Today’s update is about the Children’s Health Insurance Program Reauthorization Act, or CHIPRA. Under CHIPRA, states may provide premium assistance subsidies toward qualified employer-sponsored health insurance coverage, rather than enrolling the individual in CHIP (Children’s Health Insurance Program), Medicaid or MaineCare. This premium assistance may be provided when it is cost-effective for the states to do so, as long as the plan qualifies as creditable coverage under HIPAA, the plan satisfies certain nondiscrimination rules, and the employer contributes at least 40% of the premium.
CHIPRA also created some new special enrollment rights for certain qualified individuals, which became effective on April 1, 2009. Under the terms of these “special enrollment” rights, the health plan must permit an eligible employee to enroll in the plan within 60 days in either of these circumstances:
1. If the employee’s Medicaid or CHIP coverage terminates due to loss of eligibility for the program (not including failure to pay premium); and
2. If there is a determination by the state in which the employee resides that the employee is eligible for the state Medicaid or CHIP premium assistance. The premium assistance may be paid by the state in one of two ways: either directly to the employer, or (if the employer chooses to opt out of receiving the premium subsidy directly from the state) to the employee. In the latter case, the employer may continue to withhold the employee’s share of premium from his/her pay, and the state will reimburse the employee.
Under the law, employers must distribute this Notice to all benefits-eligible employees, regardless of whether or not the employee is enrolled in the employer-sponsored plan. Notices must be provided to all benefits-eligible employees on an annual basis. These notices may be distributed at any time during the plan year; employers may choose to provide the notice with annual open enrollment materials.
The initial and annual notices required under CHIPRA may be delivered to employees by hand, electronically, or via first class mail. You can find this notice here.
Please note that EBS is sharing this information to assist you with your compliance planning. We recommend that you contact your legal counsel with specific questions relating to this law.
Ellen E. McPherson
Employee Benefits Solution