TOPEKA — Kansas plans to cut its insurance assistance to the children of lower-income state workers by half, but will allow those children to instead enroll in a federal health program — a move made possible through the Affordable Care Act.

Beginning in 2016, workers who qualify will be able to sign their children up for coverage through the federal Children’s Health Insurance Program, commonly known as CHIP.

At least that’s the plan. The state has yet to file the necessary paperwork.

In July, the Health Care Commission — a panel made up of government officials and current and retired workers that governs the State Employee Health Plan — voted to eliminate $2.2 million in funding for Kansas’ Healthy KIDS program.

Healthy KIDS, now nearly a decade old, helps subsidize health insurance for the children of lower-income state workers. The Kansas Department of Health and Environment, the agency that administers the state health plan, said Healthy KIDS has 1,941 participants.

The state plans to give the affected workers two options: either enroll in CHIP or remain in Healthy KIDS and receive half the benefit.

“Our goal is to minimize the effect of any changes to the Healthy KIDS program for our state employees. Beginning Jan. 1, 2016, employees whose children were in the program will have two options,” KDHE spokeswoman Sara Belfry said.

“The employee and the agency could evenly split the additional costs resulting from the discontinuation of the subsidy, or employees could opt to enroll their children in the CHIP program.”

Agencies who have employees who elect to split the difference will assume the cost from their own funds. It is unclear how many workers will benefit more under a 50 percent reduction versus enrolling in CHIP.

Families of two making $38,868 a year or less qualify for Healthy KIDS, according to income guidelines from KDHE. For a family of four, the threshold rises to $59,172.

Rebecca Proctor, director of the Kansas Organization of State Employees, said she had not heard of Kansas’ plan to allow workers to enroll their children in CHIP. She said her members would be interested to know that.

“The whole reason that subsidy was available was because the individuals who receive it have such low salary. And the idea was to make sure their children could have medical coverage so they wouldn’t be on state or federal programs,” Proctor said.

Prior to the Affordable Care Act — also known as Obamacare — state workers were not allowed to sign up for CHIP.

“However, over time, it has become clear that in some States children of State employees do not, in fact, have access to comprehensive coverage options that are affordable to their families,” federal policy guidance from the Centers for Medicare and Medicaid Services says.

According to the Centers for Medicare and Medicaid Services, the children of many state workers across the country found to not have meaningful access to affordable care were within the income eligibility rules for CHIP.

But for states to qualify their workers’ children for CHIP, they must meet one of two conditions. Either the state has to demonstrate what is called “maintenance of agency contribution” or hardship.

Under the maintenance of agency condition, Kansas would have to show it has consistently contributed to the cost of employee coverage, with increases for inflation, since 1997 according to federal policy guidance.

If the state chooses to qualify through hardship, it has to demonstrate that the coverage currently available through its own health plan for workers poses a financial hardship for families. Under this path, Kansas would have to show annual premiums and cost-sharing imposed under the state plan exceeds 5 percent of a family’s income during the year the child would be enrolled in CHIP.

Officials have not yet decided how Kansas will try to qualify.

“We are still looking into this,” Belfry said.

Kansas must also submit documents with the federal government to allow state workers to begin participating in CHIP. Officials have not yet filed the needed the paperwork, but Belfry said it will be sent by the end of October.

Changes to the Healthy KIDS program comes as state workers face increasing overall health insurance costs as well. Workers in the state’s health plan may see deductibles increase by hundreds of dollars as well as premium increases, depending on their plan options.

According to KDHE, some cost increases over the past few years have been offset by spending from the plan’s reserve funds. But health plan expenses will now need to be covered by the health plan’s revenue.

Plans to allow state workers to enroll in CHIP also follow decisions by Gov. Sam Brownback’s administration earlier this year to decrease state funding to Kansas’ overall CHIP program by $17 million. The administration opted to use an increase in federal funding for the program to make up the $17 million cut, rather than use it to expand CHIP coverage.