Title 42, The Public Health and WelfareRelease 119-110
§1396e Enrollment of Individuals Under Group Health Plans
Title 42 › CHAPTER 7 — SOCIAL SECURITY › SUBCHAPTER XIX — GRANTS TO STATES FOR MEDICAL ASSISTANCE PROGRAMS › § 1396e
Summary
States may use federal rules to decide when putting a person who is otherwise eligible for Medicaid into a group health plan will save Medicaid money. If the state finds it is cost-effective, the state can require that person (or a parent for a child) apply to the group plan as a condition of getting or keeping Medicaid. If the person is enrolled, the state must pay the enrollee’s premiums and any deductibles, coinsurance, or other cost-sharing for services the state would normally cover, and must treat the group plan as the primary payer. The federal rules must allow for the fact that people can usually join group plans only at certain times and sometimes only if others (who are not on Medicaid) join too. If a parent does not enroll a child, the child still keeps Medicaid. If enrolling requires also putting non‑Medicaid family members on the plan, the state may pay their premiums if that still saves money, but the state cannot treat their deductibles or coinsurance as Medicaid payments. Being on a group plan does not make someone ineligible for Medicaid, except that the plan must pay first. Definitions: group health plan — the meaning in Internal Revenue Code section 5000(b)(1), and includes continuation coverage under certain federal laws. cost-effective — the meaning given in 42 U.S.C. 1397ee(c)(3)(A).
Full Legal Text
Title 42, §1396e
The Public Health and Welfare, Source: USLM XML via OLRC
(a)Requirements of each State plan; guidelines
Each State plan—
(1)may implement guidelines established by the Secretary, consistent with subsection (b), to identify those cases in which enrollment of an individual otherwise entitled to medical assistance under this subchapter in a group health plan (in which the individual is otherwise eligible to be enrolled) is cost-effective (as defined in subsection (e)(2));
(2)may require, in case of an individual so identified and as a condition of the individual being or remaining eligible for medical assistance under this subchapter and subject to subsection (b)(2), notwithstanding any other provision of this subchapter, that the individual (or in the case of a child, the child’s parent) apply for enrollment in the group health plan; and
(3)in the case of such enrollment (except as provided in subsection (c)(1)(B)), shall provide for payment of all enrollee premiums for such enrollment and all deductibles, coinsurance, and other cost-sharing obligations for items and services otherwise covered under the State plan under this subchapter (exceeding the amount otherwise permitted under section 1396o of this title), and shall treat coverage under the group health plan as a third party liability (under section 1396a(a)(25) of this title).
(b)Timing of enrollment; failure to enroll
(1)In establishing guidelines under subsection (a)(1), the Secretary shall take into account that an individual may only be eligible to enroll in group health plans at limited times and only if other individuals (not entitled to medical assistance under the plan) are also enrolled in the plan simultaneously.
(2)If a parent of a child fails to enroll the child in a group health plan in accordance with subsection (a)(2), such failure shall not affect the child’s eligibility for benefits under this subchapter.
(c)Premiums considered payments for medical assistance; eligibility
(1)(A)In the case of payments of premiums, deductibles, coinsurance, and other cost-sharing obligations under this section shall be considered, for purposes of section 1396b(a) of this title, to be payments for medical assistance.
(B)If all members of a family are not eligible for medical assistance under this subchapter and enrollment of the members so eligible in a group health plan is not possible without also enrolling members not so eligible—
(i)payment of premiums for enrollment of such other members shall be treated as payments for medical assistance for eligible individuals, if it would be cost-effective (taking into account payment of all such premiums), but
(ii)payment of deductibles, coinsurance, and other cost-sharing obligations for such other members shall not be treated as payments for medical assistance for eligible individuals.
(2)The fact that an individual is enrolled in a group health plan under this section shall not change the individual’s eligibility for benefits under the State plan, except insofar as section 1396a(a)(25) of this title provides that payment for such benefits shall first be made by such plan.
(d)Repealed. Pub. L. 105–33, title IV, § 4741(b)(2), Aug. 5, 1997, 111 Stat. 523
(e)Definitions
In this section: (1)
(2)The term “cost-effective” has the meaning given that term in section 1397ee(c)(3)(A) of this title.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
The Internal Revenue Code of 1986, referred to in subsec. (e)(1), is classified generally to Title 26, Internal Revenue Code. The Public Health Service Act, referred to in subsec. (e)(1), is act July 1, 1944, ch. 373, 58 Stat. 682. Title XXII of the Act is classified generally to subchapter XX (§ 300bb–1 et seq.) of chapter 6A of this title. For complete classification of this Act to the Code, see
Short Title
note set out under section 201 of this title and Tables. The Employee Retirement Income Security Act of 1974, referred to in subsec. (e)(1), is Pub. L. 93–406, Sept. 2, 1974, 88 Stat. 829. Title VI of the Act probably means part 6 of subtitle B of title I of the Act which is classified generally to part 6 (§ 1161 et seq.) of subtitle B of subchapter I of chapter 18 of Title 29, Labor, because the Act has no title VI. For complete classification of this Act to the Code, see
Short Title
note set out under section 1001 of Title 29 and Tables.
Prior Provisions
A prior section 1396e, act Aug. 14, 1935, ch. 531, title XIX, § 1906, as added Jan. 2, 1968, Pub. L. 90–248, title II, § 226, 81 Stat. 903, created Advisory Council on Medical Assistance, set forth composition of Council, term of membership of members, and purposes of Council, and provided for compensation of members, prior to repeal by Pub. L. 92–603, title II, § 287, Oct. 30, 1972, 86 Stat. 1457, effective on the first day of the third calendar month following Oct. 30, 1972.
Amendments
2010—Subsec. (e)(2). Pub. L. 111–148 substituted “has the meaning given that term in section 1397ee(c)(3)(A) of this title.” for “means, as established by the Secretary, that the reduction in expenditures under this subchapter with respect to an individual who is enrolled in a group health plan is likely to be greater than the additional expenditures for premiums and cost-sharing required under this section with respect to such enrollment.” 1997—Subsec. (a). Pub. L. 105–33, § 4741(b)(1), in introductory provisions, substituted “Each” for “For purposes of section 1396a(a)(25)(G) of this title and subject to subsection (d) of this section, each” and, in pars. (1) and (2), substituted “may” for “shall”. Subsec. (d). Pub. L. 105–33, § 4741(b)(2), struck out subsec. (d) which read as follows: “(1) In the case of any State which is providing medical assistance to its residents under a waiver granted under section 1315 of this title, the Secretary shall require the State to meet the requirements of this section in the same manner as the State would be required to meet such requirement if the State had in effect a plan approved under this subchapter. “(2) This section, and section 1396a(a)(25)(G) of this title, shall only apply to a State that is one of the 50 States or the District of Columbia.”
Statutory Notes and Related Subsidiaries
Effective Date
of 2010 Amendment Pub. L. 111–148, title X, § 10203(b), Mar. 23, 2010, 124 Stat. 927, provided that the amendment made by section 10203(b)(1) of Pub. L. 111–148 is effective as if included in the enactment of the Children’s Health Insurance Program Reauthorization Act of 2009 (Pub. L. 111–3).
Effective Date
Section applicable, except as otherwise provided, to payments under this subchapter for calendar quarters beginning on or after Jan. 1, 1991, without regard to whether or not final
Regulations
to carry out the
Amendments
by section 4402 of Pub. L. 101–508 have been promulgated by such date, see section 4402(e) of Pub. L. 101–508, set out as an
Effective Date
of 1990 Amendment note under section 1396a of this title.
Reference
Citations & Metadata
Citation
42 U.S.C. § 1396e
Title 42, The Public Health and Welfare
Last Updated
Sep 23, 2026
Release point: 119-110