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Employer Action Code: Act

Children’s Health Insurance Program reauthorization approved

• Employers must offer special enrollment periods to those eligible but not enrolled in the employer’s plan if the employee or a dependent loses Medicaid or SCHIP coverage, or becomes eligible for premium assistance. In both cases, employees will have 60 days to request enrollment in the employer’s plan.
• Employers will need to review, and possibly amend, summary plan descriptions, cafeteria plan documents and other disclosures to accommodate the 60-day special enrollment period.
• States can offer premium assistance to subsidize the cost of qualified employer-sponsored coverage, but cannot require an individual to accept the subsidy as a condition for receiving SCHIP or state Medicaid benefits.
• States can pay the subsidy to the individual or directly to the employer, although employers can choose to have the subsidy paid directly to their employees.
• Employers must provide detailed information about their health plans to states upon request to help states determine whether to offer premium assistance and supplemental coverage to eligible employees. Group health plan sponsors in states that offer premium assistance will have to provide all employees a description of available premium assistance opportunities.

February, 2009

The information included in this report is general information only and should not be relied upon without further review by the appropriate professional advisers. Watson Wyatt is not a law firm or an accounting firm and is not engaged in providing legal, accounting or tax services or advice.