Employers should not expect the Patient Protection and Affordable Care Act (PPACA) to be overturned or repealed any time soon, Heather Meade, a benefits attorney with Ernst & Young LLP, said at a recent D.C. Bar panel discussion on health reform.

Employers instead should focus on determining what steps they must take to comply with the law, Meade said. Referring to bills introduced in the legislatures of 39 states seeking to change PPACA, Meade said they are more political than legal.

One of the major questions employers are asking about PPACA is how to maintain grandfather status, Ian Herbert, an attorney with Greenberg Traurig, McLean, VA, said.

A grandfathered plan is one that was in effect on the date of PPACA's enactment, March 23. Such plans are exempt from many of the health reform law's provisions.

The question is especially relevant for plans that provide coverage to dependent grandchildren. The departments of Labor, Health and Human Services, and Treasury released interim final regulations implementing PPACA's requirement to extend coverage to adult children up to age 26. The Internal Revenue Service in Notice 2010-38 said if a plan offers coverage to a dependent through the child's 26th year, coverage for the dependent will still be tax-exempt. Plans are not required to offer coverage to a child's child.

But guidance still is needed on defining a dependent, Herbert said. PPACA does not condition dependent status on student status, financial dependency, or residing with a parent. If a plan currently covers grandchildren, it is unclear whether it must continue to cover grandchildren past the effective date for changes under PPACA, which is for plan years beginning on or after Sept. 23, 2010, he said.

Under the tax code, a dependent is defined only as a “qualifying child, or a qualifying relative.” Due to the lack of clarity in PPACA's definition, and the tax code definition, employers are wondering if they can drop provisions that allow dependent grandchildren to be covered before Sept. 23 without losing their plans' grandfathered status, Herbert said.

The interim final regulations provide adult children with a special enrollment status, allowing them to enroll in a health plan mid-year, according to Joanna Kerpen, an associate with McDermott Will & Emery, Washington, D.C. Parents who are not currently covered by their employer's plan also have access to the special enrollment status.

Although there is no federal tax consequence of enrolling dependents in health plans, there may be state tax consequences, Kerpen added.

Copyright 2010, The Bureau of National Affairs, Inc.