New Rules Allowing Special Enrollment in Group Health Plans Become Effective April 1!

The Children’s Health Insurance Program Reauthorization Act of 2009 (the “Act”) amends the Internal Revenue Code, ERISA and the Public Health Service Act to expand the provisions pertaining to special enrollment rights in group health plans. Under the Act, a group health plan must allow an employee or an employee’s dependent, if otherwise eligible for coverage, to enroll in the plan if one of the following events occur: (1) the employee or dependent has been covered under Medicaid or a state’s Child Health Insurance Program (a “CHIP”) , and that coverage terminates due to loss of eligibility or (2) the employee or dependent becomes eligible for Medicaid or CHIP assistance for participation in the plan. To enroll, the employee must request coverage within 60 days after the coverage termination date in the case of (1) or the eligibility determination date in the case of (2). The new special enrollment rights are available on and after April 1, 2009. Note that the 60-day election period for the new special enrollment rights differs from 30-day election period that applies to the pre-Act special enrollment rights (i.e., enrollment available upon loss of certain other health care coverage or upon becoming a dependent due to marriage, birth, adoption or placement for adoption).

To implement the new special enrollment rights, a group health plan sponsor should take the following action:

–notify the employees about the new special enrollment rights as soon as possible (and preferably prior to April 1);

–amend or revise the plan, its summary plan description and any notice and other relevant employee communications to provide for or describe the new special enrollment rights (and to coordinate the plan’s rules with the applicable CHIP); and

–consider amending any cafeteria plan, through which coverage under the group health plan may be elected, to provide for the new special enrollment rights.