divorced?
Unmarried dependent ages 19 through 24 are eligible.
19. What if the 19- through 24-year-old is my stepchild or foster child?
Dependents who meet plan eligibility requirements may be covered beyond age 19.
20. What do I need to consider if my dependent is a disabled dependent?
After January 1, 2008, disabled dependents will no longer have to provide documentation of disability until they reach age 25 and beyond. The documentation requirement will continue to apply at age 25 and beyond.
21. Will this change allow for a 24-year-old with a dependent of his/her own?
No, unless the 24-year-old's dependent is an eligible grandchild. A grandchild that qualifies as a dependent grandchild remains eligible as long as the grandchild eligibility criteria are met and the grandchild is unmarried under the age of 25.
22. How is a dependent defined for health plan purposes?
For health plan purposes, a dependent is an unmarried child under the age of 25. The definition includes adopted children, disabled dependents, dependent grandchildren who meet the state's requirement and a child for whom the member or member's spouse has been appointed the legal guardian.
23. How is a dependent defined for tax purposes?
A qualifying child is one who meets all of the following criteria:
- Resides with the taxpayer 50 percent of the year
- Is either under age 19 or a full-time student ages 19 through 23
- Has not provided greater than 50 percent of the child's own support for the calendar year in which the taxpayer's taxable year begins
A child is not qualified during the year in which the child turns age 24.
A qualifying relative for health plan purposes is one who meets all of the following criteria:
- Bears a special relationship to the taxpayer (blood relative or an individual who resides in the taxpayer's household)
- Receives greater than 50 percent of their support from the taxpayer
- Is not a qualifying child for any taxpayer for the year in question
A dependent relative is a term defined by the Internal Revenue Code for income tax purposes. Dependents eligible under your health plan may or may not be tax dependents. Consult your tax advisor.
24. For whom can expenses be reimbursed from an HSA, HRA or FSA?
The taxpayer and the taxpayer's tax dependents. If the dependent is not a tax dependent, there may be tax consequences. Consult your tax advisor.
25. Assuming a member has a dependent who is not a tax dependent, how should they handle their crossover election?
Crossover should be turned off to prevent tax implications if there is a dependent who is not considered a tax dependent. This may change in the future if the IRS extends its "domestic partner" guidance to dependent children.
26. Why do you suggest I talk with my tax consultant?
Because the definition for a dependent with respect to health care coverage is different than the definition of a dependent under the tax code, we suggest you confer with your tax advisor to confirm the tax exempt status of health plan premiums and spending accounts.
27. Why can't Blue Cross provide tax advice?
Blue Cross is not licensed to dispense tax or legal advice. Blue Cross is licensed as a health plan.
28. What do I need to consider regarding tax implications surrounding flexible spending accounts (FSAs), health reimbursement accounts (HRAs), health savings accounts (HSAs) or Voluntary Employees' Beneficiary Associations (VEBA)?
If your dependent is not a tax dependent, there may be tax consequences if account funds are used to pay claims for the dependent. Consult your tax advisor.
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