The Department of Labor has published a new model notice to assist employers in meeting the notification requirement of the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA).  This DOL Model Employer CHIP Notice must be provided by all employers that have employees residing in North Carolina and certain other states (see list below) that offer a premium assistance subsidy for eligible low-income individuals to purchase qualified employer-sponsored coverage.
 
CHIPRA Background
As detailed in the Compliance Alert dated March 30, 2009, CHIPRA was signed into law on February 4, 2009, to expand the Children’s Health Insurance Program (CHIP) and create two new HIPAA group health plan special enrollment rights that employers must allow effective April 1, 2009. 

Specifically, CHIP was expanded so that states could elect to offer a premium assistance subsidy to eligible low-income children and their families for certain qualified employer-sponsored coverage.  The subsidy, which can take the form of either a reimbursement to the employee or a direct payment to the employer, allows individuals eligible for Medicaid and CHIP to purchase qualified employer-sponsored coverage.  The premium assistance is optional, and states cannot require families and children to receive coverage through an employer in lieu of Medicaid or CHIP.

Upon becoming eligible for premium assistance, employees can request to come onto the group health plan pursuant to a new HIPAA special enrollment right.  This request must be made to the group within 60 days of being determined to be eligible for premium assistance.

Employer Action Items
In order to maintain compliance with the CHIPRA notification requirements, employers should take the following steps:

1. Determine if you have employees residing in a state offering premium assistance.
   In states where premium assistance is available, employers are required to provide written notification to employees, regardless of whether they are enrolled on the plan or not.  This applies to employers with workers residing in North Carolina, as the Department of Health and Human Services has determined that NC offers one or more programs that provide premium assistance.  See below for a complete list of other states that offer premium assistance.
   
2. Calculate when the notice is due.
   For plan years beginning between February 4, 2010, and April 30, 2010, the notice is due May 1, 2010.  For employers whose next plan year begins on or after May 1, 2010, the notice is due the first day of the next plan year.  For example, if an employer’s next plan year begins July 1, 2010, the Employer CHIP Notice is due as of that date.  For calendar year plans, the notice is due January 1, 2011.
   
3. Determine how best to provide the notice to employees. Employers can choose whether to provide the notice to all employees or only to employees residing in states that provide premium assistance.  There are a variety of acceptable methods to furnish the Employer CHIP Notice to employees, such as first-class mail and electronic delivery (provided employees have work-related computer access).  The notice can also be furnished with the plan’s enrollment materials or SPD provided all employees who are entitled to receive the notice also receive these materials (recall the notice must be provided to employees regardless of whether they are enrolled on the plan).  If the notice is provided with other materials, it must appear separately (i.e. it cannot be included in the actual SPD document) so that the employee could reasonably be expected to understand the significance of the notice. 
   
4. Distribute the notice as required.
   Employers should provide the notice to employees by the applicable due date as determined under Step 2 above and annually on a go-forward basis.

Other States Offering Premium Assistance
Each state must determine whether the premium assistance will be offered.  DHHS has determined that as of January 22, 2010, the following states (in addition to NC) also offer programs that provide premium assistance:

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 Dakota, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wisconsin, and Wyoming.

Additional information about CHIPRA and the Employer CHIP Notice, including an updated list of states offering premium assistance, can be located on the DOL website.  If you have further questions about the Employer CHIP Notice or the employer action items associated with it, please contact our office at (919) 403-1986.