The U.S. Department of Labor has issued a model information notice that all employers with group health plans must issue to employees by as early as May 1, 2010. The notice informs employees of potential state financial assistance for paying employer health insurance premiums.
Some employees may be eligible for health coverage from their employer, but are unable to afford the premiums. For such employees, many states have premium assistance programs that can help pay for coverage. These states use funds from their Children’s Health Insurance Program (known as “CHIP”) or Medicaid to help people who are eligible for employer-sponsored health coverage, but need assistance in paying their health insurance premiums. From a state’s standpoint, providing such assistance to pay premiums for employer coverage may be considerably less expensive than enrolling the individual and his or her family in a state health insurance program.
Employers are now required to notify each employee of these opportunities under state Medicaid and CHIP for financial assistance in paying for employer-provided health insurance. The Department of Labor has issued a model notice by which employers may satisfy this requirement. The model Employer CHIP Notice includes information on how an employee may contact the state in which the employee resides for additional information regarding potential opportunities for premium assistance, including how to apply for such assistance. The model Employer CHIP Notice is available on the Department of Labor’s website: http://www.dol.gov/ebsa/.
For purposes of the Employer CHIP Notice requirement, an employer providing benefits (directly or through insurance, reimbursement, or otherwise) for medical care in a state that provides premium assistance is required to provide the Employer CHIP Notice, regardless of the employer’s location (or the location of the group health plan, its administrator, its insurer, or any other service provider affiliated with the employer or the plan). Because more than 40 states do offer such programs, most employers will find it easiest simply to send the model CHIP Notice to all employees, rather than trying to send separate notices to employees based on the particular state in which the employees (or their doctors) reside.
Employers are required to provide these notices by the date that is the later of (1) the first day of the first plan year after February 4, 2010; or (2) May 1, 2010. Accordingly, for plan years beginning between from February 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. For example, for calendar year plans, the notice must be provided by January 1, 2011. The notice must be provided annually thereafter.
An employer may provide the Employer CHIP Notice with the materials notifying an employee of health plan eligibility, with materials provided to employees in connection with open enrollment season (or other coverage election process under the plan), or with the furnishing of the summary plan description. However, an Employer CHIP Notice must be provided to each employee, and not just employees enrolled in a health plan of the employer. So employers are responsible for ensuring that the notice is actually distributed to each employee each year, although employers may work with their health plan insurers or administrators to coordinate distribution of the notice in new hire or open enrollment materials.
In addition, group health plans must also offer new special enrollment opportunities. Plans are required to permit employees and dependents who are eligible for, but not enrolled in, a group health plan to enroll in the plan upon: (1) losing eligibility for coverage under a state Medicaid or CHIP program, or (2) becoming eligible for state premium assistance under Medicaid or CHIP. The employee or dependent must request coverage within 60 days of being terminated from Medicaid or CHIP coverage or within 60 days of being determined to be eligible for premium assistance.