On Feb. 4, 2009, President Barack Obama signed into law the Children's Health Insurance Program Reauthorization Act of 2009 (the "Reauthorization Act"). The new law reauthorizes the State Children's Health Insurance Program ("SCHIP," now known as "CHIP"), a federal program designed to grant funds to states to provide health insurance coverage for children whose families do not qualify for Medicaid, and who do not have insurance through an employer or the resources for private insurance, and also provides for new coordination between CHIP and group health plans. Employers should be mindful of the impact of this new law on their group health plans.

First, the Reauthorization Act includes new disclosure requirements for group health plans. Employer-sponsored group health plans in states that provide medical assistance through Medicaid or any other state premium assistance program, like CHIP, must give each employee a written notice informing them of potential opportunities for premium assistance in their state. The notice may be provided with enrollment materials or with the furnishing of the plan's Summary Plan Description. The Department of Labor ("DOL") may impose a civil penalty of up to $100 per day for failure to provide such notices. The Department of Health and Human Services is expected to release model notices and forms for these purposes within the year.

Second, upon request and subject to penalties, Plan Administrators are responsible for reporting information to the state regarding the plan participants' eligibility for premium assistance, and whether there is a need for CHIP to provide supplemental benefits. Failure to comply with this disclosure requirement could result in a civil penalty of up to $100 per day from the date of the Plan Administrator's failure to provide this information. Model nutritive should be developed within 18 months.

Finally, the Reauthorization Act creates a new special enrollment period of 60 days for employees under group health plans when (i) an employee loses eligibility under Medicaid or CHIP; or (ii) an employee becomes newly eligible for premium assistance through Medicaid or CHIP. Under the new rules, each employee has 60 days to request coverage under the employer-sponsored plan. Employers will need to update plan documents and summary plan descriptions to describe this additional enrollment period. At this time, it appears that this provision will be effective April 1, 2009, which means that employers must take immediate action.