Although group health plan sponsors are busy focusing on the COBRA subsidy enacted this past February, there are a flurry of laws impacting group health plans that have compliance dates ranging from April 2009 to February 2010. One of the laws, “The Children’s Health Insurance Program Reauthorization Act of 2009”, also enacted in February 2009, imposes compliance obligations on group health plans that start as early as April 1, 2009. We will provide you with summaries of the other laws impacting group health plans in a series of Employee Benefits Law ALERTS.
The Children’s Health Insurance Program Reauthorization Act of 2009 extends and expands the state children’s health insurance program (CHIP). The following key provisions affect group health plans and note that some obligations must be complied with by April 1, 2009.
- Premium Assistance Subsidy for Employer Coverage. States may elect to offer a premium assistance subsidy to help CHIP and Medicaid eligible children obtain “qualified employer-sponsored coverage”. The subsidy may be provided as a reimbursement directly to the employee or as a direct payment to the employer. Employers can opt out of direct payments.
- Notice of Premium Assistance Subsidy. Employer group health plans in states that provide Medicaid or CHIP premium assistance subsidies must give notice to employees of the availability of the subsidy. The Department of Health and Human Services is required to develop model notices by February 4, 2010. The notices can be provided with open enrollment materials or with the SPD. The notice requirement is effective for plan years beginning after the date the model notices are issued.
- Disclosure to States. Plan administrators of group health plans are required to disclose information about the plan to states upon request. The Departments of Labor and Health and Human Services are required to develop a model disclosure form for plan administrators. States may not request the disclosure until the first plan year beginning after the date the model disclosure form is issued.
- New Special Enrollment Rights. In addition to existing special enrollment rights, group health plans must now also allow employees and dependents who are eligible but not enrolled for coverage to enroll under the following additional circumstances.
- The dependent or employee loses eligibility for CHIP or Medicaid. If the dependent or employee loses eligibility for CHIP or Medicaid, enrollment must be requested within 60 days after the termination of the CHIP or Medicaid coverage. Note that the 60 day period is in contrast to other special enrollment rights which can be limited to 30 days.
- The employee or dependent becomes eligible for a premium assistance subsidy through Medicaid or CHIP. If the employee or dependent becomes eligible for premium assistance through Medicaid or CHIP, enrollment must be requested within 60 days after eligibility is determined.
Plans must comply with the special enrollment right provisions as of April 1, 2009.
What Plans Need to Do. Plans, sponsors, and/or administrators will need to take the following actions:
- comply with the new special enrollment rules by April 1, 2009;
- update plan documents, SPDs, cafeteria plan change in election rules, health plan change in election rules, and special enrollment right notices, as soon as possible, to reflect the expanded special enrollment rights;
- determine whether the subsidy described above is available in states where employees reside;
- provide notice of the subsidy when the government issues the model notices; and
- disclose plan benefit information to states upon request after the government agencies issue model disclosure forms.