Coverage for all Featured

8:00pm EDT August 26, 2008

Not all employers have the same capacity to provide for their employees’ needs. Most employers want to help their low-income employees be able to provide the kind of health insurance that their families need, but, for a variety of reasons, those employers are unable to provide that coverage directly.

In those cases, employers need to be aware of new programs that have become available in recent years that are designed to provide coverage for families, regardless of income level. There are options, such as Pennsylvania’s Children’s Health Insurance Program (CHIP) that employers can educate their employees about to help employees provide for the needs of their families.

“A lot of times, people think that a program like CHIP is just for people on Medicaid, but that’s not the case,” says John Lovelace, the vice president of Medicaid and CHIP services for the UPMC Insurance Services Division and UPMC Health Plan. “In Pennsylvania, CHIP is available to most uninsured children and teens up to the age of 19, regardless of income, except for those who are eligible for Medicaid (known as ‘Medical Assistance’ in Pennsylvania).”

Smart Business talked with Lovelace about CHIP and other ways to find health benefits for low-income employees.

What factors keep low-income workers from finding family health insurance?

First, low-wage workers are more likely than other workers to be employed in industries that do not offer benefits. They are also more likely to be part-time, or seasonal workers, who also do not have benefits. Studies show that there is a decline in employer-sponsored insurance, which is highest among poor and near-poor employees, those who work in small businesses and those who are under age 35. A majority of employees who are uninsured have no access to employer-sponsored insurance either because no one in their family works for a business that sponsors health benefits, or they are not eligible at work for health benefits.

Do low-income workers have benefit options when an employer-sponsored health benefits plan is not available to them?

Yes. Many states provide options in such cases. For instance, in Pennsylvania, workers may be eligible for the Pennsylvania adultBasic program, which, like CHIP, is offered through the Pennsylvania Insurance Department. To be eligible, an individual must not have other coverage. Premiums are subsidized by the state. However, there are more eligible workers than slots on the program, so an applicant may be placed on a waiting list for coverage.

What is CHIP?

CHIP was designed to provide insurance for all uninsured children and teens that are not eligible for enrollment in Medical Assistance programs. This program was established in 1992, and has grown steadily since that time. Beginning in 2007, following the state’s ‘Cover All Kids’ initiative, the program’s reach has been greatly expanded. Now, there are no upper income limitations on membership. CHIP is administered by private health insurance companies that are licensed and regulated by the Pennsylvania Insurance Department and are contracted by the state to offer CHIP.

Is CHIP designed exclusively for low-income families?

No family makes too much money for CHIP. There is no upper income limit. If your company does not provide coverage for your employees’ families, you can help by offering education about CHIP, as that could provide the coverage their children and teens require. For example, if a family of four makes up to $42,400 a year, the family is eligible for what is known as free CHIP. There are no premiums and no co-payments with free CHIP. A variety of low-cost CHIP programs are available for a family of four that makes up to $63,600. Depending on income level, premiums can range from about $35 a month to less than $60. If a family of four makes more than $63,600, they are still eligible to purchase CHIP at cost. Monthly premiums for at-cost CHIP would cost about $143. Children who are enrolled in free CHIP do not have to pay any co-payments for any services. With low-cost and at-cost CHIP, there are co-payments for some services, but there are never any co-payment charges for preventive services.

What obstacles keep low-income employees from enrolling in programs such as CHIP?

First, many people are simply unaware of the program’s existence because they have never been exposed to it, or they don’t think they qualify. They may think it’s a ‘welfare program,’ or a program that they can’t afford. Or, they may even think that their children wouldn’t need it because they are young and healthy. That’s where an employer can help. By making information on these programs available to their employees, or by showing them where they can get more information, employers can help lead their employees to a program that fits their needs.

JOHN LOVELACE is the vice president of Medicaid and CHIP services for the UPMC Insurance Services Division and UPMC Health Plan. Reach him at (412) 454-5269 or