Substitution Strategies

Monitoring substitution of coverage in CHIP

In their state plans, states must describe the procedures they’ll use to make sure CHIP coverage doesn’t substitute for group health plan coverage. States use different ways to prevent substitution of coverage, like:

Monitoring survey data
Monitoring private insurance databases

Section 2102(b)(3)(C) of the Social Security Act requires states to ensure that CHIP does not substitute for private coverage under group health plans. CHIP regulations at 42 CFR 457.805(a) requires states to include a description of the procedures used to protect against substitution of coverage.

One option states use as a method to prevent substitution of coverage in CHIP is a waiting period, which is a period of time an individual must be uninsured after voluntarily disenrolling from group health plan coverage before enrolling in CHIP. Consistent with 42 CFR 457.805(b), the maximum length of time that a waiting period can be in effect is 90 days. Section 457.805(b)(3) of the regulations also requires states to adopt certain exemptions to any waiting period. States have the option to adopt additional exemptions. Regulations at 42 CFR 457.340(d)(3) and 457.350(i) require states to implement processes ensuring a smooth and seamless transition to other insurance affordability programs for which children may be eligible during a waiting period.

As of February 1, 2024, only 9 states have a waiting period. Of the 9 states with waiting periods, 7 have a 90-day waiting period, 1 state has a two-month waiting period, and 1 state has a one-month waiting period. The 30 states with separate CHIPs that do not implement a waiting period protect against substitution of coverage by using various procedures to monitor for substitution, including use of survey data, and private insurance database checks.

In March 2024, CMS published a final rule which, among other things, eliminates waiting periods in CHIP so that eligible children can access health care immediately. Effective June 3, 2024, states can no longer implement a new waiting period in CHIP. States with existing waiting periods have no later than June 3, 2025, to sunset their waiting periods and establish a substitution monitoring strategy.

The following table provides a summary of state policies in this area as of February 1, 2024.

Separate CHIP Waiting Periods National Snapshot
State	Waiting Period as of February 2024	Exemptions to the Waiting Period (In Addition to Federally Mandated Exemptions under 42 CFR §457.805(b)(3))
Alabama	None	N/A
Arizona	90 days	Newborn children Lifetime insurance limit reached Enrolled in Children's Rehabilitative Services Native American members receiving services from IHS or a 638 Tribal Facility
Arkansas	90 days	From conception to end of pregnancy population
California	None	N/A
Colorado	None	N/A
Connecticut	None	N/A
Delaware	None	N/A
Florida	2 months	Domestic violence led to the loss of coverage The child has exhausted coverage under COBRA continuation provision The health benefits coverage does not cover the child's health care needs Lifetime insurance limit reached
Georgia	None	N/A
Idaho	None	N/A
Illinois	None	N/A
Indiana	90 days	Children in families with incomes at or below 158% FPL
Iowa	1 month	Children in families with incomes at or below 181% FPL Children eligible for dental only supplemental coverage Child lost coverage due to: domestic violence, lifetime insurance limit reached, expiration of coverage under COBRA, or due to reason beyond control of parent such as serious illness of the parent, flood, fire, or natural disaster Health insurance was through an individual plan
Kansas	None	N/A
Kentucky	None	N/A
Louisiana	90 days	From conception to end of pregnancy population Lifetime insurance limit reached Long-term disability or other medical condition
Maine	None	N/A
Maryland	None	N/A
Massachusetts	None	N/A
Michigan	None	N/A
Minnesota	None	N/A
Mississippi	None	N/A
Missouri	None	N/A
Montana	None	N/A
Nevada	None	N/A
New Jersey	None	N/A
New York	None	N/A
Oklahoma	None	N/A
Oregon	None	N/A
Pennsylvania	None	N/A
Rhode Island	None	N/A
South Dakota	90 days	From conception to end of pregnancy population
Tennessee	None	N/A
Texas	90 days	From conception to end of pregnancy population Expiration of COBRA period of coverage HHSC determines good cause exists Loss of coverage in the Texas Employee Retirement System
Utah	90 days	Voluntary termination of COBRA coverage Voluntary termination of coverage by a non-custodial parent Voluntary termination of insurance that does not provide coverage in Utah Voluntary termination of a limited health insurance plan
Virginia	None	N/A
Washington	None	N/A
West Virginia	None	N/A
Wisconsin	None	N/A
Totals	9 states	N/A