The Children’s Health Insurance Program (CHIP) was signed into law in 1997 to help provide health coverage to children in households that can’t afford private coverage and yet make too much money to qualify for Medicaid.
Employers can use the CHIP initial model notice to notify employees of the availability of state premium assistance subsidies, which may help pay for group health plan premiums. Employers who offer a group health plan must provide an annual CHIP notice before the start of each plan year to participants in states that have a Medicaid or CHIP plan.
In tandem with the recent DOL update to the model COBRA notice, the Children’s Health Insurance Program (CHIP) notice has been revised to clarify the availability of Health Insurance Marketplace coverage. Due to the notice being updated, employers should send it again even if it was provided during the open enrollment period.
In order to take the guess work out of which employee resides in a state that provides premium assistance, many employers find it easier to send the CHIP notice to all employees.
The Affordable Care Act (ACA) of 2010 maintained the CHIP eligibility standards through 2019 and extended CHIP funding until October 1, 2015, when the federal matching rate will be increased by 23 percent, making the average federal matching rate 90 percent. In continued efforts to promote Medicaid and CHIP enrollment, the ACA also provided an additional $40 million in federal funding.
CHIP currently provides health coverage to nearly eight million children in families with joint funds by the federal government and states. The federal matching rate for state CHIP programs is typically about 15 percent higher than the Medicaid matching rate for that state (i.e., a state with a 50 percent Medicaid FMAP will have a CHIP matching rate of 65 percent). Every state administers its own CHIP program with broad guidance from CMS.
The CHIP notice is one of many annual notice requirements for employer compliance. If you need relief from this administrative burden, contact us at 800-300-3838 about our Blanket Mailing Notice Service.