In order to avoid penalties under the Affordable Care Act, applicable large employers must also offer affordable health insurance coverage that provides a certain minimum value to all full-time employees' dependents. Generally, an employer meets this requirement by offering coverage to at least 95% of full-time employees (and their dependents).
A dependent is defined as a child who is under age 26. A child is considered age 26 on his or her 26th birthday. A child is a son, daughter, stepson, stepdaughter, adopted child, or eligible foster child.
An adopted child is an individual who is legally adopted or lawfully placed with the employee for legal adoption.
An eligible foster child is an individual placed with the employee by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.
Therefore, generally, an employee's children must be offered affordable health benefits until they reach age 26. The child does not have to be a dependent for income tax purposes.
The term "dependent" for this purpose does not include an employee's spouse. Many employers offer health benefits to employees and their spouses and children and they can continue to do so. However, an applicable large employer will not be subject to these penalties for not offering coverage to an employee's spouse.
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