BeneBits™ CHIPRA Notices Update
Notification Requirements Under CHIPRA ……
Summary of Responsibilities of the Plan Sponsor
1. Notify employees of the new special enrollment opportunity.
Employers who sponsor fully insured or self-funded group health plans must notify their employees about the new enrollment
rights as soon as possible, but 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.
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.
CHIPRA Overview
On February 4, 2009, President Obama signed into law the Children’s Health Insurance Program Reauthorization Act of
2009 (CHIPRA). This law extends and expands the state children’s health insurance program (CHIP).
New Disclosure Requirement
The law amends the Internal Revenue Code, ERISA and the PHSA to require group health plan administrators to disclose
information about plan benefits to states upon request when a plan participant or beneficiary is covered under Medicaid
or CHIP. This information is intended to allow states to determine eligibility, the cost-effectiveness of providing premium
assistance for the purchase of coverage under the group health plan, and to provide supplemental benefits. The Department of
Health and Human Services (HHS) and the Department of Labor (DOL) are to establish a working group and develop a model
coverage coordination disclosure form for plan administrators to complete. States may not request the model coverage
coordination disclosure form until the first plan year that begins after the date on which the form is first issued.
New Special Enrollment Requirements
The law also creates additional special enrollment rights. Group health plans will now be required to permit employees
and dependents who are eligible but not enrolled for coverage
- To enroll upon termination of the employee or dependent’s Medicaid or CHIP coverage or;
- If the employee or dependent become eligible for a premium assistance subsidy under Medicaid or CHIP.
In both instances, the employee must request coverage under the plan within 60 days after the termination or determination
of subsidy eligibility. These new special enrollment rights are effective April 1, 2009.
New Employer Notification Requirement
There are additional new notification requirements for employers that maintain group health plans in states that provide
Medicaid or CHIP assistance in the form of premium assistance subsidies. These employers will be required to provide
written notices to their employees, informing them of the potential opportunities for premium assistance in the states in
which they reside to help pay for health coverage for employees or dependents. The new law directs HHS to develop national
and state-specific model notices by February 4, 2010 to enable employers to comply with the notice requirement. Employers
may provide these notices along with other plan materials (for example, eligibility notice, open enrollment materials, or
when furnishing the SPD). The notice requirement is effective for plan years beginning after the date on which the model
notices are first issued.
Premium Assistance
Under CHIPRA, the premium assistance available for employer-sponsored insurance can be paid directly to the employer,
or the employer can opt-out of receiving payments directly resulting in the state providing premium assistance directly
to employees. The amount of premium assistance available is the incremental premium cost difference between coverage for
the employee only and coverage for the employee plus the eligible child/children.
Penalties for Non-Compliance
The law provides for civil penalties of up to $100 per day for failure to comply with the new notice
and disclosure requirements.
