Children's Insurance Program Expands HIPAA Special Enrollment Events
The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), enacted in February, provides health coverage to children within families that do not qualify for Medicaid, yet who also cannot afford private health insurance. CHIPRA renews the State Children’s Health Insurance Program (SCHIP), now known as CHIP, collectively. CHIPRA expands health coverage for low-income children for four and a half more years by allocating $31.5 billion in additional funding. An additional 3.9 million uninsured children will receive coverage and states will also have the option to cover pregnant women.
Effective April 1, CHIPRA expands the special enrollment provisions of the Health Insurance Portability Accountability Act (HIPAA) to include two new qualifying enrollment events. Eligible employees and their dependents may enroll in group health insurance coverage if:
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the employee or dependent loses coverage under CHIP or Medicaid
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the employee or dependent becomes eligible for state premium assistance
Options
States will have the option to offer premium assistance to encourage enrollment of CHIPRA-eligible children in employer-sponsored health plans, thereby subsidizing group health plan coverage rather than CHIPRA enrollment. As such, CHIPRA pays the employee’s portion of the premium if parents (and children) elect to receive the premium assistance. Employers can opt out from receiving premium assistance and, if so, the state can reimburse the employee directly.
Notably, eligible employees or their dependents have 60 days to elect coverage following one of the two new qualifying events. This expanded eligibility differs from usual HIPAA special enrollment election periods of 30 days.
Despite new special enrollment provisions, model notices will not be issued by the Department of Labor and Health and Human Services until February 4, 2010. Following this issuance, employers that provide group health plans in states with CHIPRA or Medicaid plans must provide a state-specific notice of the premium assistance option to each employee.
Compliance with the new notices will begin with the first plan year after the model notices are issued (i.e., January 1, 2011 for calendar year plans), and may be included in an initial hire packet, in an addition to annual enrollment or within a summary plan description. If notices are not provided, civil penalties of $100 per day may be assessed.
Disclosures
Upon request, plan administrators will also be required to disclose information about group health plans to states. This disclosure needs to include plan administrator contact information, employee benefits eligibility as well as plan premiums. It begins with the first plan year following model forms (February 4, 2010) and civil penalties of $100 per day may be assessed for non-compliance with these requested disclosures.
Additional aspects of CHIPRA include dental coverage for those enrolled, as well as mental health and medical health parity in benefits.
HR personnel, Third Party Administrators (TPAs) and those responsible for administering group health plan enrollment should anticipate the new HIPAA special enrollment provisions that are effective as of the start of April. Plan information and communications, specifically summary plan descriptions (SPD) or summary of material modifications (SMM), must be updated. Health and Cafeteria Plan documents also need to be revised as a result of new special enrollment being offered to eligible employees and dependents.