Can You Add Your Parents to Your Health Plan? California Considers It

29 March 2021 Legal News: Employee Benefits & Executive Compensation Publication
Authors: Katherine Anne Sullivan Morgan Hannah R. Demsien

UPDATE: Governor Newsom signed Assembly Bill No. 570 into law on October 4, 2021. The requirement for individual health care service plan contracts or health insurance policies that provide dependent coverage to make dependent coverage available to a qualified dependent parent or stepparent will be effective for contracts or policies issued, amended or renewed on or after January 1, 2023. Additionally, the law as passed requires an issuer to provide a notice regarding Health Insurance Counseling and Advocacy Program services available to seniors at the time an applicant seeks to add a dependent parent or stepparent to their policy, if the dependent parent or stepparent is eligible for or enrolled in Medicare. The text of the approved law may be viewed here.

12% of parents in the United States with children under age 18 are also caring for another adult.The number of caregivers who provide unpaid care for a family member over the age of 50 has increased in the past five years, as has the percentage of caregivers who live in the same household as the individual who is receiving care.2 Children who care for a parent or parent-in-law are commonly involved in the management of their parent’s health, handling responsibilities such as communicating with health care providers and monitoring their parent’s health conditions.3

Last week, the California Department of Insurance sponsored California State Assembly Member Miguel Santiago in introducing Assembly Bill 570 (the “Bill”)4, which would mandate that individual or group health care service plan contracts or health insurance policies cover dependent parents. Though the Bill does not limit the age of the dependent parent, Assembly Member Santiago noted an existing issue with seniors’ access to health care that has been exacerbated by COVID-19, and the Commissioner added that in the face of the high health risks to older adults due to the pandemic, the Bill could help reduce health insurance costs for California families by expanding health coverage.5 Additionally, the Bill would offer relief to immigrant families with younger working adults caring for older undocumented family members.6

If passed, the Bill would require health coverage issued, amended, or renewed on or after January 1, 2022 that provides dependent coverage to make that coverage available to a qualified dependent parent or stepparent. The Bill would expand the definition of “dependent” under California law to include a parent or stepparent who meets the definition of a qualifying relative under 26 U.S.C. § 152(d). This connection to the federal definition of “qualifying relative” in the Internal Revenue Code means that in order to fall under the mandate, a parent or stepparent must have a gross annual income under a certain amount7 and must have more than one-half of their support for the year provided by the individual claiming them as a qualifying relative.8

We will continue to monitor this bill and similar bills at the state and federal level.

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1 Gretchen Livingston, More than one-in-ten U.S. parents are also caring for an adult, Pew Research Center (Nov. 29, 2018), https://www.pewresearch.org/fact-tank/2018/11/29/more-than-one-in-ten-u-s-parents-are-also-caring-for-an-adult/.

2 The National Alliance for Caregiving and AARP, Caregiving in the U.S. 2020 (May 2020), https://www.aarp.org/content/dam/aarp/ppi/2020/05/full-report-caregiving-in-the-united-states.doi.10.26419-2Fppi.00103.001.pdf.

3 Id.

4 The full text of California Assembly Bill 570 (2021) may be viewed here: https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB570

5 Press Release, California Department of Insurance, Commissioner Lara sponsors the Parent Healthcare Act to help reduce health insurance costs for California’s working families (March 19, 2021), http://www.insurance.ca.gov/0400-news/0100-press-releases/2021/release033-2021.cfm.

6 Id.

7 For 2020, this amount is $4,300. IRS Pub. 501(2020), Dependents, Standard Deduction, and Filing Information (last updated Feb. 1, 2021), https://www.irs.gov/publications/p501#en_US_2020_publink1000220968.

8 See, Id., for a discussion of how to calculate “support.”

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