MADSION, Wis.—Wisconsin Gov. Scott Walker signed into law last week a bill that allows employers in the state to offer health insurance to their employees' children up to age 26 without incurring state income taxes on the coverage.
The measure, S.B. 203, brings Wisconsin's tax law into harmony with the federal health care reform law, which requires such coverage. The coverage can be extended on a tax-free basis through the end of the year in which the child turns 26, according to Internal Revenue Service rules.
Until the legislation's passage and signing into law, Wisconsin had been the only state that did not conform its tax law to the federal code. More than a dozen states, including California, have changed their laws since the start of the year. The remaining states either change their tax laws automatically each time the federal tax law changes or do not impose any income taxes.
The measure was approved Oct. 21 by the state Assembly on a 93-3 vote, and unanimously passed the state Senate that same week on a 33-0 vote.
Nationally, about 1 million young adults gained health insurance during the first quarter of 2011 due to the adult child coverage requirement, the Department of Health and Human Services reported last month.
Business Insurance Editor-at-Large Jerry Geisel contributed to this story.