Revoke 125 POP election to get on State Health Plan for kids.

[Guest JeffreyNav]

Can a participant in a 125 (POP only) revoke an election covering a dependent, so that the dependent can get covered on a state health plan for kids? The dependent just became eligible for this type of coverage.

[Guest JerseyGirl]

Check the Plan Documents first to be certain this specific plan does allow for a mid-year change of status election change. If not spelled out otherwise, the plan could permit the employee to cancel or reduce coverage of the dependent based on the newly acquired eligibility for a state insurance plan. The change could only be made prospectively.

[Guest JeffreyNav]

I was told that this type of "event" does not meet the consistency rule. The plan doc is ok.

Confused now.

[Sandra Pearce]

What were you told was inconsistent about dropping coverage for a dependent who has become newly eligible for other coverage?

[Guest JeffreyNav]

I was quoted from the EBIA green book that changes in eligibility for nonemployer sponsored coverage generally will not allow, for changes in status, an election change under this aspect of the consistency rule. as it wasn't on account of and corresponding to a change in status that affects eligibility for coverage under an employers plan.

[GBurns]

I cannot see the relevance of the consistency rules to this situation.

I suggest that you go to the Treas Regs themselves and see what they say so that you can understand and counter whatever is being told to you.

http://www.changeofstatus.com/resources/regs.asp

Pay particular attention to 1.125-4© 2)(iv) Dependent satisfies or ceases to satisfy eligibility requirements.

Then check your Plan Document and SPD to see what the actual eligibility requirements are. There are many plans that state that if you are eligible for Medicare, Medicaid or any other coverage etc, you are no longer eligible for this plan.

Also note 1.125-4(e) Entitlement to Medicare or Medicaid.

Then ckeck the state plan for which this dependent has now become eligible. Many state programs are subs of Medicaid.

While you are at the Treas Regs read the Consistency rules at 3) yourself and decide if they are applicable any at all.

[Mary C]

The Social Security regs which set up the state healthy kids program prohibit dropping group coverage to put the kids on the plan. This is also in the Section 125 regs and most state healthy kids plans I've reviewed for our associates also state the kids are not eligible if enorlled in group coverage and some even is not enrolled but available.

State Healthy Kids program (SCHIP) is NOT part of Medicare or Medicaid.

[GBurns]

The relevant Treas Regs 1.125-4(e) very clearly explains the change allowed for Medicare and Medicaid entilement or enrollment:

(e) Entitlement to Medicare or Medicaid. If an employee, spouse, or dependent who is enrolled in an accident or health plan of the employer becomes entitled to coverage (i.e., becomes enrolled) under Part A or Part B of Title XVIII of the Social Security Act (Medicare) (Public Law 89-97 (79 Stat. 291)) or Title XIX of the Social Security Act (Medicaid) (Public Law 89-97 (79 Stat. 343)), other than coverage consisting solely of benefits under section 1928 of the Social Security Act (the program for distribution of pediatric vaccines), a cafeteria plan may permit the employee to make a prospective election change to cancel or reduce coverage of that employee, spouse, or dependent under the accident or health plan. In addition, if an employee, spouse, or dependent who has been entitled to such coverage under Medicare or Medicaid loses eligibility for such coverage, the cafeteria plan may permit the employee to make a prospective election to commence or increase coverage of that employee, spouse, or dependent under the accident or health plan

Which Treas Regs do you see as prohibiting the change?

Which Social Security Regs?

RE;"State Healthy Kids program (SCHIP) is NOT part of Medicare or Medicaid."

Most, if not all, SCHIP programs ARE Medicaid related although funded by Title XXI. The states have only 3 options to use the SCHIP money from CMS, 2 of the options involve making it part of Medicaid and 1 allows a seperate plan. Very few states use a seperate plan. You can start your research here :

http://www.cms.hhs.gov/schip/

[Mary C]

G Burns-

While the regs do list losing eligibility under SCHIP as a reason to allow a change to add dependents, they do not specifically list enrollment in a SCHIP program as allowing a participant to drop dependents. However, when the relevant final Treasury regs were published in the Federal Register - online via GPO access (wais.access.gpo.gov) entltled -

Deaprtment of the Treasury

Internal Revenue Service

26 CFR Part 1

Federal Register January 10, 2001

"In response to comments, the rules udner the proposed regulations that allowed an employee to change his or her election in response to a change made udner a spouse's or dependent's plan has been clarified and broadened. Under the final regulations,t he rule applies to coverage available from any employer plan, including any plan of the same employer and any plan of a different employer. In addition, the regulations have been modified to allow an employee to elect to participant in a cafeteria plan if the employee (or the employee's spouse or dependent) loses coverage under a group health plan sponsored by a governnmental or educational institution, such as a state program under the State Children Health Insurance Program (SCHIP) (footnote 9) THE REGULATIONS DO NOT ALLOW A CAFETERIA PLAN PARTICIPANT TO CEASE PARTICIPATION IN A CAFETERIA PLAN IF HE OR SHE BECOMES ELIGIBLE FOR SCHIP COVERAGE DURING THE YEAR BECAUSE OF A CONCERN THAT SUCH A RULE WOULD VIOLATE A FUNDAMENTAL PRINCIPLE OF TITLE XXI OF THE SOCIAL SECURITY ACT THAT SCHIP COVERAGE NOT SUPPLANT EXISTING PUBLIC OR PRIVATE COVERAGE."

Footnote 9 states - Added to the Social Secutirty Act by section 4901 of the Balanced Budget Act of 1997, Public Law 105-33.

Also, as I said, we've reviewed a number of state eligibility guidelines for SCHIP plans and have found that while all are ADMINISTERED by Medicaid, they state they are NOT Medicaid. Florida Healty Kids, for example, consists of Medicaid, Florida Kid Care (their SCHIP program), Medikids and others- http://www.floridakidcare.com/partners/index.html. The eligiblity guidelines state that the SCHIP program is not Medicaid and that in certain circumstances if you have family coverage available from an employer, you CANNOT enroll in Kid Care. The program also charges a low monthly premium which Medicaid does not. Even if you make more than the income limits, Florida allows you to buy into their SCHIP program. Doesn't sound like Medicaid to me.

just my humble opinion

[GBurns]

I don't know how you read but I just read the link that you gave to http://www.floridakidcare.com/partners/facts.html and it clearly tells me that in 1998 KidCare brought together a number of programs including Medicaid. As stated in the CMS link explaining Title XXI, this is 1 of 3 options that the state has, 2 includes combining with Medicaid and 1 as a separate program. Florida has a combined program So says the link that you gave.

Both of the Florida KidCare programs, MediKids and Florida KidCare, clearly state their relationship to Medicaid:

http://www.fdhc.state.fl.us/Medicaid/MediKids/index.shtml

http://www.floridakidcare.org/

Re the 125 Regs, This is what the regs that you quoted from actually says:

(5) Loss of coverage under other group health coverage. A cafeteria plan may permit an employee to make an election on a prospective basis to add coverage under a cafeteria plan for the employee, spouse, or dependent if the employee, spouse, or dependent loses coverage under any group health coverage sponsored by a governmental or educational institution, including the following--

(i) A State's children's health insurance program (SCHIP) under Title XXI of the Social Security Act;

(ii) A medical care program of an Indian Tribal government (as defined in section 7701(a)(40)), the Indian Health Service, or a tribal organization

(iii) A State health benefits risk pool; or

(iv) A Foreign government group health plan.

I suugest that you read the entire document. http://www.changeofstatus.com/resources/2001final.asp

[papogi]

MaryC is right.

You can add someone to a cafe plan if they lose coverage under SCHIP.

You can't drop someone from a cafe plan if they start coverage under SCHIP.

[Mary C]

Needless to say, I agree with Papago.

What you cite is the section allowing enrollments due to loss of other coverage. Please show me the section that allows cancellation that says enrollment in a SCHIP program, and it specifically states SCHIP, is an event to allow cancellation of coverage? Are you suggesting we ignore what's published in the Federal Register?

[GBurns]

I am not suggesting that you ignore what is published in the Federal Register. Not everything, nor every part/line that is published in the Federal Register is part of the law or Regulations, some items are comments etc.

This is the IRS view, in the simplest form that I know, See page 6 item (d):

www.irs.gov/pub/irs-utl/ intro_to_cafeteria_plans_doc.pdf

As it says, you can revoke (drop) a dependent from a Cafeteria Plan upon their Medicaid entitlement. It also quotes 1.125-4(e) which I have been trying to get across. This is consistent with the Consistency rules among other things.

Medicaid in most states includes SCHIP.

[Mary C]

I have been called stubborn, but I prefer tenacious. Here's what the Social Security Admin law says regarding SCHIP coverage - see section (b)(3)© - that the SCHIP coverage not substitute for coverage provided by employer plans.

SEC. 2102. [42 U.S.C. 1397bb] (a) GENERAL BACKGROUND AND DESCRIPTION.—A State child health plan shall include a description, consistent with the requirements of this title, of—

(1) the extent to which, and manner in which, children in the State, including targeted low-income children and other classes of children classified by income and other relevant factors, currently have creditable health coverage (as defined in section 2110©(2));

(2) current State efforts to provide or obtain creditable health coverage for uncovered children, including the steps the State is taking to identify and enroll all uncovered children who are eligible to participate in public health insurance programs and health insurance programs that involve public-private partnerships;

(3) how the plan is designed to be coordinated with such efforts to increase coverage of children under creditable health coverage;

(4) the child health assistance provided under the plan for targeted low-income children, including the proposed methods of delivery, and utilization control systems;

(5) eligibility standards consistent with subsection (b);

(6) outreach activities consistent with subsection ©; and

(7) methods (including monitoring) used—

(A) to assure the quality and appropriateness of care, particularly with respect to well-baby care, well-child care, and immunizations provided under the plan, and

(B) to assure access to covered services, including emergency services.

(b) GENERAL DESCRIPTION OF ELIGIBILITY STANDARDS AND METHODOLOGY.—

(1) ELIGIBILITY STANDARDS.—

(A) IN GENERAL.—The plan shall include a description of the standards used to determine the eligibility of targeted low-income children for child health assistance under the plan. Such standards may include (to the extent consistent with this title) those relating to the geographic areas to be served by the plan, age, income and resources (including any standards relating to spenddowns and disposition of resources), residency, disability status (so long as any standard relating to such status does not restrict eligibility), access to or coverage under other health coverage, and duration of eligibility. Such standards may not discriminate on the basis of diagnosis.

(B) LIMITATIONS ON ELIGIBILITY STANDARDS.—Such eligibility standards—

(i) shall, within any defined group of covered targeted low-income children, not cover such children with higher family income without covering children with a lower family income, and

(ii) may not deny eligibility based on a child having a preexisting medical condition.

(2) METHODOLOGY.—The plan shall include a description of methods of establishing and continuing eligibility and enrollment.

(3) ELIGIBILITY SCREENING; COORDINATION WITH OTHER HEALTH COVERAGE PROGRAMS.—The plan shall include a description of procedures to be used to ensure—

(A) through both intake and followup screening, that only targeted low-income children are furnished child health assistance under the State child health plan;

(B) that children found through the screening to be eligible for medical assistance under the State medicaid plan under title XIX are enrolled for such assistance under such plan;

© that the insurance provided under the State child health plan does not substitute for coverage under group health plans;

(D) the provision of child health assistance to targeted low-income children in the State who are Indians (as defined in section 4© of the Indian Health Care Improvement Act, 25 U.S.C. 1603©); and

(E) coordination with other public and private programs providing creditable coverage for low-income children.

[Guest georgia]

fyi...the following from the Georgia Dept. of Community Health website (www.dch.state.ga.us). DCH administers Medicaid, PeachCare for Kids, Public Employee Health Benefits, Health Planning, Minority Health and several other healthcare related programs unrelated to Medicaid.

How did PeachCare for Kids start?

In 1997, Congress established a new Children's Health Insurance Program (CHIP) to expand coverage to children in low income families. States could either expand the Medicaid program, use an established private health insurance plan, or put together a combination of both.

In 1998, the Georgia General Assembly created a program that is separate from Medicaid yet still administered by the state Division of Medical Assistance, the Medicaid agency.

The Federal legislation that created the CHIP program allots almost $4.3 billion a year up to the year 2001. The Federal/State match is about 73 percent federal funds and 27 percent state funds - a larger federal share than "regular" Medicaid allows.

[GBurns]

Mary C,

To whom is the Social Security Admin law applicable? What makes it applicable to this employee and/or dependent?

The link that you gave is to the requirements placed on the design of the state's plan that is submitted for approval. It was not to the requirements the state places on the applicant for eligibility. How the state meets the Federal requirements to get approval of their plan has nothing to do with the issue.

Florida's eligibility for KidCare is available if the cost of the child coverage in an employer group health plan exceeds 5% of the family income. See the 2nd Q. This is also subject to other factors and consideration which are handled by competent enrollers:

http://www.floridakidcare.org/families/eligibility2.html

MediKids and Healthy Kids, which are also part of the Folrida SCHIP program have other eligibility requirements.

In any case Federal Social Security law would not pre-empt any state Medicaid law. which doesn't matter since the Florida and other state programs are approved by CMS and as anyone can see Florida allows enrollment in SCHIP programs even if an employer group plan is available, but subject to conditions.

So the IRS says Yes and Florida SCHIP says Yes, but with conditions.

georgia,

Yes, that is so. As I pointed out twice, each state has to choose 1 of the 3 options. Georgia chose the separate program option, Florida and most others did not.

[Guest georgia]

GBurns,

I'm sure you'll correct me if I'm wrong...it appears the short answer to JefferyNav's original inquiry is that it depends on which SCHIP option the state in which his participant resides elected.

[GBurns]

You are correct, it depends on the SCHIP option/options that the particular state uses.