• Agencies Issue Model Employer Chip Notice
  • March 19, 2010 | Author: Kari Knight Stevens
  • Law Firm: Blank Rome LLP - Philadelphia Office
  • Pursuant to the Children’s Health Insurance Program Reauthorization Act of 2009 (“CHIPRA”), the Departments of Labor and Health and Human Services have issued a model notice to be used to notify all employees of the potential opportunities available for group health plan premium assistance under state Medicaid and the Children’s Health Insurance Program (“CHIP”).

    CHIPRA requires that all employers provide notice to all employees who reside in a state with available premium assistance. Pennsylvania, New Jersey, New York and California are among the states currently providing premium assistance. There are approximately 40 states offering premium assistance.

    In order for an individual to be eligible for premium assistance, the employee must live in the state offering premium assistance, be eligible for the program and be eligible for “qualified employer-sponsored coverage.” Qualified employer-sponsored coverage is creditable coverage through a group health plan, including a fully-insured plan, where the employer contributes at least forty percent (40%) of the total cost or premium for coverage. To be eligible, coverage must be non-discriminatory and cannot be a health flexible spending account or high deductible health plan.

    The required notice must be provided to all employees, whether currently participating or not, as of the later of the first day of the plan year beginning after February 4, 2010, or May 1, 2010. The notice is subject to the same rules governing other notices required under ERISA. Failure to provide the required notice is subject to a $100/day penalty to be imposed by the Department of Labor.

    After the initial notice, notice should be provided as part of an employer’s annual open enrollment package.

    Comment: An employer should determine as soon as possible the applicable deadline for providing the notice and who should receive the notice. The residence of the employee, rather than work location, determines whether the required notice must be provided.