The U.S. Department of Labor (DOL) has issued a model notice to meet the requriement to inform employees of opportunities for group health plan premium assistance under Medicaid or the Children's Health Insurance Program (CHIP) in their state of residence.
The model Employer CHIP Notice was published in the Feb. 4, 2010, issue of the Federal Register. A text version (MS-Word) is available here. (A Spanish-language version is available here.)
The CHIP Reauthorization Act of 2009 (CHIPRA) requires employers offering group health plans to notify employees of their potential rights to receive premium assistance under a state's Medicaid or CHIP program. Employers may combine this notice with other information (e.g., open enrollment materials). The requirement applies to employers with employees that reside in any of 40 states that provide premium assistance.
As of Jan. 22, 2010, the following states offer one or more programs that meet this standard: 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.
Accordingly, if a group health plan provides benefits for medical care directly or through insurance to participants, beneficiaries or providers in one of these states, the plan is required to provide the Employer CHIP Notice, regardless of the employer’s location or principal place of business (or the location or principal place of business of the group health plan).
For example, if an employer in the District of Columbia sponsors a group health plan that provides reimbursement for medical care to plan participants or beneficiaries residing in the District of Columbia, Virginia, Maryland, West Virginia, Delaware and Pennsylvania, the plan is considered maintained in all six states. Because at least one of these states offers a premium assistance program, the employer is subject to the Employer CHIP Notice requirement.
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HR's Distribution Decision
"If you look at the model notice itself, it's rather generic," Karen Frost, health and productivity solutions leader at consultancy Hewitt Associates in Chicago, told SHRM Online. "The choice that HR professionals will have to make is how they want to distribute the notice every year—through a personalized notice, or simply as an addition to their annual benefits enrollment guide, which could be more cost-effective. Either way is acceptable."
As to whether to just target those who reside in the states that currently provide premium assistance programs or to distribute the notice broadly, "My expectation is that most employers will send it to all their employees," Frost says. "It would be hard to anticipate who might move from a state that doesn't currently provide premium assistance to one that does. Sending it to all employees, either as a separate notice or incorporated with annual enrollment materials, provides the safety net of catching everybody once a year." |
Employee Notification Deadlines
Employers are required to provide these notices by the latter of the first day of the first plan year after Feb. 4, 2010, or May 1, 2010. Accordingly, for plan years beginning from Feb. 4, 2010, through April 30, 2010, the Employer CHIP Notice must be provided by May 1, 2010. For employers whose next plan year begins on or after May 1, 2010, the Employer CHIP Notice must be provided by the first day of the next plan year (Jan. 1, 2011, for calendar-year plans).
The DOL plans to update the notice annually, with current information about which states are providing premium assistance programs.
Comments Sought
The DOL also is requesting comments regarding compliance with the Employer CHIP Notice requirement for use in the development of future compliance assistance materials and regulations. Comments are due by April 5, 2010.
Stephen Miller is an online editor/manager for SHRM.
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Express Request: SHRM members can receive additional updated online resources on this topic. Visit SHRM's Express Request web site and select the key term CHIPRA Prem. Assistance Model Notice (Benefits). |
Related Resource--External
DOL's Model Notice Regarding CHIPRA Premium Assistance Subsidies, Miller, Johnson, Snell & Cummiskey PLC, February 2010
Employers Sponsoring Health Insurance for Workers Must Provide CHIPRA Notice, Bond, Schoeneck & King, PLLC, February 2010
Providing the Department of Labor Model CHIP Notice, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC, February 2010)
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