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How Changes To The Health Care Law Impact Your Grown Children

If you’ve got adult children under the age of 27 who don’t have their own health insurance, they’re now in luck. With the changes brought about by the federal government’s Patient Protection and Affordable Care Act, which was approved last year, if you have health insurance through your employer, coverage is now extended to children age 27 and younger. Before the change, the IRS allowed tax-free coverage for children up to the age of 19, or up to age 24 if they were a full-time student.

health-care-for-27-and-underAre there any limits on who can qualify?
The new law allows children to remain on their parents’ health insurance plan as long as they haven’t reached age 27 by the end of the year. It doesn’t matter whether they’re still in school, married or considered tax dependents by the IRS to get coverage.

What does this mean for me?
The new law assures that employer-provided reimbursements for the medical care of an employee’s adult child care are not included in the employee’s gross income.

If you have a cafeteria plan through your employer, with an option like a flexible spending account (FSA), you can now make pre-tax contributions to the account to help pay for the qualified medical expenses of your child. So money you put in your FSA can be used to pay for your son’s visit to the dentist or your daughter’s new glasses. And you don’t have to pay taxes on the money you contribute to the account.

You need to keep in mind that you must use the funds in the FSA by the end of the year, or you’ll lose them. And another provision in the new law prevents you from using FSA contributions for a wide range of over-the-counter medications, unless you have a doctor’s prescription.

About the Writer
Susan Ladika has been a writer and editor for 25 years. Her freelance work has covered everything from business to travel to science to international issues, and have appeared in such publications as Science, Town & Country, HR Magazine, Developer, The Wall Street Journal-Europe, The San Francisco Chronicle, and many others. She has also done extensive editing as a newspaper and wire service editor holding positions such as the Tampa Tribune Bureau Chief.

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