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AB 570 – Do Employers Have to Cover Dependent Parents?

Is it true that there’s a new law that will require an employer to cover an employee’s parents on their health plan?

In short, no. There’s a lot of information swirling around about AB 570 (Chapter 468, Statutes of 2021), signed into law by Governor Newsom, much of which leaves out important details. AB 570, also known as the “Parent Healthcare Act,” will require individual market health plans that provide dependent coverage to make dependent coverage available to a qualified dependent parent or stepparent. This change in the law will allow an adult child to add their parents or stepparents to their individual health insurance coverage if the plan allows for dependent coverage and the applicant lives within the plan’s service area. There are a couple of other important things to note here —

• This does not apply to ANY employer-provided group health plans. It only applies to individual market plans.
• This also does not apply to Medicare supplement insurance, hospital-only, accident-only, or specific disease insurance.
• The new requirement will go into effect for individual coverage issued or renewed on or after January 1, 2023.
• The parent or stepparent will still have to meet the definition of a qualifying relative under Section 152(d) of the Internal Revenue Code.

AB 570 makes California the first state to allow certain adult children to enroll their parents in their health insurance plan. It’s a law that will affect a small number of people who may be added to an adult child’s health care coverage, but could be an important resource for a parent or stepparent who isn’t eligible for Medicare or doesn’t have the means to obtain coverage.

AP Keenan monitors pending legislation and regulations to help you keep your plans in compliance. To stay updated on this topic and other similar topics, subscribe to the AP Keenan blog, and follow AP Keenan on LinkedIn, Facebook, and Twitter.

About Amy Donovan
Amy is AP Keenan's Vice President of Legislative and Regulatory Affairs, authoring the firm's Briefings and position papers on legislation, regulation, and litigation that impact the firm and its clients.