Special Enrollment

The Health Insurance Portability and Accountability Act (HIPAA) provides rights and protections for participants and beneficiaries in group health plans. HIPAA includes protections for coverage under group health plans that allow a special opportunity to enroll in a new plan to individuals in certain circumstances.

Plans Covered

Applies to all medical, dental, and vision plans that are part of a group health plan.

• Plans that qualify as “excepted benefits” do not have to offer special enrollment.

Notice of Rights

The health plan must notify eligible individuals of their HIPAA special enrollment rights.

• This notice should be sent on or before the time the individuals are offered the opportunity to enroll in the Plan.
• This notice can be included in the language on the enrollment form.
• Click Here for DOL model language.

Special Enrollees

HIPAA requires plans to allow certain individuals to enroll in the plan as a result of a special enrollment event. There are three types of special enrollment events:

• Loss of other health insurance coverage.
• Acquisition of a dependent through marriage, birth, adoption or placement forn adoption.
• Becoming eligible for a State Medicaid or premium assistance subsidy (CHIPRA).

Loss of Other Coverage

An employee, the employee’s spouse and dependents, it otherwise eligible for coverage, must be allowed to enroll if they meet the following requirements:

• The individual must have been covered under another group health plan or health insurance (including coverage through the individual  Marketplace) at the time the employer previously offered coverage.
• If the other coverage was COBRA continuation coverage, the individual loses the other coverage at the end of the maximum available coverage period.
• If the coverage was not COBRA coverage, then coverage was terminated as a result of loss of eligibility or the other employer terminated employer contributions.
• The individual must request special enrollment within 30 days of the loss of other coverage or such longer time as the plan may provide.

Coverage must begin on the first day of the month following receipt of the request for special enrollment.

Acquisition of a Dependent

If an employee acquires a spouse or dependent through marriage, birth, adoption or placement for adoption, both the employee and new spouse (in the case of marriage), and the employee, spouse and newly acquired dependent (in all other cases) must be given a special enrollment opportunity.

Please Note: The rules do not require plans to allow dependents who are not newly acquired to enroll, but as a practical matter, many plans do extend special enrollment rights to those individuals as well.

Special enrollment must be requested within 30 days after the date the person becomes a spouse or dependent. The effective date of coverage for special enrollment due to marriage is the first day of the month following the date the plan receives the request. The effective date in all other cases is the date of the special enrollment event.

CHIPRA Eligibility

An employee and the employee’s dependent may enroll if they become eligible for a State premium assistance subsidy. See the material below for additional detail regarding CHIPRA.

• You can also change contribution on a cafeteria plan (e.g., change from individual to family contribution) as permitted by the terms of the cafeteria plan and applicable IRS regulations.

COBRA

An individual does not need to elect COBRA when he or she loses coverage under the other plan to exercise his or her special enrollment right under a new plan. However, if the participant elects COBRA under the other plan, the entire COBRA period must be exhausted to preserve the special enrollment right under a new plan.

In addition, if COBRA coverage ceases because the individual did not pay COBRA premiums or for cause, the individual loses his or her special enrollment right.

Qualified beneficiaries receiving COBRA coverage have the same right to enroll family members as if the beneficiary were an active employee.

CAFETERIA PLANS

Cafeteria plan regulations permit employees to change their health plan contribution election consistent with the exercise of their special enrollment rights. This includes retroactive elections but only in the case of birth, adoption ofm placement for adoption.

Health FSA are typically considered excepted benefits and therefore HIPAA’s special enrollment rules do not require them to allow a change in election. However, under the permissive rules for election changes, Health FSAs may allow election changes consistent with those rules.

RETIREES

Plans that cover only retirees are not subject to HIPAA’s special enrollment requirements.

Plans that cover both active employees and retirees must provide special enrollment rights to retirees only in the case of the retiree’s acquisition of a dependent and then only if the retiree is covered under the plan at the time of the acquisition.

CHIPRA

The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) reauthorized the Children’s Health Insurance Program (CHIP). Under this Act, group health plans and group health insurance issuers must offer new special enrollment opportunities.

Effective April 1, 2009, employees or dependents must be allowed to enroll in mid-year if they lose Medicaid or Children’s Health Insurance Program (formerly known as the State Children’s Health Insurance Program or SCHIP) coverage by losing eligibility or become eligible for Medicaid or CHIP assistance with group health plan premiums.

Special Enrollment

Effective April 1, 2009, plans and issuers must permit employees and dependents who are eligible for, but not enrolled in, a group health plan to enroll in the plan upon:

• losing eligibility for coverage under a State Medicaid or CHIP program, or
• becoming eligible for State premium assistance under Medicaid or CHIP.

Special Enrollment Timing

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.  Please note that this is longer than the 30 days normally required by HIPAA’s Special Enrollment rules.

Notice Requirement

The U.S. Department of Labor issued a model federal Notice (the “Employer CHIP Notice”) for employers to use to notify employees regarding eligibility for premium assistance under Medicaid or CHIP in the employee’s state of residence.

What Must the Notice Say?

The Employer CHIP Notice, or a similar notice containing the state-specific disclosures required by CHIPRA, must inform employees of  the potential  availability of premium assistance in the state in which the employee resides.

Employers are not required to use the Employer CHIP Notice issued by the Department of Labor.  However, employers should rely on the DOL’s model notice when drafting their notice, especially if the employer has employees who reside in multiple states.  The model notice contains premium assistance information and contacts for every state in the United States that provides any type of qualifying assistance under CHIPRA, and will be updated annually.

The fact that the DOL will permit employers to meet the CHIPRA notice obligations with a single notice referencing all states in which premium assistance is available, as evidenced by the Employer CHIP Notice, significantly simplifies the administrative burden for employers with employees residing in multiple states.  The Employer CHIP Notice may be customized to meet the needs of a specific employer if necessary.

Please note that it is the individual employee’s or beneficiary’s responsibility to determine whether he or she is eligible for Medicaid or CHIP premium assistance and may use the information provided on the notice to contact the appropriate State agency if assistance in determining eligibility is needed.

What Employers Must Provide a Notice?

CHIPRA imposes a notice requirement on employers who maintain a group health plan with participants or beneficiaries (employees, dependents, COBRA qualified beneficiaries, etc.) residing in one or more states that provide medical assistance under either a state Medicaid plan (under Title XIX of the Social Security Act, or child health assistance under a state child health insurance program (under Title XXI of the Social Security Act), in the form of premium assistance for the purchase of coverage under a group health plan.   Because the state in which the employee resides may or may not be the same as the state in which the employer, the health plan, its insurer, or other service providers are located, employers should take care in determining whether they are obligated to provide the notice, and may want to take the cautious approach of providing the notice to all employees.

Who Should Receive the Notice?

All employees who reside in a state providing a premium assistance subsidy under Medicaid or CHIP must be provided an Employer CHIP Notice or similar notice containing the required state-specific disclosures.   It is important to note that the notice must be provided to all employees, not just those employees who are eligible or elect to participate in the employer’s group health plan.

As noted in the sections above:

• Employers may want to consider providing this notice to all employees to avoid missing any otherwise eligible employees.
• It is the individual employee’s or beneficiary’s responsibility to determine whether he or she is eligible for Medicaid or CHIP premium assistance.

How Should the Notice Be Provided?

The notice required by CHIPRA must be sent on an annual basis, free of charge.  The notice must be provided as a separate document but can be furnished along with other plan materials, such as in an open enrollment packet or Summary Plan Description (SPD), provided that:

• the materials are provided no later than the date specified under the “When Must the Notice Be Sent?” heading;
• the materials are provided to all employees entitled to receive the Employer CHIP Notice; and,
• 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.

See the Delivery Methods compliance activity for additional information for distributing disclosures required by ERISA and other applicable law.

Placing the notice in the plan’s Summary Plan Description (SPD) will satisfy the distribution requirement only if the SPD is provided to all eligible employees on or before enrollment or as otherwise specified in the notice’s distribution requirements.

When Must the Notice Be Sent?

The CHIP notice may be distributed at any time during the plan year.