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Small Business Employee Benefits and HR Blog

Children’s CHIP Coverage and Subsidized Marketplace Plans

The Children’s Health Insurance Program (CHIP) is a low-cost – and sometimes Children’s CHIP Coverage and Subsidized Marketplace Plansfree – health insurance option for children who qualify based on family size and income levels. Children who qualify can receive coverage that provides numerous benefits; however, eligible children cannot be included on their parents’ subsidized Marketplace plans.

What Is CHIP?

CHIP provides affordable health coverage for children of parents whose earnings are too high to qualify for Medicaid yet who cannot financially provide insurance for their children. Every state provides CHIP coverage, which sometimes includes pregnant women and parents as well. CHIP is partially funded by the federal government but is administered by the states. The benefits offered under CHIP differ from state to state, but all states’ CHIP programs provide for doctor visits, routine checkups, immunizations, prescriptions, emergency care, dental and vision care, mental health benefits, hospital care, laboratory services, and prescriptions.

Qualifying and Applying for CHIP

The federal government has minimum guidelines for eligibility, but states have the option to expand eligibility beyond those guidelines. CHIP is available to children under the age of 19 who are U.S. citizens, U.S. nationals, or eligible aliens. Although each state has its own rules about who qualifies for CHIP, eligibility and costs are generally based on family size and income.

Parents, grandparents, or legal guardians can apply for a child’s CHIP coverage, which must be renewed annually. There are two ways to apply: by filling out an application on the Health Insurance Marketplace or by applying directly through a state’s Medicaid agency. Unlike the situation with regular individual health insurance, there is no special enrollment period, which means that parents can apply for CHIP coverage at any time of the year.

CHIP and the Marketplace

In some states, parents must have notably lower salaries to qualify for Medicaid for themselves than they would need to have to qualify for coverage for their children through CHIP. If children qualify for CHIP, but their parents are not eligible for Medicaid, the parents may still be able to afford coverage through the Marketplace via cost assistance savings, which are based on income.

Importantly, if children are found eligible for CHIP based on their parents’ income, they will not qualify for any savings on Marketplace insurance plans. Therefore, if parents who do not qualify for Medicaid purchase a subsidized plan through the Marketplace, any of their children who are deemed eligible for Medicaid or CHIP cannot be included on the plan. Instead, their children will be part of a separate Medicaid or CHIP plan.

Conclusion

In contrast to the application process for individual health insurance, there is no open enrollment period for CHIP – parents can apply at any time throughout the year. CHIP coverage allows certain families to save money on their children’s health insurance while enjoying many benefits, such as mental health and hospital care. However, children who qualify for CHIP are not allowed to be included on any subsidized insurance plans that are purchased by their parents from the Marketplace.

What questions do you have? Let us know in the comments below!

 

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