Quick Answer: The New Jersey DU31 law may allow an employee’s child to remain on or enroll in a parent’s qualifying employer health plan after aging out of regular dependent coverage, commonly at age 26, and continue until age 31. DU31 generally applies to group health benefits plans issued in New Jersey regardless of employer size, but not to most private self-funded plans or policies issued in another state. The young adult must meet specific eligibility rules, and the employer is not required to pay for DU31 coverage.
What Happens to Health Coverage When a Child Turns 26?
Federal rules generally allow children to remain on a parent’s health plan until age 26 when the plan offers dependent coverage. The exact date coverage ends can vary. Depending on the plan, a child may age out on the 26th birthday, at the end of that month, at the end of the year, or on another date stated in the plan.
If the parent’s group plan is subject to DU31, an eligible young adult may be able to continue coverage or enroll as an over-age dependent. DU31 coverage can continue until the young adult turns 31, provided the plan, parent, and young adult continue to meet the law’s requirements.
Which Employer Health Plans Are Subject to DU31?
Employer size does not determine whether DU31 applies. The more important questions are how the health plan is funded and where an insurance policy was issued.
| Type of Health Plan | Does DU31 Generally Apply? |
|---|---|
| Insured group health plan issued in New Jersey | Yes |
| New Jersey State Health Benefits Plan | Yes |
| Private self-funded employer plan | Generally no |
| Group insurance policy issued outside New Jersey | No under DU31 |
| Plan that does not allow dependent coverage | No |
An employee can live and work in New Jersey and still have employer coverage that is not subject to DU31. Employers should verify whether their plan is insured or self-funded and, for insured coverage, where the group policy was issued. An insurer’s name on the ID card alone does not establish that the plan is insured because self-funded employers often hire insurance companies to administer claims.
Who Is Eligible for Coverage Under DU31?
Turning 26 does not automatically guarantee coverage until age 31. The employer’s plan, the employee-parent, and the young adult all must satisfy DU31 requirements.
| DU31 Requirement | General Rule |
|---|---|
| Age | Older than the plan’s regular dependent limiting age but younger than 31 |
| Relationship status | Cannot have a spouse, civil union partner, or domestic partner |
| Children | Cannot have children |
| Residence | Must live in New Jersey, or be a full-time student if living elsewhere |
| Other health coverage | Cannot be covered by another group, church, or individual health benefits plan or be entitled to Medicare when DU31 coverage begins |
| Parent’s coverage | Parent must remain covered under a plan subject to DU31 |
| Other eligible dependents | Parent generally must cover other eligible dependents unless their coverage was waived because they have qualifying group or government-sponsored coverage |
| Dependent coverage | The parent’s plan must allow dependent enrollment |
A young adult does not have to live with the parent, be financially dependent on the parent, exhaust COBRA first, or prove that they previously aged out of the parent’s plan. NJDOBI also states that prior coverage does not determine DU31 eligibility.
Being eligible for coverage through the young adult’s own employer does not automatically prevent a DU31 election. However, the young adult generally cannot remain covered under another specified health plan when DU31 coverage actually takes effect.
When Can a Young Adult Elect DU31 Coverage?
For a child already covered under a parent’s qualifying plan as age 26 approaches, DU31 generally provides an election period during the 30 days before the 26th birthday and 30 days after reaching age 26 or aging out. An election during that period can allow coverage to continue without a break.
DU31 is not limited to that first age-out period. An eligible young adult may also enroll within 30 days after later establishing DU31 eligibility or during the group’s annual employee open enrollment period, which must be at least 30 days. Eligibility can be established and re-established more than once before age 31 as long as the requirements are met.
Does the Employer Have to Pay for DU31 Coverage?
No. The New Jersey DU31 law does not require an employer to contribute toward an over-age dependent’s premium. The young adult may be responsible for the full cost and can generally be charged the applicable group premium plus a 2% administrative fee, or up to 102% of the applicable rate.
Employers should separate the obligation to make DU31 enrollment available when the law applies from any decision to subsidize the cost. The actual premium depends on the group plan and should be confirmed with the employer, carrier, or plan administrator.
What Should Employers Do When an Employee's Child Is Aging Out?
When an employee’s child approaches the plan’s dependent limiting age, employers should check the plan before assuming coverage simply ends at 26:
- Confirm the plan type. Determine whether it is insured or self-funded and, if insured, where the policy was issued.
- Confirm the age-out date. Check when regular dependent eligibility actually ends under the plan.
- Review DU31 eligibility. Make sure the parent, young adult, and group plan meet the applicable requirements.
- Provide enrollment information. Direct the employee or young adult to the appropriate DU31 forms, carrier, or plan administrator.
- Check the enrollment window. Pay particular attention to the 30-day periods around age-out when the child is already covered.
If the group plan is subject to DU31 and the young adult satisfies the requirements, NJDOBI states that the employer and carrier cannot refuse the eligible young adult the opportunity to enroll as an over-age dependent.
How Is DU31 Different From COBRA?
DU31 is separate from COBRA and New Jersey Small Group Continuation. COBRA or NJSGC can generally provide up to 36 months of continuation after a child ages out, while DU31 may remain available until age 31 as long as the young adult continues to qualify. A young adult does not have to exhaust COBRA or NJSGC before making a DU31 election.
Frequently Asked Questions About the New Jersey DU31 Law
No. DU31 gives an eligible young adult the opportunity to elect over-age dependent coverage. The parent’s plan must be subject to DU31, and the young adult must continue satisfying the eligibility requirements for coverage to continue.
Not always. A young adult who does not live in New Jersey may still qualify if they are a full-time student at an accredited public or private institution of higher education and meet the other DU31 requirements.
Potentially, yes. Eligibility for another employer’s plan does not by itself prevent a DU31 election. The young adult generally cannot actually be covered by that other plan when DU31 coverage becomes effective.
No. DU31 does not require the employer to contribute toward the over-age dependent’s premium. The young adult may have to pay up to 102% of the applicable group rate.
Yes, potentially. Age-out is not the only opportunity to elect DU31, and an eligible young adult may establish or re-establish eligibility before age 31, subject to the applicable enrollment periods.
