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Medicaid / CHIP Premium Assistance Notice

Posted on August 15th, 2016

If you are an employer who offers a group health plan to employees who reside in the following states, then the Department of Labor (DOL) requires you to provide a premium assistance notice to employees who are eligible for the group health plan and who are also eligible (or may become eligible) for Medicaid, including the employees children who are also eligible (or may become eligible) for the Children’s Health Insurance Program (CHIP): 
 
 
The purpose of the notice is to inform employees that the Medicaid/CHIP program in their state may help pay for coverage offered by the employer. Since the notice must be provided to employees and/or their children who may become eligible for Medicaid/CHIP, the notice should be provided to any employee who lives in one of the states mentioned above and who is eligible for the group health plan.    
 
The DOL has a model notice which employers can distribute to applicable employees. It was updated as of July 31, 2016. There is also a Spanish version available. Failure to provide the notice may result in penalties of $110 per day, per employee. 
 
Here are some action items for employers:
 
  1. If coverage is fully insured, check with the insurance carrier to see if they are distributing the notice. 
  2. If coverage is self-insured and administered by a third party, check with the third party to see if they are distributing the notice. 
  3. If the insurance carrier or third party administrator isn’t distributing the notice, make sure you are using the most current version of the notice. The DOL periodically updates the model notice.
  4. In general, the notice should be provided before the start of each plan year (e.g. with open enrollment materials). It should also be provided to employees who become newly eligible for the group health plan, such as new hires.  
  5. The notice can be sent by first class mail. It may also be distributed electronically to employees who normally have access to a work-related computer. However, for employees who don’t normally have access to a work-related computer, consent (as well as an email address) must be provided from the employee to distribute the notice electronically.   
      
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The materials contained within this communication are provided for informational purposes only and do not constitute legal or tax advice.

 

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