Children's Healthcare Bill Would Require Employers to Amend Their Group Health Plans

The U.S. House of Representatives will begin consideration this week of Senate amendments to the Children’s Health Insurance Program Reauthorization Act of 2009 (H.R. 2), which has already cleared both houses of Congress. This bill, which expands the State Children’s Health Insurance Program (SCHIP), contains provisions in both the House and Senate versions that would amend the Employee Income Retirement Security Act (ERISA).

Specifically, both versions of this healthcare bill would add new provisions to the end of Section 701(f) of ERISA mandating that group health plans and insurers allow employees and their dependants who are eligible for coverage but are not enrolled in the group plan to enroll if they become ineligible for Medicaid or a state child health plan, or if they become eligible for financial assistance from Medicaid or a state child health plan. If the employee or dependant chooses to enroll in either situation, he or she must do so within 60 days. Moreover, an employer would be required to notify employees in writing of any state Medicaid or child health assistance available to them if they need financial help to pay for their employer-sponsored health coverage. Notices would also be required when employees become eligible for employer-sponsored health plans, receive materials during health plan open season or election process, or when they receive summary plan descriptions.

Model notices for employers to use would be developed by the secretaries of labor and health and human services, along with the directors of state Medicaid and child health plan agencies.

In addition, plan administrators would be required to provide to the state, upon request, information about the benefits available under the group health plan “in sufficient specificity” so as to permit the state to make a determination of the cost-effectiveness of providing medical or child health assistance by offering premium assistance and supplemental benefits to employees.

Employers in violation of the provisions of this bill could be fined up to $100 per day.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.