Right on the heels of the COBRA subsidy and subsidy extension notices required as a result of the COBRA subsidy and its extension, here is yet another notice that employers with group health plans must send to their employees annually. On February 4, 2010, the Department of Labor issued a model notice for employers to use in drafting their annual Children’s Health Insurance Program Reauthorization Act (“CHIPRA”) notice. The model notice can be found at http://www.dol.gov/ebsa/chipmodelnotice.doc.
What is CHIPRA?
CHIPRA became effective April 1, 2009, creating two new special enrollment rights for employees and dependents under employer-sponsored group health plans. These CHIRPA enrollment opportunities are required to be offered when an employee or eligible dependent is covered under a Medicaid plan or state children’s health insurance program (“CHIP”), and loses eligibility under that plan; or when they become eligible under a CHIP or Medicaid plan for premium assistance that could be used toward the cost of an employer plan. Note that these new rights have a 60 day deadline instead of the standard 31 day deadline for other special enrollment rights.
Who must comply with CHIPRA’s notice requirements and by when?
Employers who maintain group health plans are required to notify all employees of their potential CHIPRA special rights to receive premium assistance under a state’s Medicaid or CHIP program in the 40 states that currently provide premium assistance. The 10 states that currently do not provide premium assistance are:
- Connecticut
- Delaware
- Hawaii
- Illinois
- Maryland
- Michigan
- Mississippi
- Ohio
- South Dakota
- Tennessee
If you are an employer and have employees in any other state, you must comply with the CHIPRA notice requirement.
The initial CHIPRA notice must be sent to all employees starting with the first plan year after February 4, 2010. For plan years that begin February 4, 2010 through April 30, 2010, the initial notice must be sent by May 1, 2010. For plan years starting after May 1, 2010, the notice deadline is the first day of the next plan year. Therefore, for calendar year plans, the first notice must be sent by January 1, 2011. Even though the CHIPRA notice is not required to be sent until the dates just mentioned, the two new special enrollment rights that CHIPRA created were effective April 1, 2009.
Who must receive the CHIPRA notice?
All employees (not just group health plan participants) of an employer who maintains a group health plan in any of the 40 states which provide premium assistance must receive the CHIPRA notice. Employers do not have to supply the notice to employees who reside in the 10 states listed above who do not offer premium assistance, but they may do so for administrative efficiency. For example, if an employer has employees in New Jersey, New York and Connecticut, it must send the notice to all employees domiciled in New Jersey and New York, but it may send the notice to its employees in Connecticut. On the other hand, if an employer only has employees domiciled in Connecticut, it is not required to send the CHIPRA notice each year.
How can the CHIPRA notice be sent?
The CHIPRA notice may be sent by itself, or together with other information, such as open enrollment materials (after the initial notice is sent, of course). However, it can not merely be incorporated into those materials, or included in the group health plan’s summary plan description. The regulations provide that the CHIPRA notice must be a separate, prominent document, written in a manner which ensures that an employee who may be eligible for premium assistance could reasonably be expected to appreciate its significance. The notice may be sent via first class mail or in accordance with the DOL’s electronic disclosure safe harbor contained in DOL Regulation Section 2520.104b-1(c).
How often must the CHIPRA notice given to participants?
The CHIPRA notice must be sent to all employees annually after the initial notice is sent by the deadlines discussed above.
Must an employer use the model CHIPRA notice?
No. The model notice is designed as a template to cover an array of situations where employees may be entitled to the notice and may reside in states who offer premium assistance. An employer may modify the notice as appropriate, provided, however, that the notice informs the employee of opportunities that “currently exist” in the state for premium assistance under Medicaid and CHIP for coverage of the employee or dependents and the necessary information to assist an employee in contacting the state and seeking assistance.
