How Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) Group Health Plans
On February 4, the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) was signed into law. CHIPRA allows states to subsidize premiums for employer-provided group health coverage for eligible children, but it also imposes certain requirements on plan sponsors. CHIPRA applies to both fully insured and self-funded group health plans.
The Children’s Health Insurance Program (CHIP) is jointly financed by the federal and state governments and is administered by the states. Within broad federal guidelines, each state determines the design of its program, eligibility groups, benefit packages, payment levels for coverage, and administrative and operating procedures.
Beginning April 1, group health plans must permit employees and their dependents that are “eligible but not enrolled for coverage” to enroll in that group health plan coverage under two scenarios:
1. The employee’s or dependent’s Medicaid or CHIP coverage is terminated as a result of loss of eligibility.
2. The employee or dependent becomes eligible for group health plan premium assistance under a Medicaid or State children’s health insurance program.
These two new 60-day special enrollment rights are in addition to the existing 30-day group health plan special enrollment rights related to loss of eligibility of coverage or the addition of a new spouse or dependent.
Responsibility 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:
1. The employee’s or dependent’s Medicaid or CHIP coverage is terminated as a result of loss of eligibility; or
2. 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.
Most insurance companies are in the process of amending group health plan documents and notices, including the Notice of Special Enrollment Rights, group health plan enrollment forms, the Summary Plan Documents, and the Certificates of Creditable Coverage, if applicable, to accurately reflect the new HIPAA special enrollment rights mandated under CHIPRA.
4. Be prepared to provide disclosure to state agencies if requested.
The law requires plan administrators to disclose to states, upon request, information about when a plan participant or beneficiary is covered under the company’s group health plan and Medicaid or CHIP. HHS and the U.S. Department of Labor will be developing a model disclosure form for this purpose. States may not request this information until the first plan year that begins after the date on which the model form is first issued.