Congresswoman Laura Richardson Announces That Tax-free Employer-provided Health Coverage Is Now Available For Young Adults

Today, Congresswoman Laura Richardson announced that the Internal Revenue Service has issued an announcement that employer-provided health coverage for adult children under the age of 27 is now tax-free for constituents of the 37th District.
These changes immediately allow employers with cafeteria plans -- plans that allow employees to choose from a menu of tax-free benefit options and cash or taxable benefits -- to permit employees to begin making pre-tax contributions to pay for this expanded benefit.

"With families across the 37th District continuing to hurt in this tough economy, these changes will help them to save money, while providing access to healthcare for their children," Congresswoman Richardson said. "I am also happy to see several health insurance companies already acting to help the families of the 37th District keep affordable healthcare for their youn adult children as they graduate from college this Spring."

A key provision of health care reform requires health plans to allow young adults under the age of 26 to remain on their parents' insurance policy, at the parents' choice, effective September 2010. In the last two weeks, more than 65 health insurance companies have agreed to implement this key provision early. This early implementation will avoid gaps in coverage for many graduating college seniors and certain other young adults and save on insurance company administrative costs of dis-enrolling and re-enrolling them between May 2010 and September 23, 2010.

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