The Department of Labor (DOL) has released a new model Children’s Health Insurance Program (CHIP) Notice for employers, with information current as of July 31, 2021. The notice is updated periodically to reflect changes in the states that offer premium assistance subsidies and the contact information for those states. Plan sponsors of group health plans should begin using this updated information.
Why is a Notice necessary?
To inform employees that they may be eligible for premium assistance through CHIP or Medicaid state programs and the options available through the Health Insurance Marketplace. The notice also provides state-specific program descriptions, including the state’s contact information.
Which employees need to receive the notice?
Employers must provide the notice to all employees (regardless of enrollment status) that reside in a state which offers CHIP/Medicaid premium assistance. Since the recipients are based on the employee’s residence and not the employer’s location or where the employee performs their job, most employers find it easier to issue the notice to all employees rather than verify each employee’s residence.
Who is required to provide the notice?
All employers that offer a group health plan to employees residing in a state that provides premium assistance through Medicaid or CHIP.
- Employer Size – All
- Funding Method – All (including fully insured and self-funded plans)
- Church or Government Employers – Included
When does the notice need to be provided?
The notice must be provided annually to employees.
How can employers deliver the notice to employees?
Employers can deliver the notice by hand, first-class mail, or electronic delivery (only if it meets the safe harbor rule). Most employers choose to provide it with their open enrollment materials, SPDs, or other plan materials, which the DOL also permits. Employers must remember to give the notice to all employees regardless of their coverage eligibility, so other delivery options for them should be considered.
Are there any penalties?
The DOL can issue a penalty of $119 per day (updated periodically) for each employee impacted beginning on the first day the employer failed to meet the notice requirement.
Where can I get a copy of the model Notice?
The model Notice is located on the DOL’s website (under “For Employers and Advisors”).