SCHIP/Health Insurance for Children | Foster, Swift, Collins & Smith, P.C.

President Obama recently signed into law Title III of the Children's Health Insurance Program (CHIP), which expands state CHIP (SCHIP) programs. CHIP allows states to subsidize premiums for employer-sponsored group health coverage for eligible children and families. It also requires that:

(1) group health plans allow employees and their dependents who are eligible for coverage, but not enrolled, to enroll in the employer's plan, outside the usual enrollment period if they request coverage within 60 days after (a) termination of coverage or loss of eligibility under a Medicaid or SCHIP plan, or (b) being determined to be eligible for a premium-assistance subsidy;

(2) employers that sponsor group health plans notify employees of any premium assistance that is available to them under a Medicaid or SCHIP plan with respect to coverage under the plan; and

(3) group health plan administrators disclose enough information to the state about benefits under the plan for the state to determine the cost effectiveness of providing premium assistance to purchase coverage under the plan.

The new special enrollment rights in item (1) above are effective April 1, 2009. The Department of Health and Human Services ("DHHS") will prepare a model notice to employees that will enable employers to comply with the notice requirements identified in item (2) above. The notice requirement is effective for plan years beginning after the date in which DHHS issues the model notice. In addition, DHHS and the Department of Labor are developing a model disclosure form for plan administrators that would provide information to the state as required in item (3) above.

Self-funded group health plans must be amended to comply with SCHIP. Civil penalties of up to $100 per day may apply for failing to comply with the new notice and disclosure requirements.

Foster, Swift, Collins & Smith, P.C. is a 107-year old law firm with nearly 100 attorneys in five Michigan offices. The firm’s legal solutions are the result of experience, hard work, sound judgment and first rate professionals working cooperatively for the benefit of Foster Swift clients. The firm’s attorneys are members of the following client-centered practice groups: Administrative & Municipal • Banking, Finance & Real Estate • Business & Corporate • Commercial Litigation • General Litigation • Health Care • Employment, Labor & Benefits • Trusts & Estates • Workers’ Compensation

Foster, Swift, Collins & Smith, P.C. Breaking News is intended for general information for our clients and friends. This report highlights specific areas of law. This communication is not legal advice. The reader should consult an attorney to determine how the information applies to any specific situation.

IRS Circular 230 Notice. To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication is not intended to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code, or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed in this communication.

This e-mail is a Foster, Swift, Collins & Smith, P.C. electronic newsletter. If you no longer wish to receive this Breaking News Bulletin, please click UNSUBSCRIBE. You may also call 517.371.8100 or send a letter to Marketing, 313 South Washington Square, Lansing, MI 48933.

Lansing | Farmington Hills | Grand Rapids | Detroit | Marquette