CHIPRA
| Children's Health Insurance Program Reauthorization Act of 2009 |
You were previously provided with a copy of Employer’s “Summary Plan Description.” Its
purpose is to explain the provisions of Employer’s Group Insurance Plan (“Plan”). On
February 4, 2009, the Children’s Health Insurance Program Reauthorization Act of 2009
(“CHIPRA”) was signed into law. The purpose of CHIPRA is to permit states to subsidize
premiums for employer-provided, group health insurance coverage for eligible children in
an effort to reduce the numbers of uninsured children in the United States. CHIPRA
imposes certain obligations and requirements on plan sponsors, regardless of whether the
group health plan is fully insured or self-insured. While all of the requirements on plan
sponsors, regardless of whether the group health plan is fully insured or self-insured. While
all of the requirements for plan sponsors have not been specifically identified, yet, plan
sponsors must provide participants with notice of a special enrollment change effective April
1, 2009.
This Addendum to the Summary Plan Description is intended to provide you with an outline
of your rights and obligations under CHIPRA, including notice of a special enrollment period
set forth below. Please be advised that many of the rules setting forth the additional
requirements under CHIPRA and the availability of state subsidy, if any, will not be available
until such rules and disclosures are developed by the United States Department of Labor
(“DOL”) and United States Department of Health and Human Services (“HHS”). Please read
the Addendum carefully and, to the extent that the Addendum conflicts with the original
Summary Plan Description, please note that the Addendum governs. If you have any
questions about your benefits or the Addendum to the Summary Plan Description, please
contact your employer.
STATE SUBSIDY
Many states, including Michigan, provide insurance coverage for uninsured children whose
family income falls under a certain level. These programs are generally known as the state’
s Child Health Insurance Program (“CHIP”). Under CHIPRA, a state CHIP program now may
elect to offer premium assistance to subsidize employer-provided coverage for eligible
children and families. If Michigan elects to provide such a subsidy, then the subsidy may
either by provided directly to the employee or paid to the employer.
SPECIAL ENROLLMENT
Effective April 1,2009, employees and employees’ dependents, who are eligible but not
enrolled for coverage under the Plan, are permitted to enroll in the Plan for coverage under
the two following scenarios:
1. The employee’s or employees’ dependents’ coverage under Medicaid or CHIP is
terminated because of a loss of eligibility; or
2. The employee or employees’ dependents become eligible for subsidy under
Medicaid or CHIP.
Under the first scenario, an employee must request special enrollment within sixty (60) days
after the loss of coverage. Under the second scenario, the employee must request special
enrollment with sixty (60) days of when eligibility is determined.
REQUIRED DISCLOSURES
Under CHIPRA, plan sponsors maintaining group health plans in states providing a subsidy
to assist with premiums must provide certain notices to employees and make disclosures to
their respective states. For instance, if Michigan elects to offer a subsidy, then plan
sponsors are required to provide written notices to their employees informing them of the
potential for subsidy to assist with the payment of the necessary premiums. Plan sponsors
may distribute the written notice to the employees with the Plan’s enrollment materials, any
open enrollment materials, or with the Summary Plan Descriptions. Model notices for
employees are currently being developed by the DOL and HHS, which must be completed
by February 4, 2010. The above notice is required to be distributed with the first plan year
that begins after the DOL and HHS issue the model notices.
In addition to providing disclosures to employees, plan sponsors of group health plans must
disclose information about their plans upon the request of a state. The purpose is to allow
the state to determine the cost-effectiveness of providing a subsidy for qualifying
individuals and families. Again, the DOL and HHS are required to provide a model
disclosure form for use by plan sponsors. States are prohibited from requesting plan
information until the first plan year that begins after the DOL and HHS issue the model
disclosure form.
PENALTY FOR FAILURE TO COMPLY
All plan sponsors are required to comply with CHIPRA, and failure to do so may become
very costly. Under CHIPRA, the DOL may assess a civil penalty up to $100 a day for a plan
sponsor’s failure to comply with the notice and disclosure requirements.
SUMMARY
Please be advised that many of the new requirements under CHIPRA are still being
developed and limited information is available at this time. Employees, however, should
note the special enrollment period for qualified employees and employees’ dependents set
forth above. If you meet the eligibility requirements, then you much request enrollment
within sixty (60) days of the qualifying event. Failure to request enrollment within that period
will result in the employee’s or employee’s dependents’ inability to enroll in the Plan until the
next open enrollment period. If you have any questions, you should contact your employer.
purpose is to explain the provisions of Employer’s Group Insurance Plan (“Plan”). On
February 4, 2009, the Children’s Health Insurance Program Reauthorization Act of 2009
(“CHIPRA”) was signed into law. The purpose of CHIPRA is to permit states to subsidize
premiums for employer-provided, group health insurance coverage for eligible children in
an effort to reduce the numbers of uninsured children in the United States. CHIPRA
imposes certain obligations and requirements on plan sponsors, regardless of whether the
group health plan is fully insured or self-insured. While all of the requirements on plan
sponsors, regardless of whether the group health plan is fully insured or self-insured. While
all of the requirements for plan sponsors have not been specifically identified, yet, plan
sponsors must provide participants with notice of a special enrollment change effective April
1, 2009.
This Addendum to the Summary Plan Description is intended to provide you with an outline
of your rights and obligations under CHIPRA, including notice of a special enrollment period
set forth below. Please be advised that many of the rules setting forth the additional
requirements under CHIPRA and the availability of state subsidy, if any, will not be available
until such rules and disclosures are developed by the United States Department of Labor
(“DOL”) and United States Department of Health and Human Services (“HHS”). Please read
the Addendum carefully and, to the extent that the Addendum conflicts with the original
Summary Plan Description, please note that the Addendum governs. If you have any
questions about your benefits or the Addendum to the Summary Plan Description, please
contact your employer.
STATE SUBSIDY
Many states, including Michigan, provide insurance coverage for uninsured children whose
family income falls under a certain level. These programs are generally known as the state’
s Child Health Insurance Program (“CHIP”). Under CHIPRA, a state CHIP program now may
elect to offer premium assistance to subsidize employer-provided coverage for eligible
children and families. If Michigan elects to provide such a subsidy, then the subsidy may
either by provided directly to the employee or paid to the employer.
SPECIAL ENROLLMENT
Effective April 1,2009, employees and employees’ dependents, who are eligible but not
enrolled for coverage under the Plan, are permitted to enroll in the Plan for coverage under
the two following scenarios:
1. The employee’s or employees’ dependents’ coverage under Medicaid or CHIP is
terminated because of a loss of eligibility; or
2. The employee or employees’ dependents become eligible for subsidy under
Medicaid or CHIP.
Under the first scenario, an employee must request special enrollment within sixty (60) days
after the loss of coverage. Under the second scenario, the employee must request special
enrollment with sixty (60) days of when eligibility is determined.
REQUIRED DISCLOSURES
Under CHIPRA, plan sponsors maintaining group health plans in states providing a subsidy
to assist with premiums must provide certain notices to employees and make disclosures to
their respective states. For instance, if Michigan elects to offer a subsidy, then plan
sponsors are required to provide written notices to their employees informing them of the
potential for subsidy to assist with the payment of the necessary premiums. Plan sponsors
may distribute the written notice to the employees with the Plan’s enrollment materials, any
open enrollment materials, or with the Summary Plan Descriptions. Model notices for
employees are currently being developed by the DOL and HHS, which must be completed
by February 4, 2010. The above notice is required to be distributed with the first plan year
that begins after the DOL and HHS issue the model notices.
In addition to providing disclosures to employees, plan sponsors of group health plans must
disclose information about their plans upon the request of a state. The purpose is to allow
the state to determine the cost-effectiveness of providing a subsidy for qualifying
individuals and families. Again, the DOL and HHS are required to provide a model
disclosure form for use by plan sponsors. States are prohibited from requesting plan
information until the first plan year that begins after the DOL and HHS issue the model
disclosure form.
PENALTY FOR FAILURE TO COMPLY
All plan sponsors are required to comply with CHIPRA, and failure to do so may become
very costly. Under CHIPRA, the DOL may assess a civil penalty up to $100 a day for a plan
sponsor’s failure to comply with the notice and disclosure requirements.
SUMMARY
Please be advised that many of the new requirements under CHIPRA are still being
developed and limited information is available at this time. Employees, however, should
note the special enrollment period for qualified employees and employees’ dependents set
forth above. If you meet the eligibility requirements, then you much request enrollment
within sixty (60) days of the qualifying event. Failure to request enrollment within that period
will result in the employee’s or employee’s dependents’ inability to enroll in the Plan until the
next open enrollment period. If you have any questions, you should contact your employer.
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