Monday, March 1, 2010

DOL releases notice for employer CHIPRA compliance

In response to the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA), the Department of Labor (DOL) announced the release of a model employer notice on February 4, 2010. Click to access the DOL Announcement and Employer CHIP Notice. The specific provisions of this act, applicable to both fully-insured and self-funded group health plans, are outlined below.

1. Allows states to subsidize premiums for employer-provided group coverage from the state’s Medicaid or CHIP funds. Individuals eligible for Medicaid and the Children's Health Insurance Program (CHIP) can receive a premium assistance subsidy to purchase qualified employer coverage instead of enrolling in Medicaid or CHIP.

For Medicaid, the amount of the subsidy is equal to the employee contribution for group coverage. For CHIP, it is equal to the difference between the employee contribution for employee-only coverage and the employee contribution for employee and child coverage, less any premium cost-sharing under the State child health plan. States that provide the subsidy can choose to pay it as a reimbursement to either the employee or the employer. Employers have the right to opt out of being directly paid the subsidy on behalf of an employee.

2. Gives employees new special enrollment rights. Effective April 1, 2009, employers must permit individuals to enroll in the group health plan if the employee requests coverage within 60 days of the following events:
• Employee or dependent loses eligibility for Medicaid or CHIP coverage
• Employee or dependent becomes eligible for State premium assistance (under Medicaid or CHIP)

3. Mandates that employers send CHIP notices to employees. Employers providing benefits for medical care in states offering premium assistance to purchase group coverage must provide an Employer CHIP Notice to employees to inform them of the available subsidy. An Employer CHIP Notice must inform each employee, regardless of enrollment status, of potential opportunities for premium assistance in the state in which the employee resides.

Currently 40 states meet this criteria, including North Carolina. For a complete listing of these states, access the DOL Announcement and the model Employer CHIP Notice. Disclosure requirements include:
• The initial notice must be distributed by the later of (1) the first day of the plan year after February 4, 2010, or (2) May 1, 2010.
• Employers with calendar year plans must provide the notice by January 1, 2011.
• Disclosures must continue to be provided annually.

4. Mandates that employers disclose plan details to states upon request. Group health plans are required to disclose benefit information to states through a model coverage coordination disclosure. The DOL will develop a model disclosure form by August 4, 2010. States may begin requesting this information from plans beginning with the first plan year after the model disclosure form is issued.

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