April 1, 2009 Action Deadline. While employers await revised final cafeteria plan regulations of broad applicability, April 1, 2009 is the deadline for adding new special enrollment rights to group health and cafeteria plan documents, and revising election forms and related explanations, to comply with the Children’s Health Insurance Program Reauthorization Act of 2009 (“CHIPRA”). Signed into law on February 4, 2009, CHIPRA also extends and expands the State Children’s Health Insurance Program (“CHIP”) through provisions for state subsidized premiums for eligible children, which employers will address in the future as states notify them of applicable implementation action.
Expansion of Special Enrollment Rights. Plans that allow health plan premiums to be paid on a pre-tax basis (“cafeteria plans” in Internal Revenue Code parlance) generally must require that the employee’s contribution election be irrevocable for a twelve month period, subject to exceptions for certain status changes and events creating special enrollment rights under HIPAA (such as where the employee had health insurance coverage that was subsequently lost). CHIPRA expands special enrollment rights to permit non-enrolled individuals to obtain coverage in two additional scenarios. First, CHIPRA requires an employer plan to allow an employee (or dependent) who is eligible but not enrolled for coverage under the plan to join if the employee (or dependent) was covered under Medicaid or CHIP and coverage is terminated due to loss of eligibility. In such cases, the employee must request coverage within 60 days of losingMedicaid or CHIP. CHIPRA also provides that if the employee (or dependent) becomes eligible for a premium assistance subsidy under Medicaid or CHIP and requests coverage within 60 days after becoming eligible for such assistance, the employee must be permitted to enroll in the plan. Notably, the notice period under CHIPRA is longer than the 30-day period available under existing special enrollment rights.