Dresser & Associates

Ready, Fire, Aim – Implementing CHIRPA in Your Organization

This is a guest post by Lida J. Bayne from Ancilla Consulting Solutons, LLC

The Children’s Health Insurance Program Re-authorization Act of 2009 (CHIPRA) was one of the first pieces of legislation passed by the 111th Congress and signed by President Obama. The legislation extends and expands a program – the State Children’s Health Insurance Program – that was initially implemented a decade ago, and will now extend to 2013.

Funded by new tobacco taxes, CHIPRA adds $33 billion in federal funds for children’s health insurance over the next 4 ½ years, covering to 4.1 million children who are otherwise projected to be uninsured by 2013.

Among its provisions to improve medical care for low income children, CHIPRA streamlines enrollment procedures for health coverage; allows for dental coverage and mental health parity; provides states with increased flexibility in covering pregnant women and (legal) immigrant children; and phases out the coverage of adults.

CHIPRA also begins the movement of low income children from state CHIP plans to less costly employer sponsored plans. The two provisions of the legislation targeted to accomplish this, and which are most relevant for employers, are 1) the premium assistance programs which states can now offer, and 2) the requirements around special enrollment rights and employee notices.

Premium Assistance

The Premium Assistance programs are governed by the state in which the employee lives. For those employers whose only employees live in Georgia, premium assistance requirements will not apply until and unless Georgia enacts future legislation to participate.

CHIPRA allows states to provide premium assistance subsidies to participants who want to expand their single coverage to include coverage of their CHIP or Medicaid eligible dependents. The subsidy amount is essentially the difference between the employee portion of the group health plan’s “single” premium and the “employee + children” premium. While not intended to be exhaustive, an employer who has employees living in a state that participates in premium assistance must meet the following requirements:

  • Provide notice to existing and new employees in all states that have adopted premium assistance programs;
  • Provide requested information to the state(s), allowing for a determination of whether the group health plan is qualified for the program;
  • Determine whether to accept the direct subsidy or withhold it from wages and have it reimbursed to the covered employee;
  • Develop procedures to post and track subsidy payments; and
  • Update all Plan documentation to include the premium assistance provisions.

Special Enrollment Rights

HIPAA already provides for special enrollment rights for major life events such as marriage, or the birth or adoption of a child. CHIPRA expands those rights to allow employees and dependents who lose eligibility for Medicaid or state CHIP coverage to enroll in the group plan within 60 days of the qualifying event. In states offering premium assistance, a similar right is afforded those who become eligible for Medicaid or CHIP subsidies. To meet these special enrollment rights for eligible participants, employers will need to:

  • modify plan documents to reflect the special enrollment rights;
  • be prepared to allow mid-year enrollment for CHIPRA qualified participants, effective April 1;
  • provide notice to existing and new employees of their rights to special enrollment under the legislation; and
  • modify systems as necessary to allow tracking of dual “windows” — a 60-day period from the qualifying event for CHIPRA, and a 30-day period for other life events.

The CHIPRA legislation provides for penalties of $100 per day, per violation, for failure to comply with the notice requirements and failure to disclose requested information to the states. Ancilla Consulting Solutions can answer questions regarding relevant notice deadlines, and help you to quickly implement procedures to satisfy the CHIPRA requirements.

Lida J. Bayne
Ancilla Consulting Solutons, LLC

Contributed by:

Dresser & Associates
(207) 885-0809

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