Mandatory Continuous Eligibility for Children in Medicaid and CHIP 
Frequently Asked Questions 
October 27, 2023 
Q1. On or after January 1, 2024, can states terminate CHIP coverage during a continuous 
eligibility (CE) period due to non-payment of premiums? 
A1. No. Sections 1902(e)(12) and 2107(e)(1)(K) of the Social Security Act (the Act), as modified 
by Section 5112 of the Consolidated Appropriations Act, 2023 (CAA, 2023), provide for limited 
exceptions to the requirement that all states provide 12 months of continuous eligibility for 
children regardless of any changes in circumstances that otherwise would result in loss of 
coverage.  These exceptions include the child turning age 19, no longer being a state resident or, 
in the case of a child enrolled in a separate CHIP, becoming eligible for Medicaid.  There is not 
an exception to CE for non-payment of premiums.  Thus, the existing regulatory option at 42 
CFR  457.342(b) for states operating a separate CHIP to consider non-payment of premiums as 
an exception to CE will end on December 31, 2023, and states will not be permitted to terminate 
the Medicaid or CHIP eligibility of a child under age 19 during a CE period for non-payment of 
premiums.  We note that states do not have the option to terminate a childs Medicaid eligibility 
during a CE period under current Medicaid CE regulations at 42 CFR  435.926.  
We recognize that the State Health Official (SHO) Letter we issued on September 29, 2023, 
Section 5112 Requirement for all States to Provide Continuous Eligibility to Children in 
Medicaid and CHIP under the Consolidated Appropriations Act, 2023, provides for three 
exceptions to CE that are included in the current regulations at 42 CFR  435.926(d), 
incorporated by cross reference in the CHIP regulations at 42 CFR  457.342(a), but which are 
not identified in Section 5112 of the CAA, 2023.  Specifically, under the SHO, states may 
terminate coverage of an individual under age 19 before the end of their 12-month CE period if: 
1) the child dies, 2) the child or their representative requests disenrollment or 3) the agency 
determines that eligibility was erroneously granted at the most recent determination, 
redetermination or renewal of eligibility because of agency error or fraud, abuse, or perjury 
attributed to the child or the child's representative. These three exceptions, which permit states to 
terminate coverage for a child who is deceased, who no longer wants to receive coverage, or who 
did not actually meet the eligibility requirements at their last determination, do not undermine 
the CE mandate in section 5112 of the CAA, 2023, and are important to protecting program 
integrity.
States will continue to have the option to institute an enrollment fee in CHIP and require 
payment of the enrollment fee prior to enrollment.  States also will continue to have the option to 
require payment of the first months premium prior to enrolling a child who is determined 
eligible at application.  
States that have already adopted CE for children and treat nonpayment of premiums as an 
exception to CE in CHIP will need to submit a CHIP SPA as outlined in Section IV of SHO 
Letter #23-004.   Q2. If a state or managed care entity covers unpaid premium amounts for a child whose 
coverage must be maintained during a CE period despite nonpayment of premiums, can 
the state receive FFP (Federal financial participation) for such amounts?   
 
A2. No. CMS cannot provide FFP for unpaid premiums covered by the state or any other entity, 
including managed care entities. Existing requirements at 42 CFR  447.56(e)(1) and 
457.224(a)(1) exclude FFP for any cost sharing amounts, including premiums, that beneficiaries 
are expected to pay, and are unchanged by the CAA, 2023. 
 
Currently, some states or managed care entities choose to absorb the costs of unpaid premiums so 
that a child can remain enrolled even if the state would otherwise terminate coverage due to non-
payment of premiums.  Any such payment of premiums of by states or managed care entities 
continues to be ineligible for FFP.