Last week the Department of Labor ("DOL") released a model notice ("Notice") employers may use to notify employees of the availability of Medicaid and state children's health insurance program ("CHIP") premium assistance programs in the state in which the employee resides. The Children's Health Insurance Reauthorization Act of 2009 ("CHIPRA") added new notice requirements for employers that maintain group health plans in states that provide Medicaid and/or CHIP premium assistance programs (40 states maintain at least one of these two programs as of January 22, 2010). CHIPRA requires that employers provide the Notice to all employees on an annual basis, regardless of their enrollment status in the employer-sponsored group health plan.
Upon review, the text of the Notice explains that some states have premium assistance programs to assist employees with paying their health premiums. The Notice also provides a telephone number employees may use for further information on eligibility for such programs. Additionally, the Notice describes the special enrollment rights provided under CHIPRA and also includes the names of the Medicaid and CHIP programs available, listed by state. The DOL has also stated that employers that wish to include additional information on their state's programs may do so, but employers should be mindful that their employees may reside in, and qualify for, programs offered in other states as well.
Employers must provide the Notice automatically and free of charge to all employees, regardless of their enrollment status in the group health plan. Employers need not provide the Notice in a separate mailing and the Notice may be furnished with enrollment packets, open enrollment materials, or the plan SPD. If an employer decides to provide the Notice with such materials, the following requirements apply: (1) the Notice and materials must be provided no later than the first date applicable for the plan (as discussed below), (2) the Notice and materials must be provided to all employees entitled to receive the Notice and (3) the Notice must appear 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. The Notice may be provided by first-class mail, or it may be provided electronically to the extent the requirements of the DOL's electronic disclosure safe harbor rule are satisfied.
Employers are required to provide the Notice 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 February 4, 2010 through April 30, 2010, the Notice must be provided by May 1, 2010. For employers whose next plan year begins after May 1, 2010, the Notice must be provided by the first day of the next plan year (January 1, 2011 for calendar year plans).
Employers should review the Notice and determine when the Notice should first be provided to employees. Additionally, employers must decide whether they wish to customize the Notice to fit their organization's specific needs or whether they wish to send the Notice without modification. A copy of the recently released Notice may be found here. For future reference, the DOL intends to update its website annually to reflect any changes in the number of states offering premium assistance programs (or the contact information for those states) to help employers meet their disclosure requirements.