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| Posted on: Monday, March 9, 2009 |
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On February 4, 2009, Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) was signed into law. CHIPRA requires group health plans amend their Special Enrollment rights permitting children who lose Medicaid or Children’s Health Insurance Program (CHIP) coverage, as well as participants or dependents who become eligible for a subsidy under Medicaid or CHIP to enroll in the group health plan. CHIPRA also contains new notice and disclosure requirements for group health plans.
As background, the Balanced Budget Act of 1997 created CHIP. This program gave states federal matching funds to provide subsidies to insure low-income children who are ineligible for Medicaid but who cannot afford private insurance.
Special Enrollment Rights Must Be Expanded
As of April 1, 2009, group health plans (fully insured and self-funded) must permit eligible employees and their dependents to request enrollment in the Plan within 60 days from the date of the following loss or gain in coverage:
1. Lose Medicaid or CHIP coverage; or
2. Become eligible to participate in a Medicaid or CHIP premium
assistance program.
This differs from current Special Enrollment rights which require employees and their eligible dependents notify the Plan within 31 days of a Special Enrollment event in order to make a change to their enrollment election.
Assistance Program Notice Requirement
States that adopt a premium assistance program under CHIP or a medical assistance program under Medicaid shall impose a notice requirement on group health plans to inform participants of the assistance program. The program would subsidize their premiums so they can enroll in their employer’s group health plan rather than Medicaid or CHIP. At this time, which states will adopt the premium assistance program is unknown. The premium assistance subsidy will be made either as a reimbursement to the employee or as a direct payment to the employer (unless the employer opts out of receiving direct payments) for enrollment in the employer’s “qualified” group health plan.
The DOL/HHS will release model notices no later than February 4, 2010. Plan Sponsors must distribute them as of the first Plan Year beginning after the model notices are released. The notice should be included in either the Plan’s enrollment materials or the Plan Document/SPD.
State Disclosure Requirement
The state may request Plan Sponsors disclose information sufficient for the state to determine the cost-effectiveness of providing premium assistance for the purchase of coverage under group health plans. This state disclosure requirement becomes effective after the model notices are released (exact date TBD)
Employer Compliance Roadmap
Plan Sponsors must take the following actions in order to comply with CHIPRA:
1. Amend the Plan’s Special Enrollment notice and/or Plan
Document/SPD explaining the CHIPRA Special Enrollment rights and the
60-day enrollment period. The Amendment must be effective 4/1/09;
2. As of April 1, 2009, administer eligibility in compliance with these
new Special Enrollment rules;
3. As soon as reasonably possible but in no case later than 90 days
after April 1, 2009 (by July 1, 2009), send notification to all benefit eligible
employees of these new Special Enrollment rights. For sample
communication pieces, please click the following links: Payroll Stuffer Version
| Employee Memo Version;
4. Begin distributing the Premium Assistance Program model
notice, as may be applicable to your state, to employees in the first Plan
Year after model notices are issued (this could be as late as January 1,
2011 for calendar year Plans); and
5. If applicable in your state, once the model state disclosure form is
issued, begin using it to report to the state (that is, in the first Plan Year
after model state disclosure form is released).
Should you have any additional employee benefit questions or would like to discuss this material in detail, please don’t hesitate to call the Denman Team. |
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