EBSA Releases Model Employer CHIP Notice

On Feb. 4, 2009, President Obama signed into law the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA). The law provided for two new special enrollment rights under the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Effective Apr. 1, 2009, if the employee or dependents experience one of the following events, they have 60 days from the event to notify the group health plan administrator and enroll in the group coverage mid-year:

• The employee or dependents lose eligibility under Medicaid or a state children's health insurance program (CHIP)
• The employee or dependents become eligible for a state premium assistance subsidy from Medicaid or state CHIP that would assist them in paying the group health plan premiums

Employers must provide notice of the premium assistance subsidy to employees who reside in a state that has such a program. On Feb. 4, 2010, the Employee Benefits Security Administration (EBSA) released a model notice for this purpose. The states that currently provide a state premium assistance subsidy program through Medicaid or CHIP are: AL, AK, AZ, AR, CA, CO, FL, GA, ID, IN, IA, KS, KY, LA, ME, MA, MN, MO, MT, NE, NV, NH, NJ, NM, NY, NC, ND, OK, OR, PA, RI, SC, TX, UT, VT, VA, WA, WV, WI, and WY.

If the group health plan offers medical coverage to an eligible participant or beneficiary residing in one of these states, the employer must provide the Employer CHIP Notice to those individuals. It is based on where the eligible participants live, not where the employer is located or where an insurance policy is issued. The notice requirement applies to both fully insured and self funded plans.

At minimum, the notice must include the contact information of the state agency that is responsible for the state premium assistance subsidy. States are permitted to include additional information on their websites that encourages a more state specific notice. Check with the appropriate state agency listed on the model notice or watch for updates in Compliance Corner for states that provide a customized model notice for residents. The employer may choose to include specific information on the state program in the notice, but they are not required to do so. To comply with the requirement, the notice need only include state agency contact information for the individual to obtain additional information on the program.

For plan years beginning on or after Feb. 4, 2010 through Apr. 30, 2010, the notice must be distributed to eligible participants by May 1, 2010. For plan years beginning on or after May 1, 2010, the notice must be distributed by the first day of the next plan year. This means that calendar year plans would not have to distribute the notice until Jan. 1, 2011. Employers may send the CHIP Notice in a separate mailing, but are not required to do so. The notice may be provided concurrent with enrollment packets, open enrollment materials, or in the plan's Summary Plan Description (SPD) as long as the employee receives the notice by the applicable due date. The notice may be distributed electronically according to the Department of Labor’s electronic disclosure requirements. The notice will be required on an annual basis going forward.

Click here to view the Model Notice.

Click here to view the EBSA guidance on notice requirements.

Click here to view the guidelines on electronic disclosure.

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