CHIPRA – Model CHIP Notice Issued by EBSA

By Veronica S. Minin

The Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) requires that employers maintaining group health plans inform employees of the premium assistance for the purchase of health care coverage offered by Medicaid or the Children’s Health Insurance Program (CHIP) of their state of residence. Employers must meet this requirement by providing a “CHIP Notice” to each employee.

The Employee Benefits Security Administration (EBSA) has issued a model CHIP Notice and requests comments on compliance requirements. The model CHIP Notice may be found here.

The purpose of the CHIP Notice is to increase employees’ awareness of the relationship between Medicaid, CHIP and their employer’s group health plan.

Who must provide the notice and when?

Employers maintaining a group health plan must provide the CHIP Notice to the plan’s participants and/or beneficiaries who reside in one of the states offering the assistance via Medicaid or CHIP.

EBSA has developed a list of states that offer the premium assistance via those two programs. As of January 2010, the list includes: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin and Wyoming. Even if the employer’s location or principal place of business is not in one of these states, the employer may still be obligated to comply.

The initial notice must be provided by the later of the following: (1) the first day of the first plan year beginning after February 4, 2010, or (2) May 1, 2010. Thus, for calendar year plans the effective date is January 1, 2011. If the plan year begins after February 4, 2010 and before April 30, 2010, the employer must provide the notice by May 1, 2010. If the next plan year begins on or after May 1, 2010, the notice must be provided by the first day of the next plan year.

After the initial notice is provided, employers must provide a new notice every year. Both the initial and the annual CHIP notice may be provided concurrently with materials notifying employees of health plan eligibility, materials provided in connection with an open season or other election process conducted under the plan, or included in the summary plan description.

EBSA expects to update its website with the list of states that offer premium assistance programs and provide other additional information annually to help enable employers meet their notice obligations.

Who must receive the notice?

Each employee who is a resident of one of the states on the list, regardless of enrollment status or potential opportunities for premium assistance in that state, must receive the CHIP Notice. The employee’s state of residence may or may not be the same as the state in which the employer or the employer's principal place of business are located (or the location or principal place of business of the group health plan, its administrator, its insurer, or any other service provider affiliated with the employer or the plan).

Content

The approach of the model CHIP Notice is to provide a very brief description of premium assistance and the state contact information for state-specific program descriptions. States are not precluded from including additional information on their websites and in their own compliance assistance materials that would encourage further disclosure of any individual state premium assistance program. Employers may modify the CHIP Notice to provide state-specific information to their employees, but need to be mindful of the requirement to include at least the minimum relevant state contact information for any employee residing in a state with premium assistance.

EBSA is requesting comments regarding compliance with the CHIP Notice requirement for use in the development of future compliance assistance materials and/or regulations. Written comments must be submitted on or before April 5, 2010, to Office of Health Plan Standards and Compliance Assistance of the Employee Benefits Security Administration.