Obama Signs Children's Healthcare Bill Containing New ERISA Provision

On February 4, 2009, President Obama signed into law the State Children’s Health Insurance Program (SCHIP). This expansion of children’s health insurance includes provisions amending the Employee Retirement Income Security Act (ERISA) by adding new clauses to the end of Section 701(f). In essence, group health plans and insurers are required to allow employees and their dependents 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. The employee or dependent must exercise this option within 60 days. This law also imposes new notice requirements regarding an employee’s options for financial assistance to pay for their employer-sponsored health coverage. Plan administrators must also be prepared to provide to the state, if requested, detailed information about the benefits available under the group health plan.

The Secretary of Labor and the Secretary of Health and Human Services will develop the initial model notices and provide them to employers no later than February 4, 2010. Each employer must give these initial annual notices to employees beginning with the first plan year that begins after the date on which the notices are first issued.

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.