Starting Jan. 1, 2026 (for renewals on or after that date), a new Illinois law — House Bill 5258 — will require health insurance plans that currently cover dependents to also offer coverage to a parent or stepparent of the subscriber. This marks a significant shift for both individual and group health plans in Illinois.
What the law requires
Here are the key requirements under HB 5258:
- If a health plan offers dependent coverage, it must also make available coverage for a subscriber’s parent or stepparent.
- The parent or stepparent must qualify as a “qualifying relative” under IRS §152(d).
- They must also live within the service area of the subscriber’s health plan.
- The mandate applies to:
- Individual & Family Market plans (including grandfathered and transitional plans)
- Fully insured group plans, including PPO, HMO, POS, cost-plus, minimum premium, and grandfathered/transitional plans
Effective Date & Enrollment
- The new coverage requirement applies to plan renewals on or after January 1, 2026.
- A group with a Jan. 1, 2026 renewal can begin enrolling dependent parents/stepparents during that open enrollment.
- A group with a Sept. 1, 2025 renewal would not include this option until the Sept. 1, 2026 open enrollment.
How the coverage will work
- Carriers will create a new dependent category in their enrollment systems (often labeled “Sponsored Dependent Parent”).
- For standard enrollment file formats (like 834 files), the relationship code for this dependent type will be 03.
- No special certification forms are needed—unlike some dependent categories, parents/stepparents won’t require additional documentation beyond standard eligibility rules.
Tiering & Premiums
- Tiering will follow the “Child” tier structure. Examples:
- Subscriber + dependent parent = Employee + Child tier
- Subscriber + spouse + dependent parent = Employee + Family tier
- For age-rated plans, the premium for the parent or stepparent will be based on their individual age, just like any other dependent.
Eligibility & Coordination of Benefits
- The parent/stepparent does not need to live with the subscriber—they only need to meet the qualifying-relative definition and reside in the plan’s service area.
- For Individual & Family Market plans, a dependent parent or stepparent cannot be enrolled in both Medicare and a Qualified Health Plan at the same time.
- For group plans, Medicare Secondary Payor rules apply. For example, if the parent is Medicare-eligible and the group has fewer than 100 employees, Medicare will typically remain primary.
- The mandate does not apply to standalone dental or vision insurance.
Why this matters — especially for small groups & brokers
- More flexibility for families: Employees now have the option to cover aging parents or stepparents under their employer-sponsored plans.
- Competitive advantage: Employers offering this expanded coverage may find it helps with recruitment and retention.
- Planning required: Brokers and employers need to align open enrollment communications, update enrollment materials, and be ready to explain eligibility and costs.
- Premium impact: Adding an older dependent can meaningfully change premiums, especially for age-rated plans, so cost modeling will be important.
- Educational opportunity: This mandate gives brokers a chance to demonstrate their value by preparing clients early and clearly communicating what to expect.
Action steps for brokers & employer groups
- Review group renewal dates to determine when the new law will first apply.
- Communicate early with employer groups about the new dependent category and eligibility rules.
- Ensure enrollment platforms and paperwork are updated to include “Sponsored Dependent Parent.”
- Run premium impact scenarios for groups who may be affected.
- Create clear messaging for employees so they understand how and when a parent or stepparent can be added.
- Coordinate with carriers to confirm timeline, system updates, and support materials.
Summary
House Bill 5258 expands the definition of who can be covered as a dependent in Illinois by allowing parents and stepparents to be added to health plans beginning with renewals on or after Jan. 1, 2026. For brokers and small employers, this change creates both an opportunity and a responsibility—to educate, plan ahead, and help families take full advantage of this expanded coverage option.