Helping Employees Understand Over Age Dependent Coverage

September means a new month of changing colours, cooler breezes, and shorter days. It’s a time when the relaxation of summer starts to give way to fuller and busier schedules as we all set goals and make plans for the remainder of the year.

September is also the month where many young adults across Canada head to colleges and universities to continue their education. As the school season begins, employees will want to know what steps they need to take to ensure their children over 21 (technical term is Over-age Dependent) are still covered under their employee benefits package.

Over-Age Dependent Insurance Coverage: What Employers Need to Know 

Dependents and spouses in Canada are eligible for the following benefits:

• Medical Services Plan
• Extended Health benefits
• Dental benefits
• Employee and Family Assistance Program
• Dependent Life Insurance
• Optional Life
• Health Spending Account

In this blog we will focus on what Human Resource managers need to know about extended health and dental benefits and how they can help employees understand the regulations related to dependent coverage.

To understand how long a child can stay on their parent’s health insurance, must first review the following:

Dependents under age 21 are eligible for benefits as long as they are not married or in any other formal union recognized by law. 

Dependents over the age of 21 may still be eligible for benefits coverage if they meet all of the following requirements:

• They are in school full-time at an accredited college, university, trade school, technical school, or high school
• They are over the age of 21 but under 25 (26 in Quebec)
• They are entirely dependent on your employee (the plan member)

Alternatively, a dependent is entitled to coverage if they are incapable of supporting themselves because of a physical or mental disorder that began:

• Before they turned 21 or
• While they are students under age 25 and the disorder has been continuous since it began. (If this is the case the disabled dependent is eligible to remain on their parents’ coverage indefinitely.)

Updating and Waiving Coverage

Can a dependent be insured under the benefits plans of both parents? 

The answer is, dependent children can be covered under both parent's plans if both parents have family benefits coverage. Coordination of benefits comes into play as to which parent’s plan pays 1st and which one pays 2nd. COB rules determine that the benefits plan of parents with the 1^st birthdays in the calendar year will always act as the first payer of claims for their children. Any amounts not covered are then directed to the other parent’s plan as their second payer of claims.

If the application for coverage is made after the 31 day window, the insurance carrier has the right to refuse coverage. If coverage is granted, it will be effective as of the date of approval and usually have a restriction added to any dental claims in the first 12 months of coverage.

How Can You, As An Employer, Help?

To help keep your employees in the know and ensure their dependents receive continuous coverage, you can direct them to take the following steps:

1. They need to confirm the over-age student’s status as a full-time student when they submit their claims. Emphasize the importance of this step if the dependents have either recently become over-age students or they no longer qualify (as a result of turning 25 years old, or 26 in Quebec.)
2. They need to let your benefits administrator know once the dependent qualifies as an over-age student. Otherwise, their claims will be declined.
3.  After that, whenever your employee submits a claim, let them know to simply check ‘Yes’ where it asks them to confirm if their dependent is a full-time student. 
4. When they visit the dentist, the over-age student can let the dentist know that they’re in school full-time. This is important because most dentists submit claims electronically.

Conclusion

Understanding over-age dependent coverage puts you in a position to be of service to your employees when they need clarity on the issue. While there are variations in the types of dependents eligible for coverage, the actions your employees need to take to ensure their dependents are receiving benefits are straightforward. 

However, should any concerns arise, we recommend getting in touch with a skilled employee benefits advisor. An advisor is an essential partner for your business, as you work to take care of your people and be a trusted resource of information for your team.

Wondering what it takes to administer an employee group benefits plan efficiently and effectively? Enrol in our Canadian Benefits 103: How To's of Plan Administration webinar: