CHIPRA & Section 125 disagreement?

[Mary C]

Under Title III of CHIPRA, it states -

(g) Opt-Out permitted for any month - A state shall establish a process for permitting the parent of a targeted low-income child receiving a premium assistance subsidy to disenroll th child from the qualified employer-sponsored coverage and enroll the child in, and receive child health assistance under the State child health plan, effective on the first day of any month for which the child is eligible for such assistantance and in a manner that ensures continuity of coverage for the child.

To me this sounds like the employee-parent may elect to cancel coverage for the child to enroll the child in a CHIP plan that was established under title xxi of social security.

However, Section 125 does not allow coverage paid for on a pre-tax basis to be canceled to enroll a child in a CHIP plan established or funded by title xxi of social security. It only recognizes Medicaid coverage under title XIX to be coverage to allow cancellation of a dependent.

Does anyone have any words of wisdom on this?

[SLuskin]

Wasn't this one of the changes made in Obama's Stimulus package? I thought all Section 125 Plans had to be amended to include a special 60 day HIPAA enrollment/disenrollment right for SCHIP.