[Federal Register Volume 75, Number 23 (Thursday, February 4, 2010)]
[Notices]
[Pages 5808-5811]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-2409]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration


Publication of Model Notice for Employers to Use Regarding 
Eligibility for Premium Assistance Under Medicaid or the Children's 
Health Insurance Program, Notice

AGENCY: Employee Benefits Security Administration, Department of Labor.

ACTION: Notice of the Availability of the Model Notice for Employers 
Regarding Premium Assistance under Medicaid or the Children's Health 
Insurance Program, with Request for Comments.

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SUMMARY: On February 4, 2009, President Obama signed the Children's 
Health Insurance Program Reauthorization Act of 2009 (CHIPRA, Pub. L. 
111-3). CHIPRA includes a requirement that the Departments of Labor and 
Health and Human Services develop a model notice for employers to use 
to inform employees of potential opportunities currently available in 
the State in which the employee resides for group health plan premium 
assistance under Medicaid and the Children's Health Insurance Program 
(CHIP). The Department of Labor (Department) is required to provide the 
model notice to employers within one year of CHIPRA's enactment. This 
document announces the availability of a Model Employer CHIP Notice. 
This notice also requests comments regarding compliance with the 
Employer CHIP Notice requirement for use in the development of future 
compliance assistance materials and/or regulations.

DATES: Comment Date: Comments are due on or before April 5, 2010.

ADDRESSES: Written comments may be submitted via any of the methods 
specified below. Please do not submit duplicates. All comments will be 
made available to the public. Warning: Do not include any personally 
identifiable information (such as name, address, or other contact 
information) or confidential business information that you do not want 
publicly disclosed. All comments are posted on the Internet exactly as 
received, and can be retrieved by most Internet search engines. No 
deletions, modifications, or redactions will be made to the comments 
received, as they are public records. Comments may be submitted 
anonymously.
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected].
     Mail or Hand Delivery: Office of Health Plan Standards and 
Compliance Assistance, Employee Benefits Security Administration, Room 
N-5653, U.S. Department of Labor, 200 Constitution Avenue NW., 
Washington, DC 20210, Attention: Employer CHIP Notice.
    Comments will be posted without change to http://www.regulations.gov and http://www.dol.gov/ebsa, and available for 
public inspection at the Public Disclosure Room, N-1513, Employee 
Benefits Security Administration, 200 Constitution Avenue, NW., 
Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Amy Turner or Beth Baum, Office of 
Health Plan Standards and Compliance Assistance, Employee Benefits 
Security Administration, (202) 693-8335. This is not a toll-free 
number.

SUPPLEMENTARY INFORMATION:

I. Purpose

    This document addresses the Employer CHIP Notice requirement under 
CHIPRA and announces the availability of a model notice that can be 
used to satisfy the content requirements for the Employer CHIP Notice.

[[Page 5809]]

II. Coordination of Administration

    Section 701(f)(3)(B)(i)(II) of the Employee Retirement Income 
Security Act (ERISA), as added by CHIPRA, requires the Departments of 
Labor and Health and Human Services, in consultation with State 
Medicaid and CHIP Agencies, to develop model language for the Employer 
CHIP Notice required under section 701(f)(3)(B)(i) of ERISA, section 
2701(f)(3)(B)(i) of the Public Health Service Act (PHS Act), and 
section 9801(f)(3)(B)(i) of the Internal Revenue Code (Code).
    Section 311(b)(1)(D) of CHIPRA provides that the Departments of 
Labor and Health and Human Services shall develop initial model notices 
as provided under ERISA section 701(f)(3)(B)(i)(II) and the Department 
of Labor shall provide such notices to employers by February 4, 2010, 
which is one year after the enactment of CHIPRA.
    Section 104 of the Health Insurance Portability and Accountability 
Act of 1996 (HIPAA) requires the Departments of Labor, the Treasury, 
and Health and Human Services (the Departments) to ensure that guidance 
under the health coverage provisions of Part 7 of the ERISA, Title 
XXVII of the PHS Act, and Chapter 100 of the Internal Revenue Code,\1\ 
and issued by the Departments that relates to the same matter, be 
administered so as to have the same effect at all times.
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    \1\ The Employer CHIP Notice requirements in the provisions of 
section 701(f)(3)(B)(i) of ERISA, section 2701(f)(3)(B)(i) of the 
PHS Act, and section 9801(f)(3)(B)(i) of Code are included within 
Part 7 of ERISA, Title XXVII of the PHS Act, and Chapter 100 of the 
Code.
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    In accordance with these requirements, this document has been 
developed in coordination with the Departments of Health and Human 
Services and the Treasury, and in consultation with State Medicaid and 
CHIP Agencies.

III. Background

    Under ERISA section 701(f)(3)(B)(i)(I), PHS Act section 
2701(f)(3)(B)(i)(I), and section 9801(f)(3)(B)(i)(I) of the Code, as 
added by CHIPRA, an employer that maintains a group health plan in a 
State that provides medical assistance under a State Medicaid plan 
under title XIX of the Social Security Act (SSA), or child health 
assistance under a State child health plan under title XXI of the SSA, 
in the form of premium assistance for the purchase of coverage under a 
group health plan, is required to make certain disclosures. 
Specifically, the employer is required to notify each employee of 
potential opportunities currently available in the State in which the 
employee resides for premium assistance under Medicaid and CHIP for 
health coverage of the employee or the employee's dependents. These 
notices are referred to in this document as ``Employer CHIP Notices''.
    ERISA section 701(f)(3)(B)(i)(II) requires the Department to 
provide employers with model language for the Employer CHIP Notices to 
enable them to timely comply with this requirement. The model is 
required to include information on how an employee may contact the 
State in which the employee resides for additional information 
regarding potential opportunities for premium assistance, including how 
to apply for such assistance.
    Section 311(b)(1)(D) of CHIPRA provides that the Departments of 
Labor and Health and Human Services shall develop the initial model 
notices under ERISA section 701(f)(3)(B)(i)(II), and the Department of 
Labor shall provide such notices to employers, by February 4, 2010. 
Moreover, each employer is required to provide the initial annual 
notices to such employer's employees beginning with the first plan year 
that begins after the date on which the initial model notices are first 
issued.
    ERISA section 701(f)(3)(B)(i)(III), PHS Act section 
2701(f)(3)(B)(i)(II), and Code section 9801(f)(3)(B)(i)(II) provide 
that an employer may provide the Employer CHIP Notice concurrent with 
the furnishing of materials notifying the employee of health plan 
eligibility, concurrent with materials provided to the employee in 
connection with open season (or other coverage election process under 
the plan), or concurrent with the furnishing of the Summary Plan 
Description (SPD) provided under ERISA section 104(b).

IV. Compliance With the Employer CHIP Notice and Model Language

A. Employers Subject to the Employer CHIP Notice Requirement

    For purposes of the Employer CHIP Notice requirement, an employer 
providing benefits (directly or through insurance, reimbursement, or 
otherwise) for medical care in a State is considered to maintain a 
group health plan in that State. If that State provides medical 
assistance under a State Medicaid plan, or child health assistance 
under a State child health plan, in the form of premium assistance for 
the purchase of group health plan coverage, the employer is required to 
provide the Employer CHIP Notice. The Department of Health and Human 
Services, in consultation with State Medicaid and CHIP offices, has 
informed the Department that, as of January 22, 2010, the following 
States offer one or more programs that meet this standard:

 Alabama,
 Alaska,
 Arizona,
 Arkansas,
 California,
 Colorado,
 Florida,
 Georgia,
 Idaho,
 Indiana,
 Iowa,
 Kansas,
 Kentucky,
 Louisiana,
 Maine,
 Massachusetts,
 Minnesota,
 Missouri,
 Montana,
 Nebraska,
 Nevada,
 New Hampshire,
 New Jersey,
 New Mexico,
 New York,
 North Carolina,
 North Dakota,
 Oklahoma,
 Oregon,
 Pennsylvania,
 Rhode Island,
 South Carolina,
 Texas,
 Utah,
 Vermont,
 Virginia,
 Washington,
 West Virginia,
 Wisconsin, and
 Wyoming.

    Accordingly, if a group health plan provides benefits for medical 
care directly (such as through a health maintenance organization); or 
through insurance, reimbursement or otherwise to participants, 
beneficiaries, or providers in one of these States, the plan is 
required to provide the Employer CHIP Notice, regardless of the 
employer's location or principal place of business (or the location or 
principal place of business of the group health plan, its 
administrator, its insurer, or any other service provider affiliated 
with the employer or the plan). This principle is illustrated by the 
following example:

    Example 1. (i) Facts. An employer in the District of Columbia 
sponsors a group health plan that provides reimbursement for medical 
care to plan participants or beneficiaries residing in the District 
of Columbia, Virginia, Maryland, West Virginia, Delaware, and 
Pennsylvania.
    (ii) Conclusion. In this Example 1, the plan is considered 
maintained in all six States. Because at least one of these States 
offers a premium assistance program, the employer is subject to the 
Employer CHIP Notice requirement.

[[Page 5810]]

B. Employees Entitled to Notice

    An Employer CHIP Notice must inform each employee, regardless of 
enrollment status, of potential opportunities for premium assistance in 
the State in which the employee resides. The State is which the 
employee resides may or may not be the same as the State in which the 
employer, the employer's principal place of business, the health plan, 
its insurer, or other service providers are located. This principle is 
illustrated by the following example:

    Example 2. (i) Facts. Same facts as Example 1, above.
    (ii) Conclusion. In this Example 2, employees residing in 
Virginia, West Virginia, and Pennsylvania are entitled to receive 
the notice because those three States offer premium assistance 
programs. Of course, the employer may send the notice to all 
employees if the employer chooses (for example, if it is 
administratively easier to send the notice to all than to 
distinguish between employees based on residency).

C. Form and Content of Notice

    The Model Employer CHIP Notice was designed as a template to cover 
an array of situations where employees may be entitled to notice and 
may reside (or their families may reside) in States across the nation. 
Employers may use the model template as a national notice to fulfill 
their employer notice disclosure obligation under ERISA section 
701(f)(3)(B)(i), and the parallel provisions of section 
2701(f)(3)(B)(i) of the PHS Act and section 9801(f)(3)(B)(i) of the 
Code. The notice is required to be provided automatically, free of 
charge.
    In consultation with State Medicaid and CHIP offices, some States 
suggested significant modifications to the template and more detailed 
descriptions of their own State programs. Of course, the Model Employer 
CHIP Notice is just a model and States may wish to include additional 
information on their Web sites and in their own compliance assistance 
materials that would encourage further disclosure of any individual 
State premium assistance program. Nonetheless, because employees (and 
their families) may reside in different States than their employer, its 
principal place of business, their health plan, its insurer, or its 
other service providers that may distribute the notice on behalf of the 
employer, the approach of the Model Employer CHIP Notice is to provide 
a very brief description of premium assistance and rely on State 
contact information for State-specific program descriptions. An 
employer which is not facing multi-State complexities and who wants to 
provide more comprehensive State-specific information to its workforce 
may modify the Model Employer CHIP Notice to its employees. However, 
employers should be mindful of the requirement to include at least the 
minimum relevant State contact information for any employee residing in 
a State with premium assistance.
    The employer CHIP disclosure requirement in ERISA, the PHS Act, and 
the Code requires that the notice inform employees of potential 
opportunities for premium assistance ``currently available.'' CHIPRA 
section 311(b)(1)(D) requires the Department of Labor to provide 
``initial'' model notices within one year of CHIPRA's enactment. 
Employers are required to provide ``initial annual notices beginning 
with the first plan year after the date on which such initial model 
notices are first issued.'' The Department, working with the 
Departments of Health and Human Services and the Treasury, and the 
States, intends to update its Web site annually to reflect any changes 
in the number of States offering premium assistance programs (or the 
contact information for those States), to help enable employers to meet 
their CHIP disclosure requirements.

D. Timing and Delivery of the Notice

    Employers are required to provide these notices by the date that is 
the later of (1) the first day of the first plan year after February 4, 
2010; or (2) May 1, 2010. Accordingly, for plan years beginning between 
from February 4, 2010 through April 30, 2010, the Employer CHIP notice 
must be provided by May 1, 2010. For employers whose next plan year 
begins on or after May 1, 2010, the Employer CHIP notice must be 
provided by the first day of the next plan year (January 1, 2011 for 
calendar year plans).
    The Employer CHIP notice is not required to be provided in a 
separate mailing. Plans may combine information to reduce 
administrative costs, if the other requirements of this Notice are met. 
Thus, the Employer CHIP Notice may be furnished concurrent with 
enrollment packets, open season materials, or the plan SPD, provided 
that (1) such materials are provided no later than the date determined 
above, (2) such materials are provided to all employees entitled to 
receive the Employer CHIP Notice, and (3) the Employer CHIP Notice 
appears separately and in a manner which ensures that an employee who 
may be eligible for premium assistance could reasonably be expected to 
appreciate its significance.
    Accordingly, an employer may provide the Employer CHIP notice 
concurrent with other materials (including, for example, enrollment 
packets, open season materials, or the plan SPD) that may be provided 
in advance of the upcoming plan year. This principle is illustrated by 
the following example:

    Example 3. (i) Facts. An employer maintains a group health plan 
with a plan year beginning January 1, 2011. The plan has an annual 
open enrollment season that occurs from October 15, 2010 through 
November 30, 2010 with coverage effective January 1, 2011. Open 
season packets are to be distributed on October 1, 2010 to all 
employees of the employer.
    (ii) Conclusion. In this Example 3, the employer may distribute 
the Employer CHIP notice as a separate, prominent document in the 
open season packet on October 1, 2010 and the notice is required to 
be provided no later than January 1, 2011.

    The notice must be provided in writing in a manner calculated to be 
understood by the average employee. It may be provided by first-class 
mail. Alternatively, it may be provided electronically to the extent 
the criteria of the Department's electronic disclosure safe harbor at 
29 CFR 2520.104b-1(c) are satisfied.
    CHIPRA requires the notice to be provided annually. The Department 
expects to update its Web site with the list of States that offer 
premium assistance programs and provide other additional information 
annually to help enable employers to meet their Employer CHIP notice 
obligations. Comments regarding the Employer CHIP notice requirement 
are invited.

V. Model Employer CHIP Notice

    The model Employer CHIP Notice is available in modifiable, 
electronic form on the Department's Web site: http://www.dol.gov/ebsa.

VI. Additional Information

    In addition to the Employer CHIP Notice requirement, CHIPRA also 
provides that, in order for States to evaluate an employment-based plan 
to determine whether premium assistance is a cost effective way to 
provide medical or child health assistance to an individual, group 
health plans are required to provide, upon request, information about 
their benefits to State Medicaid or CHIP programs. The Departments, in 
conjunction with an advisory committee, are separately developing a 
model coverage coordination disclosure form that will be issued in the 
future. States may begin requesting this information from plans 
beginning with the first plan year after this model form is issued.
    Group health plans and group health insurance issuers must also 
offer new special enrollment opportunities after

[[Page 5811]]

CHIPRA. Effective April 1, 2009, plans and issuers are required to 
permit employees and dependents who are eligible for, but not enrolled 
in, a group health plan to enroll in the plan upon: (1) Losing 
eligibility for coverage under a State Medicaid or CHIP program, or (2) 
becoming eligible for State premium assistance under Medicaid or CHIP. 
The employee or dependent must request coverage within 60 days of being 
terminated from Medicaid or CHIP coverage or within 60 days of being 
determined to be eligible for premium assistance. Information is 
available on the Department's Web site at http://www.dol.gov/ebsa 
regarding special enrollment. Information is also available on the 
Department of Health and Human Service's Web site at http://www.cms.hhs.gov.
    Individuals should contact their State's Medicaid or CHIP program 
to determine if they are eligible for Medicaid or CHIP, and to see if 
their State will subsidize group health plan premiums. Information is 
also available by calling 1-877-KIDS NOW or on the Internet at http://www.insurekidsnow.gov. If they are eligible for premium assistance, 
individuals must contact their plan administrator or employer to take 
advantage of the new special enrollment opportunity and enroll in the 
group health plan.
    Individuals needing assistance or with questions about the 
application of these provisions to their employment-based group health 
plan can call toll free 1.866.444.3272 (EBSA) to speak to a Benefits 
Advisor. Information is also available on EBSA's Web site at http://www.dol.gov/ebsa.

VII. Paperwork Reduction Act Statement

    According to the Paperwork Reduction Act of 1995 (Pub. L. 104-13) 
(PRA), no persons are required to respond to a collection of 
information unless such collection displays a valid OMB control number. 
The Department notes that a Federal agency cannot conduct or sponsor a 
collection of information unless it is approved by OMB under the PRA, 
and displays a currently valid OMB control number, and the public is 
not required to respond to a collection of information unless it 
displays a currently valid OMB control number. See 44 U.S.C. 3507. 
Also, notwithstanding any other provisions of law, no person shall be 
subject to penalty for failing to comply with a collection of 
information if the collection of information does not display a 
currently valid OMB control number. See 44 U.S.C. 3512.
    OMB has approved the model Employer CHIPRA notice information 
collection request pursuant to the emergency review procedures under 5 
CFR 1320.13. The public reporting burden for this collection of 
information is estimated to average approximately 30 seconds per 
respondent. Interested parties are encouraged to send comments 
regarding the burden estimate or any other aspect of this collection of 
information, including suggestions for reducing this burden, to the 
U.S. Department of Labor, Office of the Chief Information Officer, 
Attention: Departmental Clearance Officer, 200 Constitution Avenue, 
NW., Room N-1301, Washington, DC 20210 or e-mail [email protected] and reference the OMB Control Number 1210-0137.

VIII. Statutory Authority

    Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1169, 1181-1183, 
1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c; sec. 
101(g), Public Law 104-191, 110 Stat. 1936; sec. 401(b), Public Law 
105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 101(f), Public Law 
110-233, 122 Stat. 881; sec. 512(d), Public Law 110-343, 122 Stat. 
3765; Public Law 110-460, 122 Stat. 5123; Public Law 111-3, 123 
Stat. 8; Secretary of Labor's Order 6-2009, 74 FR 21524 (May 7, 
2009).

    Signed at Washington, DC, this 1st day of February 2010.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration.
[FR Doc. 2010-2409 Filed 2-3-10; 8:45 am]
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