Individuals who are eligible for employer-sponsored group health coverage but are unable to afford the premium may be eligible to receive premium assistance from a state’s Medicaid agency or Children’s Health Insurance Program (CHIP).
The Children’s Health Insurance Program Reauthorization Act (CHIPRA) requires employers that maintain group health plans in states that provide premium assistance subsidies to provide health plan participants with notice of the availability of these programs.
The Department of Labor’s Employee Benefits Security Administration (EBSA) has issued its July 31, 2023, model employer CHIP notice. Premium Assistance under Medicaid and the Children’s Health Insurance Program (CHIP) (dol.gov).
Employers can provide the notice:
- With the summary plan description
- With the open enrollment materials
- With materials notifying the employer of their health plan eligibility
- As a separate document
The notice explaining the right to premium assistance must be provided to employees residing in the listed states at least once annually, without regard to where the employer is located, or where the health plan is situated. Failure to provide notice of this premium assistance opportunity can result in a penalty assessment of $137 per day, per employee (indexed for 2023)
Employers can use (1) the model notice as is, (2) a modification of the model notice, or (3) their own notice, so long as the notice provides at least minimal information about how to contact the relevant state Medicaid or CHIP office. The notice can be provided in written form or electronically, in compliance with the DOL’s electronic disclosure rules. The notice is also available in Spanish on the EBSA website CHIP Model Notice for Employers (dol.gov).
States with Premium Assistance under Medicaid and the Children’s Health Insurance Program (CHIP):
The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.