A part of the PPACA (ObamaCare) provides that parents may add children to their employer-sponsored coverage plan up to age 26, whether a dependent student or not.
Turns out California's tax law requires the state to levy taxes on any amount of premium paid by the employer for non-dependent children of employees.
Many California workers added non-dependent children under age 26 to their group health plans in favor of paying premiums for the coverage. According the the Sacramento Bee article, the result is a bump in taxable income to reflect the employer's contribution.
See the article here.