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Medical/Dental Eligibility & Coverage to Age 26


Guest Benefitsrock

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Guest Benefitsrock

If our co. wants to use the same eligibility rules for the dental plan and medical plan (the medical has to cover dependents to age 26), won't the tax consequences be different to the employee? The rule that allows medical coverage to dependents to age 26 won't be taxable to the employee doesn't apply to dental coverage so if dependents don't qualify as a dependent as defined before health care reform, the coverage will be taxable to the employee. Thanks!

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Others can (and hopefully will) provide details and cites, but basically your dental premiums will also be federally tax exempt. The change to the IRC makes the dental premium federally tax-exempt (to age 26) even if PPACA doesn't require eligibility to age 26 (because it's a stand alone plan).

State income taxes, if any, may be a different story for both medical and dental.

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IRC Sec. 213(d)(1) provides the definition for medical care, which includes "expenses for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body."

Seperate plan for medical vs. dental care is an underwriting mechanism of the insurance industry, which does not alter the definition of medical care as described in Sec. 213(d)(1).

Unless dental care is specifically excluded for purposes of HCR, the IRS description above includes deltal care as care "affecting any structure or function of the body". I'm not aware of a Dental Care exclusion for purposes of HCR.

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