New law to affect dependent eligibility, flexible spending accounts

University Park, Pa. -- Two aspects of the national Patient Protection and Affordable Care Act signed into law in March will begin to affect Penn State faculty and staff in the immediate and near future.

A provision to expand dependent eligibility will be implemented at the University beginning June 1. In addition, starting Jan. 1, 2011, over-the-counter medications and health care supplies not prescribed by a physician will no longer be eligible for reimbursement from health care flexible spending accounts. A letter has been sent by the Office of Human Resources to faculty and staff addressing these changes.

The health care reform law requires that health plans cover adult children up to age 26 without regard for student, marital or tax-dependent status. The June 1 implementation by Penn State is sooner than required by law, and the University also will extend expanded dependent eligibility for dental and vision coverage.

A graduating child under the age of 26 can remain on an employee's Penn State health, dental and vision coverage with no action required. Employees may enroll a child under the age of 26 who is currently not covered for a June 1 coverage date by following the instructions at

No additional cost will be incurred for children currently enrolled. Those changing from employee-only to family coverage will contribute the current family contribution rate. Faculty and staff also will have the option of enrolling eligible children each year during open enrollment.

Another provision of health care reform prohibits reimbursements from flexible spending accounts for the purchase over-the-counter medications and supplies that have not been prescribed. This will go into effect for Penn State employees beginning Jan. 1, 2011. Funds remaining in employees' accounts at the end of 2010 may not be used those for over-the-counter items purchased on or after Jan. 1, 2011.

Human Resources recommends faculty and staff with planned over-the-counter expenditures make those purchases prior to Dec. 31. A list of reimbursable health care expenses will be available in the fall to help estimate out-of-pocket expenses for 2011.

All faculty and staff will be notified regarding further provisions of the new law as Penn State makes plans for their implementation.

For questions, refer to the Frequently Asked Questions on the Employee Benefits website at or email

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Last Updated April 15, 2011