Option for States with a separate CHIP program to provide dental-only supplemental coverage

(A) In general Subject to subparagraphs (B) and (C), in the case of any child who is enrolled in a group health plan or health insurance coverage offered through an employer who would, but for the application of paragraph (1)(C), satisfy the requirements for being a targeted low-income child under a State child health plan that is implemented under this subchapter, a State may waive the application of such paragraph to the child in order to provide— (i) dental coverage consistent with the requirements of subsection (c)(6) of section 1397cc of this title ; or (ii) cost-sharing protection for dental coverage consistent with such requirements and the requirements of subsection (e)(3)(B) of such section.

(B) Limitation A State may limit the application of a waiver of paragraph (1)(C) to children whose family income does not exceed a level specified by the State, so long as the level so specified does not exceed the maximum income level otherwise established for other children under the State child health plan.

(C) Conditions A State may not offer dental-only supplemental coverage under this paragraph unless the State satisfies the following conditions: (i) Income eligibility The State child health plan under this subchapter— (I) has the highest income eligibility standard permitted under this subchapter (or a waiver) as of January 1, 2009 ; (II) does not limit the acceptance of applications for children or impose any numerical limitation, waiting list, or similar limitation on the eligibility of such children for child health assistance under such State plan; and (III) provides benefits to all children in the State who apply for and meet eligibility standards. (ii) No more favorable treatment The State child health plan may not provide more favorable dental coverage or cost-sharing protection for dental coverage to children provided dental-only supplemental coverage under this paragraph than the dental coverage and cost-sharing protection for dental coverage provided to targeted low-income children who are eligible for the full range of child health assistance provided under the State child health plan.