If the dependent is a child (son, daughter, step child, or foster child) of the taxpayer/covered member and will not reach the age of 27 during the year then he may remain covered under his parent(s) plan and his coverage for health care including insurance, FSA, and HRA coverage is not taxable. Also, student status is irrelevant.
The dependent definition expansion is effective immediately, but not mandatory. In other words, a plan may adopt a more restrictive definition of a covered dependent. All DataPath template documents for FSA and HRA plans refer to Code Section 105(b) when defining a dependent for coverage purposes. Therefore, no change is needed to incorporate the expanded dependent definition into your existing plans. However, if the documents have been modified to refer to dependents as defined in Code Section 152 only, then the expanded definition does not apply.
You can see the reference to Code Section 105(b) in Section 1.10 of the FSA Plan Document (FSA Plan Document v6_122005.doc); Q-2 in the FSA SPD (FSA Summary Plan Description v6_032009_schip.doc); Section 1.02 in the HRA Plan Document (hra_plan_doc_rev_3_2009.doc) which refers to the HRA SPD (HRA_SPD_rev_4_2009_schip_card.doc) Section 1.12.
