Legislative Update

On February 4, the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) was signed into law. CHIPRA allows states to subsidize premiums for employer-provided group health coverage for eligible children, but it also imposes certain requirements on plan sponsors.

About CHIP
The Children's Health Insurance Program (CHIP) is jointly financed by the federal and state governments and is administered by the states. Within broad federal guidelines, each state determines the design of its program, eligibility groups, benefit packages, payment levels for coverage, and administrative and operating procedures.

New Special Enrollment Provisions:
Beginning April 1, 2009 group health plans must permit employees and their dependents that are “eligible but not enrolled for coverage” to enroll in group health plan coverage under two scenarios:

1. The employee’s or dependent’s Medicaid or CHIP coverage is
   terminated as a result of loss of eligibility.
2. The employee or dependent becomes eligible for group health plan
   premium assistance under a Medicaid or State children’s health insurance program.
   

These two new 60-day special enrollment rights are in addition to the existing 30-day group health plan special enrollment rights related to loss of eligibility of coverage or the addition of a new spouse or dependent.

Responsibility of the Plan Sponsor (As we understand it at this time)

1. Notify employees of the new special enrollment opportunity. Employers must notify their employees about the new enrollment rights as soon as possible, no later than April 1, 2009.
   
2. Permit eligible employees to enroll under the terms of the special enrollment.
   Effective April 1, 2009, a plan sponsor of a group health plan must permit employees and dependents who are eligible but not enrolled for coverage to enroll in that coverage if:
   
   • The employee’s or dependent’s Medicaid or CHIP coverage is terminated as a result of loss of eligibility; or
   • The employee or dependent becomes eligible for a premium assistance subsidy under Medicaid or CHIP.
     
3. Review and amend plan benefit documents. CHIPRA imposes certain notification requirements on sponsors and administrators of health plans to inform employees of the potential opportunities for premium assistance. With regard to requirement 3, plan sponsors will receive some assistance with respect to this disclosure since CHIPRA directs Health and Human Services (HHS) to develop national and state-specific model notices by February 4, 2010. These notices will then be used by plan sponsors to satisfy their disclosure obligations for the plan year enrollment following release of the model notices.
   
   
4. Be prepared to provide disclosure to state agencies if requested. The law requires plan administrators to disclose to states, upon request, information about when a plan participant or beneficiary is covered under the company’s group health plan and Medicaid or CHIP. Health and Human Services and the U.S. Department of Labor will be developing a model disclosure form for this purpose. States may not request this information until the first plan year that begins after the date on which the model form is first issued.
   

As always, Resource Brokerage will be working diligently to keep you informed of the ever changing legislative landscape.  If you have any questions or need assistance in any way, feel free to call our office.

Click Here for Sample Notice

This review is meant for Resource Brokerage, LLC brokers for informational purposes only and is not intended to be quoted or relied upon as legal or tax advice. 

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