Do we really need to distribute the CHIP notice to all our employees?

November 19, 2024

In short, no, not necessarily. However, the simplest course of action is to distribute the CHIP notice to everyone.

The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) created a voluntary program whereby state governments could elect to provide a premium subsidy for individuals to enroll their dependent children in their employer-sponsored group health plan coverage instead of enrolling directly into the state Children’s Health Insurance Program (CHIP) or Medicaid coverage. Employers must provide a notice to their employees who reside in states with a CHIP premium assistance program notifying them of the program’s availability and contact information — regardless of the employer’s principal place of business, office location, or policy situs. The DOL maintains a Model CHIP Notice on their website, with copies available in both English and Spanish.

Though they may have a Medicaid or CHIP program, not every US state or territory has elected to create a premium assistance program as authorized by CHIPRA. The states that do have a CHIP premium assistance program are listed on the chart that is included in the DOL’s CHIP Model Notice. As of the publication date of the most recent CHIP Model Notice (July 31, 2024), 38 states maintain a CHIP premium assistance program. This means that the remaining 12 states, plus the District of Columbia and the US territories, have no such program.

The CHIP notice must be distributed annually by the first day of the plan year, and it may be combined with other compliance notices or enrollment materials. For this reason, it is commonly included in benefits guides and open enrollment materials.

Employees residing in the 38 states with CHIP premium assistance programs must receive this annual notice. Employees residing in the remaining 12 states, the District of Columbia, and the US territories are not required to receive it. However, many employers provide the notice to all employees regardless of where they live in the interest of administrative ease. The guidance issued by the EBSA explicitly states that this course of action is allowed:

• An employer in the District of Columbia sponsors a group health plan that provides reimbursement for medical care to plan participants or beneficiaries residing in the District of Columbia, Virginia, Maryland, West Virginia, Delaware, and Pennsylvania.
• In this example, employees residing in Virginia, West Virginia, and Pennsylvania are entitled to receive the notice because those three states offer premium assistance programs. Of course, the employer may send the notice to all employees if the employer chooses (for example, if it is administratively easier to send the notice to all employees than to distinguish between employees based on residency).

If your employees live exclusively in a state or states without a CHIP premium assistance program, there is no need to distribute the CHIP notice. However, best practice remains including the notice in the benefits guide and distributing it to all employees, who can then determine for themselves whether they might be eligible for a CHIP premium assistance program.

For additional information on this topic, please refer to:

• PPI's publication Required Group Health Plan Notices Overview
• DOL CHIP Model Notice for Employers
• EBSA CHIP Notice Guidance to Employers