NATIONAL COORDINATING COMMITTEE FOR MULTIEMPLOYER PLANS

815 16th Street, N.W., Washington, DC 20006  Phone 202-737-5315  Fax 202-737-1308 

 

Mark H. Ayers Mark H. Ayers Mark H. Ayers 

Chairman 

Randy G. Randy G. Randy G. DeFrehn DeFrehn DeFrehn 

Executive Director 

 E-Mail: RDEFREHN@NCCMP.ORG

Submitted electronically via Regulations.gov

August 11, 2010 

The Honorable Phyllis Borzi 

Assistant Secretary 

Employee Benefits Security Administration 

U.S. Department of Labor 

200 Constitution Avenue, NW 

Room S-2524 

Washington, D.C. 20210 

Re: RIN 1210-AB41 

Dear Ms. Borzi: 

The National Coordinating Committee for Multiemployer Plans (the NCCMP) is pleased to 

provide these comments on the interim final rule implementing Section 2714 of the Patient 

Protection and Affordable Care Act (the “age-26 mandate”) published by the Departments of 

Labor, Treasury, and Health and Human Services (the “agencies”) on May 13, 2010. 

As you know, the NCCMP is the only national organization devoted exclusively to protecting the 

interests of the approximately twenty-six million workers, retirees, and their families who rely on 

multiemployer plans for health and welfare benefits. The NCCMP’s purpose is to assure an 

environment in which multiemployer plans can continue their vital role in providing benefits to 

working men and women. The NCCMP is a nonprofit, non-partisan organization, with members, 

plans, and plan sponsors in every major segment of the multiemployer plan universe, including 

in the airline, building and construction, entertainment, health care, hospitality, longshore, 

manufacturing, mining, retail food, service and trucking industries. 

Summary of Recommendations 

As discussed more fully below, we ask the agencies to: 

Adopt a definition of “child” that makes clear that the mandate to provide unconditional 

eligibility to age 26 does not extend beyond a well-defined core group (i.e., the participant’s 

sons/daughters, adopted children, children placed for adoption, and foster children). 

Confirm that a plan may voluntarily extend coverage to other groups of young people – such 

as grandchildren and stepchildren – subject to reasonable restrictions on eligibility linked to 

dependency or a participant’s expectation of providing (or a legal duty to provide) medical 

coverage. 
2 

Adopt a uniform national standard for when a child is considered an “adult” and therefore 

may be excluded, by grandfathered plans, if other employer-funded coverage is available – a 

critical issue for multiemployer plans that cover people who live and work in different states. 

Make it clear that age-based distinctions are allowed provided that they are not limited to 

classes of dependents. 

Clearly define the age at which grandfathered plans may take advantage of Section 

1251(a)(4)(B)(ii) of the Affordable Care Act which temporarily permits such group health 

plans to refuse to extend coverage to an “adult” child if the child has other employersponsored coverage (other than a group health plan of a parent). 

Clarify that nothing in the regulation prohibits the application of other plan provisions such 

as coordination of benefits (COB) rules when a plan elects to utilize the special transition 

rule for grandfathered plans for plan years beginning before January 1, 2014 that provides 

that a grandfathered plan may exclude an adult child who has not attained age 26 from 

coverage only if the adult child is eligible to enroll in an eligible employer-sponsored health 

plan other than a group health plan of a parent. 

Confirm that group health plans with multiple benefit schedules, including specific but 

sometimes limited-coverage, retiree-only benefit schedules, may be deemed retiree-only 

plans for the purposes of the adult child mandates.

Determine to what extent, if any, PPACA modifies existing USERRA rules for active duty 

personnel who would otherwise qualify for coverage as adult child dependent in a group 

health plan. 

These issues are of critical importance to multiemployer plans for several reasons. These plans 

typically do not have enrollment periods where participants add specific named dependents to 

the plan. They rarely require explicit participant contributions for individual or family coverage, 

not just because they want to be sure that families have coverage, but because the apparatus for 

assessing and collecting participant contributions would be cumbersome, expensive and not 

necessarily effective. Without the ability to limit their coverage of people who may be associated 

with a participant by drawing reasonable and verifiable lines, multiemployer plans are especially 

vulnerable to fraudulent claims that can be difficult to identify and resist. This could subject 

them to claims they were not in a position to anticipate when they determined their budget, 

recommended employer contribution rates to the bargaining parties, and arranged for stop-loss 

coverage. 

Introduction 

Since the interim final rule was published, multiemployer plan sponsors seeking to implement 

the law have raised several questions concerning which children are subject to the law. Some 

groups of children (e.g., a participant’s son or daughter or adopted child) are clearly 

encompassed by the age-26 mandate. However, it is not clear whether the age-26 mandate 

applies when plans extend coverage beyond that core group of children to other groups such as 

grandchildren, stepchildren, or legal guardianship situations. The regulations require 

continuation of coverage to age 26 with no additional surcharge and no change in benefits. The 

cost implications of these rules, combined with the prohibition on having eligibility requirements 

other than "the relationship between the child and the participant" and age (typical requirements 
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include residence with the participant and/or financial dependence), make it essential for plan 

sponsors to know with certainty to which categories of children the mandate applies. 

Accordingly, we urge the agencies to provide a clear definition of the term “child” for purposes 

of the age-26 mandate so that plan sponsors know which groups of children, if covered by the 

plan, must be covered to age 26 and without any other eligibility requirements being imposed. 

We also urge the agencies to allow plan sponsors to maintain flexibility as to which groups of 

children they choose to cover. Without clear guidance, some plan sponsors would eliminate 

coverage for certain groups of children altogether in order to assure that the plan is not exposed 

to costs that cannot be anticipated. 

Multiemployer Plans Typically Cover a Range of Individuals Under the General Category 

of “Dependent Children” 

Many multiemployer plans cover various types of “children” who are not the participant’s child 

and who may be “children” only in the sense that they are young people. This group includes 

grandchildren, stepchildren, legal guardianships (where the young person may or may not be 

related (e.g., niece/nephew) to the employee), foster children, and children of domestic partners. 

Plan documents and summary plan descriptions typically lump these young people together with 

the participant's children under the general category of “dependent children,” and that becomes a 

general term used throughout the documents to refer to these individuals as a group (e.g., 

eligibility for continuation coverage under COBRA).

Multiemployer plans also include specific eligibility requirements for these types of dependents , 

such as a requirement that the person live in the participant’s home and/or rely on the participant 

for more than half of her or his support. These extra eligibility requirements stem in part from the 

applicable tax requirements (i.e., the complex definitions of “qualifying child” or “qualifying 

relative” under IRC §152), but also from the understandable desire on the part of plan sponsors 

to extend coverage only where the functional equivalent of a parent-child relationship exists. 

Plans often cover stepchildren, but again typically only in certain situations (e.g., only if the 

stepchild lives in the participant’s home in a parent-child relationship and/or relies on the 

participant for more than half of his or her support). Many multiemployer plans will also cover 

grandchildren, but only where the participant is raising the child in a parent-child relationship 

and providing for their grandchild's support. In many cases, grandchildren are only covered if a 

participant has been appointed as a legal guardian.

While plans that provide dependent coverage are also legally required to cover children who are 

adopted or placed for adoption, plans are not required to extend coverage to additional categories 

of children. These voluntary extensions of coverage are made to enable participants who 

function as the children’s parents to cover them under their health plan, but the extensions of 

coverage come with a condition that there must be some evidence of that parent-child 

relationship. Absent the ability to place restrictions upon the coverage provided to these 

categories of children (e.g., stepchildren, legal guardianships, grandchildren), the plan could face 

unforeseen costs by being required to cover children who are not living with the participant and 

not dependent upon the participant for their support. 
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Many multiemployer plans do not have an open enrollment period during which a participant 

enrolls dependents, including dependent children. Typically a multiemployer plan provides 

eligibility to the participant when they satisfy the plan’s eligibility criteria. Generally, in a 

multiemployer health plan, eligibility continues as long as the participant continues to work 

sufficient hours during an eligibility period to earn coverage during a coverage period. 

Dependents of the participant are not necessarily enrolled during the coverage periods – instead, 

the plan will accept claims from dependents and verify eligibility prior to paying the claim. 

Consequently, unlike plans that may have an open enrollment period where dependents are 

identified, multiemployer plans do not generally identify and verify dependent status at the 

beginning of a plan year. The plan could face claims from individuals claiming dependent status 

and be unable to determine whether a parent-child relationship actually exists with the 

participant. Being able to maintain plan language requiring such verification is critically 

important to assuring that only dependents with a parent-child relationship to the participant are 

covered. This reduces the opportunity to manipulate by people whom the plan (and maybe even 

the participant) may not have known about until they were on the brink of incurring catastrophic 

medical expenses. A prime example would be stepchildren for which the participant’s spouse 

does not have custody or legal responsibility to provide medical coverage. 

A Broad Definition of “Child” Would Impose Additional Costs and Hardships and Could 

Have Unintended Consequences 

If a multiemployer plan sponsor extends coverage beyond a well-defined narrow group 

consisting of the participant’s children, the plan sponsor should be allowed to include additional 

eligibility requirements other than "the relationship between the child and the participant" and 

age and to terminate coverage prior to age 26. In other words, the age-26 mandate should not 

apply to this larger set of individualsFor example, if a plan sponsor voluntarily covers 

grandchildren, the plan sponsor should be allowed to continue to apply typical eligibility 

requirements (e.g., that the grandchild live in the employee's home). If the age-26 mandate 

applies to this group, with the result that the plan must cover all grandchildren up to age 26 

without any other eligibility requirements, this would represent a significant and irrational 

expansion of coverage, resulting in additional costs to the plan – an odd result considering the 

statute’s (and the interim final rule’s) express language that the age-26 mandate does not require 

that grandchildren be covered. The alternative would be that the plan eliminate coverage for 

grandchildren entirely, leaving the grandchildren that actually have a parent-child relationship 

with the participant with no coverage? Certainly this cannot have been the intent. 

Extending the age-26 mandate to grandchildren would also result in the need to impute income 

to participants in some situations in which the grandchildren do not fit within the new simplified 

tax rule (which applies only to a child defined in IRC §152(f)). The inability to include the 

applicable tax requirements as eligibility requirements, coupled with the need to determine 

which specific grandchildren may receive health coverage on a tax-free basis, would create 

administrative hardships for plan sponsors. Rather than attempting to address those hardships, 

many plan sponsors would choose instead to eliminate coverage for grandchildren (or other 

groups) altogether. 
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The same issues apply to other groups – such as legal guardianship situations and children of 

domestic partners. If the age-26 mandate applies to these groups, it would represent a significant 

expansion of coverage, compounded by the additional tax burdens.1 

Even though stepchildren get the benefit of the new simplified tax rule, we urge the agencies to 

state that stepchildren are not encompassed by the age-26 mandate. This would permit plan 

sponsors to terminate coverage prior to age 26 and to continue to apply typical eligibility 

requirements to stepchildren, so that plan sponsors have the ability to extend coverage only 

where a true parent-child relationship exists between the participant and the stepchild. 

Recommendation 

It is our view that the universe of children to whom the mandate should apply should be 

narrowly defined by the agencies for purposes of the age-26 mandate and apply only to some 

categories of the children encompassed by IRC §152(f) – specifically, the participant’s 

sons/daughters, adopted children (including those placed for adoption), and eligible foster 

children – but not include stepchildren. Children, adopted children, and foster children are all 

either required to be covered under current law or under a legal requirement, such as a placement 

by a child protection agency. Our reasoning for excluding stepchildren is set out above – 

principally that the plan needs to be able to verify that the stepchildren are living in a parentchild relationship with the participant. 

In addition, the agencies should make it clear that plans may voluntarily choose to cover other 

categories of children (e.g. grandchildren or stepchildren) who meet certain reasonable tests. . If 

the agencies decline to define “child” for purposes of the age-26 mandate, we ask the agencies to 

indicate whether plan sponsors have the flexibility to create new categories of non-adult 

beneficiaries outside the general category of “dependent children” – categories to which the age26 mandate would not apply. Such a category could be labeled “Covered Individuals” and could 

include at a minimum grandchildren, legal guardianships, and children of domestic partners. This 

approach, while potentially useful as an approach to the age-26 mandate, would raise questions 

about how other requirements (e.g., COBRA) would apply to these individuals. 

Plan Sponsors Need Flexibility and Certainty 

We understand that in declining initially to define the term “child,” the agencies wanted to 

preserve the flexibility that plan sponsors currently have in deciding which groups of "children" 

to cover. Our suggestions preserve that flexibility while providing plan sponsors with certainty 

about what rules apply if they choose voluntarily to cover certain groups. The agencies could 

provide clear guidance while preserving plan sponsor flexibility by defining the universe of 

children to which the age-26 mandate applies by reference to §152(f) – but preferably minus 

 

1

 We recognize that children of domestic partners rarely qualify for tax-free health coverage because they are typically 

the "qualifying child" of the domestic partner and thus cannot be the "qualifying relative" of the employee. That said, 

it is still important to know whether plans may impose additional eligibility requirements on the domestic partner's 

children and/or terminate coverage at some age younger than 26. 
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stepchildren.2 Plan sponsors could then decide which of those §152(f) children the plan would 

cover (e.g., sons/daughters and adopted/placed for adoption, but not foster children). Any other 

groups of young people (e.g., grandchildren) would fall outside the scope of the age-26 mandate, 

thus allowing plan sponsors to tailor the plan’s eligibility requirements to the applicable tax 

requirements or as the plan sponsor otherwise deems appropriate. 

Without clear rules to guide them, plan sponsors facing escalating costs while trying to comply 

with the age-26 mandate face a difficult choice: treat all young people the same (cover to age 26 

and eliminate eligibility requirements other than the relationship between the child and the 

participant" and age) or eliminate coverage for certain groups entirely. 

Age Based Distinctions 

The regulations provide that there must be uniformity of coverage for dependents irrespective of 

age. Clarification is requested to make it clear that age-based distinctions are allowed provided 

that they are not limited to classes of dependents. For example, a plan may cover corrective laser 

eye surgery until age 25, provided that this rule applies equally to participants and dependents. 

The plan should be allowed to enforce this distinction because it is plan-wide and not limited to 

classes of dependents.

Adult Children with other Employment-Based Coverage

Another issue we request the agencies to address is the definition of “adult” child. Section 

1251(a)(4)(B)(ii) of the Affordable Care Act temporarily permits grandfathered group health 

plans to refuse to extend coverage to an “adult” child if the child has other employer-sponsored 

coverage (other than a group health plan of a parent). The interim final rule does not explain 

what “adult” means in this context, so it is not clear at which age plans may deny coverage to 

“adult” children with other coverage. We encourage the agencies to draw a clear line, such as age 

18, so that plan sponsors taking advantage of this option (until January 1, 2014) can develop 

eligibility requirements and devise administrative processes that comply with the law. 

A search for the legal definition of "adult" revealed that an individual becomes an "adult" at 

different ages for different purposes. Does this refer to the age at which a child may contract, or 

marry or vote or legally drink alcohol? Is adulthood the same as the "age of majority"? In the 

United States the "age of majority" is 18 in all jurisdictions except for Alabama and Nebraska 

(age 19); Mississippi and Puerto Rico (age 21). Pennsylvania defines an "adult" as one who is 

age 18 or older but the "age of majority in Pennsylvania is 213

. 

 

2

 Plan sponsors could still choose to cover stepchildren on the same terms as a participant’s own children, but they 

should not be required to do so. 

3

See http://minors.uslegal.com/age-of-majority/california-age-of-majority-law/ 
7 

We also encourage that the agencies reconsider applying this provision only to grandfathered 

group health plans. There is no consistent statutory rationale for eliminating the ability of a nongrandfathered plan to limit coverage only to those children who do not have a right to their own 

employer-sponsored coverage. The ability to screen out children who already have access to 

coverage can result in substantial cost savings to a multiemployer plan, with little or no effect on 

the children themselves. Consequently, the ability to exclude these children should not be 

limited only to grandfathered health plans. 

Transition Rule for Grandfathered Plans – Coordination of Benefits 

The regulations provide a special transition rule for grandfathered plans for plan years beginning 

before January 1, 2014. That rule provides that a grandfathered plan may exclude an adult child 

who has not attained age 26 from coverage only if the adult child is eligible to enroll in an 

eligible employer-sponsored health plan other than a group health plan of a parent. The preamble 

provides that in the case of an adult child who is eligible for coverage under the plans of the 

employers of both parents, neither plan may exclude the adult child from coverage based on the 

fact that the adult child is eligible to enroll in the plan of the other parent's employer. 

Clarification is requested to make clear that nothing in the regulation prohibits the application of 

other plan provisions such as coordination of benefits (COB) rules in such circumstances. That 

is, the adult child would have coverage, but other plan rules regarding coverage (such as COB 

rules) would still apply. 

USERRA 

Under USERRA, a group health plan can require that an individual who is on active military 

duty for more than 30 days pay up to 102% of the full premium for continued health insurance 

coverage. Prior to health care reform, many multiemployer group health plans had provisions in 

which active duty adult children of plan participants were not considered dependents and so the 

USERRA premiums applied. 

Under the PPACA adult child rules, a group health plan generally must provide coverage to 

adult children under age 26, regardless of employment or eligibility for other coverage. We 

request clarification as to whether a group health plan must provide coverage for an otherwise 

eligible adult child who is on active military duty for more than 30 days. In other words, does 

PPACA impact existing USERRA rules for active duty personnel who would otherwise qualify 

for coverage as adult child dependent in a group health plan? 

Treatment of Retiree-Only Benefit Options and Benefit Schedules 

As you know, multiemployer group health plans often have multiple benefit schedules within a 

single plan. For example, a plan may offer multiple benefit schedules with each schedule 

covering a particular category of participant – e.g. active employees and retirees, which are 

further classified as early retirees and Medicare eligible retirees. Often, retiree schedules of 

benefits may offer less generous benefits than those offered under the active employees’ 

schedules, but they often do so at very competitive and sometimes highly subsidized premiums. 
The preamble to the interim final rules pertaining to grandfathered

indicates that certain provisions of the Afforda

not apply to retiree-only health plans. 

As group health plans with multiple benefit 

they experience difficulties in reconciling the many requirements of T

Care Act (including adult child coverage) with the sometimes limited

through retiree-only benefit schedules. In effect, mandatory compliance with the Title I would 

prohibitively increase the cost

schedules to the point where plans will have to increase premiums to levels that many retirees 

would not be able to afford coverage or 

option for these plans and the retirees they cover is to exclude retiree participants from the 

mandates of Title I. 

Accordingly, we request clarification with respect to whether plans that have established separate 

active and retiree-only schedule of benefits under one

mandates of Title I of the Affordable Care Act, including adult child coverage requirements. 

Thank you for the opportunity to provide com

to provide any additional information that you might find useful.

 

8 

The preamble to the interim final rules pertaining to grandfathered-status group health plans 

indicates that certain provisions of the Affordable Care Act, including adult child coverage, do 

only health plans. 

As group health plans with multiple benefit schedules begin implementing the adult child rules, 

they experience difficulties in reconciling the many requirements of Title I of the Affordable 

Care Act (including adult child coverage) with the sometimes limited-coverage benefits provided 

only benefit schedules. In effect, mandatory compliance with the Title I would 

prohibitively increase the cost-sharing and premium requirements for retiree

schedules to the point where plans will have to increase premiums to levels that many retirees 

would not be able to afford coverage or would eliminate retiree coverage altogether. A better 

plans and the retirees they cover is to exclude retiree participants from the 

Accordingly, we request clarification with respect to whether plans that have established separate 

only schedule of benefits under one plan could exclude retirees from the 

mandates of Title I of the Affordable Care Act, including adult child coverage requirements. 

Thank you for the opportunity to provide comments on this important issue. We will be pleased 

ormation that you might find useful.

Sincerely, 

Randy G. DeFrehn 

 Executive Director 

status group health plans 

ble Care Act, including adult child coverage, do 

begin implementing the adult child rules, 

itle I of the Affordable 

coverage benefits provided 

only benefit schedules. In effect, mandatory compliance with the Title I would 

and premium requirements for retiree-only benefit 

schedules to the point where plans will have to increase premiums to levels that many retirees 

eliminate retiree coverage altogether. A better 

plans and the retirees they cover is to exclude retiree participants from the 

Accordingly, we request clarification with respect to whether plans that have established separate 

plan could exclude retirees from the 

mandates of Title I of the Affordable Care Act, including adult child coverage requirements. 

We will be pleased