SCHIP Anti-Crowd-Out Act


The State Child Health Insurance Program (SCHIP) is designed to help families with children pay for “high cost insurance coverage.” Because of this, it is improper for individuals who are eligible for other health insurance plans, to be covered under SCHIP. In addition to this restriction, the act also creates a means for subsidizing premiums of high cost plans.

SCHIP Anti-Crowd-Out Act

Section 1. Short Title.  This Act shall be known as the “SCHIP Anti-Crowd-Out Act.”

Section 2. Requirement Regarding Employer-Sponsored Coverage.

(A)  Subject to this Section, no payment may be made under the State Children’s Health Insurance Program (SCHIP) with respect to an individual who is eligible for coverage under a group health plan or health insurance coverage offered through an employer, either as an individual or as part of family coverage.

Section 3. Option to Offer Premium Assistance for High-Cost Plans.

(A)  In the case of an individual who is otherwise eligible for coverage under SCHIP but for the application of Section 2, and who has access to high-cost health insurance coverage, the {insert state} will offer a premium assistance subsidy for such coverage.

(B)  The amount of a premium assistance subsidy under this Section shall be the lesser of:

(1)  An amount equal to the value of SCHIP coverage that would otherwise apply with respect to the individual or family but for the application of Section 2; or

(2)  An amount equal to the difference between:

(a)  The amount of the employee’s share of the premium for the high-cost health insurance coverage for the individual or family; and

(b)  An amount equal to {insert percentage} of the total premium amount which includes both the employer and employee share.

Section 4. Definitions.  As used in this Act, the following definition applies:

(A)  “High-cost health insurance coverage” means a group health plan or health insurance coverage offered through an employer in which the employee is required to pay more than 20 percent of the total premium cost.

Section 5. {Severability Clause.}

Section 6. {Repealer Clause.}

Section 7. {Effective Date.}

Re-approved by the ALEC Board of Directors January 9, 2014.