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New Special Enrollment Rights Under Group Health Plans Effective April 1, 2009

The Children’s Health Insurance Program Reauthorization Act of 2009 (“CHIPRA”), enacted February 4, 2009, requires group health plans to provide two new special enrollment rights beginning April 1, 2009. 

Current Special Enrollment Rights

The Health Insurance Portability and Accountability Act (“HIPAA”) already requires group health plans to permit individuals to enroll upon the occurrence of specified events instead of having to wait until the plans’ next open enrollment period.  Generally, the special enrollment rights are triggered when an individual with other health coverage loses that coverage or when a person becomes a new dependent through marriage, birth, adoption or placement for adoption.

When Are New Rights Triggered?

The new special enrollment events occur when an employee or dependent child –

• loses eligibility for coverage under Medicaid or a State Children’s Health Insurance Program (acronym “CHIP”, for children whose families do not qualify for Medicaid); or
• becomes eligible for premium assistance from Medicaid or CHIP allowing him or her to enroll in a group health plan.

What Must the Health Plan Do?

The group health plan must provide a special enrollment period of at least 60 days for these events. This is longer than the minimum 30-day period required for special enrollment events already available.  The 60-day CHIPRA special enrollment period is measured from the date of coverage loss or eligibility for premium assistance, whichever applies.

Are Cafeteria Plans Affected?

If an employer sponsors a cafeteria plan that permits election changes to be made that correspond to special enrollment rights, the new CHIPRA special enrollment rights also could trigger election changes.    

What Do Employers/Administrators Have to Do Now?

Review/Amend Plans

Sponsors and administrators should review, and, where needed, revise health plan documents, summary plan descriptions, and special enrollment right notices accordingly. If the plan is an insured plan, a PPO or HMO, check whether the insurer or other provider group has issued these amendments.

Notify Employees of Enrollment Rights

Group health plan sponsors should notify employees now about the new CHIPRA special enrollment rights.   If the plan is an insured plan, PPO or HMO, coordinate notices with the carrier or other provider organization.  These notices need to be provided by the effective date, April 1, 2009.

Does CHIPRA Impose Other Requirements on Sponsors and Administrators?

Notices to Employees-State Premium Subsidies

CHIPRA also imposes certain notice requirements on sponsors and administrators of group health plans to inform employees about the availability of state subsidies to help pay for low-income children’s coverage under group health plans.  The notice requirements go into effect the first plan year after the federal Departments of Labor (DOL) and Health and Human Services (HHS) issue a model notice for this purpose.  The model notice is to be issued by February 4, 2010.

These notices can be provided as part of a plan’s enrollment materials and other disclosure materials.

Disclosure to States

The law requires plan administrators to disclose to states, upon request, information about plan benefits, if a participant or beneficiary is covered under Medicaid or CHIP.  The DOL and HHS will develop a model form for this purpose; states may not request this disclosure until the plan year after the models are issued.

Is There a Penalty for Failure to Comply?

The law imposes civil penalties and excise taxes of up to $100 a day for failure to comply with the notice of state premium subsidies and disclosure of plan benefit requirements and the special enrollment rights.