New York Labor and Employment Law Report

USDOL Publishes Model CHIPRA Notice for Use By Employers

USDOL Publishes Model CHIPRA Notice for Use By Employers

February 16, 2010

A model notice that informs employees of the availability of premium assistance for employer-provided group health plan coverage was published in the Federal Register on February 4, 2010, one year after President Obama signed the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA). Employers who offer group health plan coverage must provide this notice to employees before the beginning of the next plan year, and annually thereafter. CHIPRA’s impact on employer health plans and the notice requirements are described below.

CHIPRA’s Impact on Employer Health Plans

CHIPRA affects employer group health plans in two ways:

  • It requires most group health plans to have a special enrollment period when there is a termination of Medicaid or CHIP coverage, or when a child becomes eligible for assistance in the purchase of employment-based coverage. The employee must request coverage within 60 days of the event.
  • It allows a State to offer a premium assistance subsidy for qualified employer-sponsored coverage to all targeted low-income children who are eligible for child health assistance under the plan and have access to such coverage. New York and 39 other states have chosen to offer such assistance. Election of the subsidy is voluntary on the part of the child (or the child’s parent). The subsidy amount is the difference between the employee contribution required for enrollment only of the employee, and the amount required for enrollment of the employee and the child in such coverage, less any applicable premium cost-sharing applied under the State child health plan. The premium assistance may be paid either as reimbursement to an employee for out-of-pocket expenditures or directly to the employee’s employer. The employer may opt out of the direct payment with notice to the State.

Notice Requirements

The model notice issued by the Department of Labor is available in modifiable, electronic form on its website, www.dol.gov/ebsa.

Employers must provide the notice, free of charge, to each employee, regardless of enrollment status. The initial copy of the notice must be provided in connection with the annual enrollment period for the first plan year that begins after the date of publication, or May 1, 2010 (if later). For employers that operate health plans on a calendar year basis, the first notice is due in advance of the plan year that begins January 1, 2011. It is also a good idea to include the notice in enrollment materials for new hires. Each year, another copy of the notice must be provided to all employees.

Although the notice must be a separate, prominent document, it may be delivered with the annual enrollment packets or the summary plan description, as long as the delivery of those documents meets the timing requirements described above. No separate mailing is required. Electronic delivery in accordance with the Department of Labor’s electronic disclosure safe harbor is permitted.