| Greetings! In
this month's edition of the PBG Newsletter, we've included important information
on the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA),
carrier updates, and last, but not least, our first Breakfast Series Seminar!
Legislative
Update On February 4, 2009, President Obama signed
into law the Children's Health Insurance Program Reauthorization Act of 2009 (the
"Act"). The state children's health insurance program ("CHIP")
provides health insurance for children whose families cannot afford private healthcare
but do not qualify for federal Medicaid. The Act expands CHIP by providing additional
special enrollment rights related to group health plan coverage. The new law also
permits state subsidies of employer-provided group health premiums for eligible
children and families and imposes new notice and disclosure obligations for employers
that maintain group health plans.
Special Enrollment Rights
Currently, group health plans must provide special enrollment rights to certain
individuals who lose eligibility for other health coverage or who acquire a new
spouse or dependent. The Act extends these special enrollment rights to employees
and dependents who lose eligibility under a Medicaid plan or CHIP and employees
and dependents who become eligible for a premium assistance subsidy under Medicaid
or CHIP, as described below. Therefore, group health plan documents must be amended
to provide the new special enrollment rights.
Appropriate notices of
the amendment, such as a Summary of Material Modifications, should be provided
to participants in accordance with the plan's existing procedures for providing
such notices. Existing special enrollment notices provided to new enrollees should
also be revised to contain information regarding the new provisions.
Eligible
Individuals must be given 60 days after the loss of coverage or determination
of eligibility for assistance to request coverage under the group health plan.
The effective date for these new special enrollment rights is April 1, 2009.
Premium Assistance Subsidy
The Act allows states to offer
eligible low income children and their families a premium assistance subsidy to
help pay for qualified employer-sponsored coverage. Qualified employer-sponsored
coverage means a group health plan or health insurance coverage. offered by an
employer that (i) qualifies as creditable coverage as a group health plan under
the Public Health Service Act, (ii) for which the employer contribution for the
coverage is at least 40% and (iii) that is offered in a non-discriminatory manner.
Benefits provided under a health flexible spending arrangement or high deductible
health plan are not considered qualified employer-sponsored coverage.
States
that provide a premium assistance subsidy may choose to pay the subsidy as a reimbursement
to an employee for out-of-pocket expenses or directly to the employer. However,
employers may choose to opt out of being directly paid a premium assistance subsidy
on behalf of an employee.
Premium Assistance Notice Requirements
The Act requires employers that maintain group health plans in states that
provide medical assistance under a Medicaid plan or child health assistance under
a CHIP in the form of a premium assistance subsidy to notify their employees in
writing of the potential opportunities available for premium assistance. The Department
of Health and Human Services ("HHS") must develop national and state-specific
model notices for use by employers in notifying employees of premium assistance
opportunities by February 4, 2010. Employers may provide the notice along with
plan materials notifying the employee of health plan eligibility, open enrollment
materials or the summary plan description. The effective date of the premium assistance
notice requirement is the first day of the plan year beginning after the date
on which model notices are first issued. This premium assistance notice requirement
differs from the existing requirement to provide a notice of special enrollment
rights that is mentioned above.
Disclosure to States
Under
the Act, administrators of group health plans must disclose to the state, upon
request, information about the benefits available under the plan if the plan's
participants and beneficiaries are also covered by Medicaid or CHIP. This information
is required so that the state may determine the cost-effectiveness of providing
premium assistance subsidies and may provide supplemental coverage.
The
Act directs HHS and the Department of Labor to jointly establish a Medicaid, CHIP,
and Employer-Sponsored Coverage Coordination Working Group that will develop a
model coverage coordination disclosure form for use by plan administrators. The
effective date for use of the model form is the first day of the first plan year
beginning after the date on which the form is first issued.
Penalty
for Noncompliance with Premium Assistance Notice and Disclosure Requirements
The Act provides for civil penalties of up to $100 a day for failure to comply
with the new requirements to notify employees of premium assistance opportunities
provided by their states and to disclose to the state information about the plan's
benefits if participants and beneficiaries are covered by Medicaid or CHIP.
Legislative Update
Executive Summary
The
U.S. Department of Labor has issued a new model notice that employers can use
in complying with the Children's Health Insurance Program Reauthorization Act
of 2009 (CHIPRA). - If an employer's group health plan
covers residents in a state that provides a premium subsidy, the employer must
send an annual notice about the available assistance to all employees residing
in that state (the Employer CHIP Notice).
- The first Employer CHIP Notice
must be sent by the first day of the first plan year beginning after February
4, 2010, or May 1, 2010, whichever is later. For employers with calendar year
plans, the notice must be sent by January 1, 2011.
- Employers that fail
to send the required notices may be subject to penalties of $100 per day.
Compliance
with CHIPRA
General CHIPRA Requirements
CHIPRA
created additional special enrollment rules for group health plans, effective
April 1, 2009. These rules permit employees and dependents to enroll in an employer's
group health plan when they lose eligibility under a medicaid plan or CHIP or
become eligible for a premium assistance subsidy under Medicaid or CHIP
CHIPRA also added new notice requirements for employers that maintain group health
plans in states that provide premium assistance subsidies under a Medicaid plan
or CHIP. these employers must notify their employees in writing of the potential
opportunities available for premium assistance. CHIPRA provides for civil penalties
of up to $100 a day for failure to comply with the new requirements.
Premium Assistance Subsidies
States may offer eligible low-income
children and their families a premium assistance subsidy to help pay for employer-sponsored
coverage. These states may choose to pay the subsidy as a reimbursement to an
employee for out-of-pocket expenses or directly to the employer. Employers may
choose to opt out of being directly paid a premium assistance subsidy on behalf
of an employee. As of January 22, 2010, 40 states offer some type of premium assistance
subsidy.
Using the Model Employer CHIP Notice
Employers
may use the model notice as a national notice to meeting their obligations under
CHIPRA. Employers could also choose to prepare their own notices, or modify the
model notice. For example, an employer may want to provide more comprehensive
information regarding states where it has a larger workforce or leave out information
about states where no employees reside. Employers should be sure to include at
least the minimum relevant state contact information for any employee residing
in a state with premium assistance.
The information in the model notice
is up to date as of January 22, 2010. The DOL will update the model each year
to reflect any changes in the number of states offering premium assistance programs
or the contact information for those states.
Deadlines for Providing
the Notice
The notice must be provided, free of charge, on an annual
basis. The first notice must be provided by the first day of the first plan year
after February 4, 2010 or May 1, 2010, whichever is later. This rule gives employers
with plan years beginning in March or April some extra time to comply. Employers
with calendar year plans will have to provide the notice by January 1, 2011.
Delivery of the Notice The Employer CHIP Notice
does not have to be provided in a separate mailing. Plans may combine the notice
with other plan materials, such as open enrollment packets or summary plan descriptions,
If: - The materials are provided by the deadlines for
providing the Employer CHIP Notice;
- The materials are provided to all
employees entitled to receive the Employer CHIP Notice; and
- The Employer
CHIP Notice is a separate document so that employees can appreciate its significance.
The notice must be provided in writing in a manner
calculated to be understood by the average employee. It must be provided by first-class
mail. Alternatively, it may be provided electronically if DOL electronic disclosure
requirements are satisfied.
For a copy of the model notice, see www.dol.gov/ebsa/pdf/chipmodelnotice.pdf.
Plan
Year Deductible Change This spring, Harvard Pilgrim
is offering eight new plan-year based benefit designs. Until now, Harvard Pilgrim's
plans have been available only on a calendar year basis. Regardless of an employer's
anniversary date, employees need to think about satisfying deductibles, for instance
between January 1 and December 31. Think of a plan-year design as hitting the
reset button for health plan coverage, financial responsibilities and benefit
limits all at the same time. If an employer has a May 1 anniversary date, for
example, employees have between May 1 and April 30 to satisfy deductibles or use
limited benefits.
The four Best Buy HMO and four Best Buy PPO plan-year
designs are available: - Now to large Group customers for
effective dates starting March 1
- March 1 to small group customers for
effective dates starting May 1
All eight plans
include coverage for 12 chiropractic visits per plan year. Members will be covered
for 20 physical therapy and 20 occupational therapy visits per plan year.
Wellesley,
MA Harvard Pilgrim Health Care Board of Directors
announced on February 11, 2010 that Eric H Schultz will become their new President
and CEO beginning March 1, 2010. Schultz currently services as the President and
CEO of Fallon Community Health Plan (FCHP) where he has worked for more than a
decade. Schultz succeeds former President and CEO Charles D. Baker who left HPHC
in July 2009 and interim CEO Bruce Bullen.
Sincerely,
Brittany Powers
Partners Benefit Group,
Inc. |
