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Benefits Law
Alert March 24, 2009
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Labor and
Employment Practice Group Leaders
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Contributors
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The Children's
Health Insurance Program Reauthorization Act of 2009
("CHIPRA") became law on February 4, 2009. The
purpose of CHIPRA is to provide health insurance to children living
in families that are not poor enough to qualify for Medicaid, but
are unable to afford private health care insurance.
Several provisions of CHIPRA affect employers, group health plans and
group health insurance carriers.
New HIPAA Special
Enrollment Periods
CHIPRA
provides two additional special enrollment periods for group health
plans permitting employees and their eligible dependents who are
eligible for, but not enrolled in, the group health plan to enroll if
the employee or dependent:
· loses
coverage under Medicaid or a state child health insurance plan, and
the individual requests coverage under the group health plan within
60 days of the loss of coverage, or
· becomes
eligible for a premium assistance subsidy under the group health plan
through Medicaid or a state child health insurance plan, and requests
coverage under the group health plan within 60 days of becoming
eligible for assistance.
These
provisions are effective April 1, 2009.
General Notice
Requirement
CHIPRA
provides that employers who maintain a group health plan must provide
a general notice to employees describing the potential opportunities
for premium assistance under the employee's or dependent's state
Medicaid or state child health insurance program.
No later than
April 1, 2010, the Department of Labor ("DOL") and Health
and Human Services ("HHS") must jointly develop a national
and state specific model notice for employers to provide
employees. Employers may provide this general notice as part of
the employer's open enrollment materials, as part of a summary plan
description, or in materials notifying an employee of his or her
health plan eligibility.
Note that this
notice requirement is not effective until the plan year beginning
after the date on which model notices are first issued by the DOL
and/or HHS.
State
Disclosure Requirement
Upon request,
group health plan administrators will be required to disclose, to the
appropriate state agency, information about benefits available under
the group health plan, including information that allows states to
determine an employee's eligibility, plan benefits, plan
administrator contact information, and other relevant
information. The purpose of this disclosure requirement is to
allow states to determine whether it is cost-effective to provide
premium assistance or to cover the child directly through the state
child health insurance program.
CHIPRA
requires the DOL and HHS to create a working group to develop model
disclosure forms within one year of the date of CHIPRA enactment.
An employer's
failure to comply with the employee notice requirement or the state
disclosure requirement will result in a penalty of $100 per day for
each individual to whom the failure relates.
What should
Employers Do?
Employers who
sponsor group health plans should focus on (1) amending
their group health plan and cafeteria plan documents to reflect the
new CHIPRA special enrollment requirements and (2) notifying
employees of their new special enrollment rights as soon as possible.
Once model
notices and forms are issued by the DOL and/or HHS, employers will
need to comply with the new notice and disclosure requirements under
CHIPRA.
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For further
information about the content of this Benefits Law Update, please
contact Edward
C. Hammond, Editor, at 248-988-1821. To find out
more about Clark Hill and our Employee Benefits team, visit clarkhill.com
or call 800.949.3124
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