Daily Rules, Proposed Rules, and Notices of the Federal Government
Comments will be posted without change to
This document addresses the Employer CHIP Notice requirement under CHIPRA and announces the availability of a model notice that can be used to satisfy the content requirements for the Employer CHIP Notice.
Section 701(f)(3)(B)(i)(II) of the Employee Retirement Income Security Act (ERISA), as added by CHIPRA, requires the Departments of Labor and Health and Human Services, in consultation with State Medicaid and CHIP Agencies, to develop model language for the Employer CHIP Notice required under section 701(f)(3)(B)(i) of ERISA, section 2701(f)(3)(B)(i) of the Public Health Service Act (PHS Act), and section 9801(f)(3)(B)(i) of the Internal Revenue Code (Code).
Section 311(b)(1)(D) of CHIPRA provides that the Departments of Labor and Health and Human Services shall develop initial model notices as provided under ERISA section 701(f)(3)(B)(i)(II) and the Department of Labor shall provide such notices to employers by February 4, 2010, which is one year after the enactment of CHIPRA.
Section 104 of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires the Departments of Labor, the Treasury, and Health and Human Services (the Departments) to ensure that guidance under the health coverage provisions of Part 7 of the ERISA, Title XXVII of the PHS Act, and Chapter 100 of the Internal Revenue Code,
In accordance with these requirements, this document has been developed in coordination with the Departments of Health and Human Services and the Treasury, and in consultation with State Medicaid and CHIP Agencies.
Under ERISA section 701(f)(3)(B)(i)(I), PHS Act section 2701(f)(3)(B)(i)(I), and section 9801(f)(3)(B)(i)(I) of the Code, as added by CHIPRA, an employer that maintains a group health plan in a State that provides medical assistance under a State Medicaid plan under title XIX of the Social Security Act (SSA), or child health assistance under a State child health plan under title XXI of the SSA, in the form of premium assistance for the purchase of coverage under a group health plan, is required to make certain disclosures. Specifically, the employer is required to notify each employee of potential opportunities currently available in the State in which the employee resides for premium assistance under Medicaid and CHIP for health coverage of the employee or the employee's dependents. These notices are referred to in this document as “Employer CHIP Notices”.
ERISA section 701(f)(3)(B)(i)(II) requires the Department to provide employers with model language for the Employer CHIP Notices to enable them to timely comply with this requirement. The model is required to include 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.
Section 311(b)(1)(D) of CHIPRA provides that the Departments of Labor and Health and Human Services shall develop the initial model notices under ERISA section 701(f)(3)(B)(i)(II), and the Department of Labor shall provide such notices to employers, by February 4, 2010. Moreover, each employer is required to provide the initial annual notices to such employer's employees beginning with the first plan year that begins after the date on which the initial model notices are first issued.
ERISA section 701(f)(3)(B)(i)(III), PHS Act section 2701(f)(3)(B)(i)(II), and Code section 9801(f)(3)(B)(i)(II) provide that an employer may provide the Employer CHIP Notice concurrent with the furnishing of materials notifying the employee of health plan eligibility, concurrent with materials provided to the employee in connection with open season (or other coverage election process under the plan), or concurrent with the furnishing of the Summary Plan Description (SPD) provided under ERISA section 104(b).
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 is considered to maintain a group health plan in that State. If that State provides medical assistance under a State Medicaid plan, or child health assistance under a State child health plan, in the form of premium assistance for the purchase of group health plan coverage, the employer is required to provide the Employer CHIP Notice. The Department of Health and Human Services, in consultation with State Medicaid and CHIP offices, has informed the Department that, as of January 22, 2010, the following States offer one or more programs that meet this standard:
Accordingly, if a group health plan provides benefits for medical care directly (such as through a health maintenance organization); or through insurance, reimbursement or otherwise to participants, beneficiaries, or providers in one of these States, the plan is required to provide the Employer CHIP Notice, regardless of the employer's location or principal place of business (or the location or principal place of business of the group health plan, its administrator, its insurer, or any other service provider affiliated with the employer or the plan). This principle is illustrated by the following example:
An Employer CHIP Notice must inform each employee, regardless of enrollment status, of potential opportunities for premium assistance in the State in which the employee resides. The State is which the employee resides may or may not be the same as the State in which the employer, the employer's principal place of business, the health plan, its insurer, or other service providers are located. This principle is illustrated by the following example:
The Model Employer CHIP Notice was designed as a template to cover an array of situations where employees may be entitled to notice and may reside (or their families may reside) in States across the nation. Employers may use the model template as a national notice to fulfill their employer notice disclosure obligation under ERISA section 701(f)(3)(B)(i), and the parallel provisions of section 2701(f)(3)(B)(i) of the PHS Act and section 9801(f)(3)(B)(i) of the Code. The notice is required to be provided automatically, free of charge.
In consultation with State Medicaid and CHIP offices, some States suggested significant modifications to the template and more detailed descriptions of their own State programs. Of course, the Model Employer CHIP Notice is just a model and States may wish to include additional information on their Web sites and in their own compliance assistance materials that would encourage further disclosure of any individual State premium assistance program. Nonetheless, because employees (and their families) may reside in different States than their employer, its principal place of business, their health plan, its insurer, or its other service providers that may distribute the notice on behalf of the employer, the approach of the Model Employer CHIP Notice is to provide a very brief description of premium assistance and rely on State contact information for State-specific program descriptions. An employer which is not facing multi-State complexities and who wants to provide more comprehensive State-specific information to its workforce may modify the Model Employer CHIP Notice to its employees. However, employers should be mindful of the requirement to include at least the minimum relevant State contact information for any employee residing in a State with premium assistance.
The employer CHIP disclosure requirement in ERISA, the PHS Act, and the Code requires that the notice inform employees of potential opportunities for premium assistance “currently available.” CHIPRA section 311(b)(1)(D) requires the Department of Labor to provide “initial” model notices within one year of CHIPRA's enactment. Employers are required to provide “initial annual notices beginning with the first plan year after the date on which such initial model notices are first issued.” The Department, working with the Departments of Health and Human Services and the Treasury, and the States, intends to update its Web site annually to reflect any changes in the number of States offering premium assistance programs (or the contact information for those States), to help enable employers to meet their CHIP disclosure requirements.
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 (January 1, 2011 for calendar year plans).
The Employer CHIP notice is not required to be provided in a separate mailing. Plans may combine information to reduce administrative costs, if the other requirements of this Notice are met. Thus, the Employer CHIP Notice may be furnished concurrent with enrollment packets, open season materials, or the plan SPD, provided that (1) such materials are provided no later than the date determined above, (2) such materials are provided to all employees entitled to receive the Employer CHIP Notice, and (3) the Employer CHIP Notice appears separately and in a manner which ensures that an employee who may be eligible for premium assistance could reasonably be expected to appreciate its significance.
Accordingly, an employer may provide the Employer CHIP notice concurrent with other materials (including, for example, enrollment packets, open season materials, or the plan SPD) that may be provided in advance of the upcoming plan year. This principle is illustrated by the following example:
The notice must be provided in writing in a manner calculated to be understood by the average employee. It may be provided by first-class mail. Alternatively, it may be provided electronically to the extent the criteria of the Department's electronic disclosure safe harbor at 29 CFR 2520.104b-1(c) are satisfied.
CHIPRA requires the notice to be provided annually. The Department expects to update its Web site with the list of States that offer premium assistance programs and provide other additional information annually to help enable employers to meet their Employer CHIP notice obligations. Comments regarding the Employer CHIP notice requirement are invited.
The model Employer CHIP Notice is available in modifiable, electronic form on the Department's Web site:
In addition to the Employer CHIP Notice requirement, CHIPRA also provides that, in order for States to evaluate an employment-based plan to determine whether premium assistance is a cost effective way to provide medical or child health assistance to an individual, group health plans are required to provide, upon request, information about their benefits to State Medicaid or CHIP programs. The Departments, in conjunction with an advisory committee, are separately developing a model coverage coordination disclosure form that will be issued in the future. States may begin requesting this information from plans beginning with the first plan year after this model form is issued.
Group health plans and group health insurance issuers must also offer new special enrollment opportunities after
Individuals should contact their State's Medicaid or CHIP program to determine if they are eligible for Medicaid or CHIP, and to see if their State will subsidize group health plan premiums. Information is also available by calling 1-877-KIDS NOW or on the Internet at
Individuals needing assistance or with questions about the application of these provisions to their employment-based group health plan can call toll free 1.866.444.3272 (EBSA) to speak to a Benefits Advisor. Information is also available on EBSA's Web site at
According to the Paperwork Reduction Act of 1995 (Pub. L. 104-13) (PRA), no persons are required to respond to a collection of information unless such collection displays a valid OMB control number. The Department notes that a Federal agency cannot conduct or sponsor a collection of information unless it is approved by OMB under the PRA, and displays a currently valid OMB control number, and the public is not required to respond to a collection of information unless it displays a currently valid OMB control number.
OMB has approved the model Employer CHIPRA notice information collection request pursuant to the emergency review procedures under 5 CFR 1320.13. The public reporting burden for this collection of information is estimated to average approximately 30 seconds per respondent. Interested parties are encouraged to send comments regarding the burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the U.S. Department of Labor, Office of the Chief Information Officer,
29 U.S.C. 1027, 1059, 1135, 1161-1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c; sec. 101(g), Public Law 104-191, 110 Stat. 1936; sec. 401(b), Public Law 105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 101(f), Public Law 110-233, 122 Stat. 881; sec. 512(d), Public Law 110-343, 122 Stat. 3765; Public Law 110-460, 122 Stat. 5123; Public Law 111-3, 123 Stat. 8; Secretary of Labor's Order 6-2009, 74 FR 21524 (May 7, 2009).