Grandfathered disclosure statement was the first reporting requirement we addressed followed by creditable drug coverage.  Let’s now focus on the final reporting requirement we are highlighting: CHIP. 

CHIP test

Children’s Health Insurance Program Reauthorization Act (CHIP) is a relatively new notification requirement.  This law allows states to subsidize employer provided group health insurance for children if the state has a subsidy program available through the state Medicaid program.  South Carolina does have such a program.  Therefore, each year on the first day of the group’s health plan anniversary date, employers are required to notify, in writing, all employees of their rights and options under this regulation.  Sample “Model Language” can be found on the Department of Labor’s website at http://www.dol.gov/ebsa/chipmodelnotice.doc.

What does this mean to you?

Failure to comply with CHIP may result in the employer being fined $100 per day in civil penalties.   While agents can keep employers informed of the regulations to a certain extent, employers really should seek counsel from a labor attorney to avoid unnecessary penalties.  We understand that employers are faced with remembering a lot of reporting requirements so we hope these articles have helped jog your memory.