Guide for Employers to Implement CHIPRA
Department of Labor Model Notices
The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA), enacted February 4 , 2009, expanded off-cycle HIPAA Special Enrollment Rights to employees by including two new qualifying enrollment events:
- Eligible employees' dependents may enroll in group health insurance coverage if either the employee or dependent loses coverage under the State Children's Heath Insurance Program or Medicaid
- Eligible employees' dependents may enroll in group health insurance coverage if the employee or dependent becomes eligible for state premium assistance
CHIPRA Requires Employers to Provide Notice to employees regardless of whether the employee is enrolled in the group health plan by notifying employees of potential premium assistance subsidies currently available in the state, as well as how to contact the state for additional information.
Notice requirements only apply to the state of residence of the employee and do not pertain to the location or principal place of business of the employer, plan administrator, or insurer.
A full list of states offering premium assistance is provided in the notice from the Department of Labor. Currently, only 10 states do not offer premium assistance.
Notices do not need to be sent to employees residing in: Connecticut, Delaware, Hawaii, Illinois, Maryland, Michigan, Mississippi, Ohio, South Dakota, and Tennessee.
Model Notices have been released by the DOL for Employers' use. Please follow this link for the notice: http://www.dol.gov/ebsa/compliance_assistance.html#section2
Who Receives the Notice?
Each employee residing in a state offering premium assistance programs must receive notice of potential opportunities, regardless if the employee is enrolled in any of the employer-sponsored group health plans. If an employee resides in a state that does not offer premium assistance programs, notice is not required for that employee.
When Must the Notice be Distributed?
- March 1, April 1, and May 1, 2010 plan years - Notice must be provided by May 1, 2010
- June 1 through December 1, 2010 plan years - Notice must be provided by the first day of the new plan year
- January 1st, 2011 for calendar year plans
- Thereafter the notice must be provided annually, by the day before the new plan year
How Should Notices be Distributed?
The notice may be provided in its own separate first-class mailing; or it may be included in an open enrollment package. The notices must be a "separate and prominent" document so its significance is understandable to the recipient. Inclusion within a larger enrollment guideline will not qualify.
If notices are not provided, civil penalties of $100 per day may be assessed.
Background Information:
States 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. CHIPRA pays the employee's portion of the premium if parents (and children) elect to receive premium assistance. Employers also have the option to opt out of receiving the premium assistance, and if so, the state pays the employee directly as a reimbursement.
Notably, eligible employees have 60 days to elect coverage following one of the two new qualifying events, which differs from usual HIPAA special enrollment election periods of 30 days.
Plan information and communications, specifically summary plan descriptions (SPD) or summary of material modifications (SMM), need to be updated to reflect CHIPRA.
If you have questions, please contact Andrea Esselstein: 216.658.5012 aesselstein@oswaldcompanies.com