|
|
|
A Service of OnQue Technologies, Inc. |
|
DOL Publishes
Compliance Guide For Qualified Medical Child Support Orders
— What You Need To Know About Court-Ordered Health
Coverage For Children |
January 13, 2004
Santa Rosa,
CA |
The Department of Labor's
Employee Benefits Security Administration (EBSA) has recently published a
Compliance Assistance Guide to help employers, plan sponsors, service
providers, and state officials understand federal laws that regulate qualified
medical child support orders and National Medical Support Notices. In
announcing publication of this guide, Assistant Secretary of Labor Ann L. Combs
said, "By developing this new publication as part of our continuing commitment
to assist plan officials to comply with the law, we will ultimately assist
thousands of children to secure health insurance coverage when their parents
divorce or when mandated by state authorities."
Background.
In 1993, the federal
Employee Retirement Income Security Act (ERISA) was amended to require that
employer-sponsored group health plans extend health care coverage to children
of employees who are divorced, separated or never married when ordered to do so
by state authorities. Divorce agreements often require noncustodial parents to
provide their children with health benefits, including COBRA continuation
coverage, yet not all parents comply voluntarily with the terms of such
agreements. To make sure that health care for the children of divorced and
separated employees doesn't fall through the cracks, state and local courts and
agencies can require ERISA-covered health plans to provide benefits to
dependent children by issuing medical child support orders.
Two types of medical support orders. Employers and plan administrators
may see two types of medical support orders: state domestic relations court and
agency orders, referred to as "Qualified Medical Child Support Orders"
(QMCSOs), and orders issued by child welfare enforcement agencies on
standardized forms called "National Medical Support Notices." Children who are
subject to these orders are referred to as "alternate recipients."
How do medical child
support orders affect COBRA rights? A child who is covered by a group
health plan under the terms of a QMCSO or NMSN, is considered a qualified
beneficiary with the right to elect continuation coverage under COBRA, if the
group health plan is subject to COBRA regulations and the child would lose
coverage as a result of a COBRA qualifying event. The same legal obligations
imposed on employers and plan administrators for providing coverage to children
subject to medical support orders apply to COBRA coverage. Care should be taken
to provide the required COBRA election forms when a qualifying event occurs
that causes an alternate recipient to lose plan coverage. For example, the
death of a covered noncustodial parent/employee is a COBRA qualifying event
that triggers a 36-month extension of group health plan coverage for the
enrolled child. COBRA notices should be sent directly to each child subject to
the order, and to the custodial parent at the child's last known
address.
How do medical child support orders affect
employees who are not plan participants? An employee who is not a
participant in the employer's group health plan may, nevertheless, be subject
to a medical child support order. Parents cannot be permitted to avoid their
legal support obligations merely by failing to enroll in their employer's group
health plan. So long as the employee is eligible to participate in the plan,
the child named in the order must be provided coverage. If, as a condition for
covering dependents of employees, the plan requires that the employee be a plan
participant, then the plan must enroll both the employee and the dependent
named in the order. The plan may also be required to alter the existing health
coverage options of a plan participant in order to provide the child with the
level of coverage specified in the order. For example, the employee may be
required to enroll in dental and vision coverage if the order requires such
coverage for the child.
Generally, a medical child support order may not
require a plan to provide benefits or options not otherwise available under the
plan, but there are exceptions. Under the federal Social Security Act, states
cannot receive federal Medicaid funds unless they have in place laws relating
to medical child support, which require health plans to:
- Enroll a child under a parent's insurance even if
the child is born out wedlock, does not reside with the insured parent, does
not reside in the insurer's service area, or is not claimed as a dependent on
the parent's federal tax return.
- Enroll a child pursuant to an order regardless of
the plan's open enrollment restrictions.
- Comply with court or administrative orders that
require a parent to provide health coverage for a child.
- Permit a custodial parent to file claims on behalf
of a child under the noncustodial parent's health insurance and to make benefit
payments to the custodial parent.
1. The Qualified Medical Child Support
Order: A QMCSO is a "qualified" medical child support order that creates
the right of a dependent child to receive benefits for which a participant is
eligible under a group health plan. It is a judgment, decree, or order made by
a court or agency pursuant to state domestic relations laws. Only those support
orders that are "qualified" need be enforced, and plan administrators and
employers are responsible for determining, within a reasonable period of time,
whether the child medical support order they have received is qualified.
Under
ERISA, a medical child support order is qualified for enforcement if it
contains:
- The name and mailing address of the employee who
is a participant under the group health plan;
- The name and address of the children who are
subject to the order, or the mailing address of an official or agency as a
substitute for the child's address.
- A specific description of the type of coverage to
be provided; and
- The duration of the period to which the order
applies.
Plans must have in place written procedures for
qualifying medical child support orders.
2. The National Medical
Support Notice: In the past, employers received child medical support
orders from various state and local support enforcement agencies in many
different forms, resulting in confusion and spotty enforcement. The federal
government addressed this problem by passing legislation that requires child
support enforcement agencies to use a standardized form to authorize employers
to provide group health plan coverage for the minor children of noncustodial
employees. This form is known as the "National Medical Support Notice," or
NMSN. Employers and plan administrators have specific legal obligations upon
receipt of a National Medical Support Notice, including withholding the cost of
a child's health coverage from an uncooperative parent's paycheck.
The
NMSN consists of four parts, including instructions:
- Part A: The "Notice to Withhold for Health Care
Coverage" authorizes the employer to withhold from the employee's pay any
contributions required by the group health plan in which the child is enrolled,
including COBRA premiums.
- Part B: The "Medical Support Notice to the Plan
Administrator," which must be forwarded to the employer's plan administrator to
enroll the eligible child.
- Employer Response: This section allows employers
to inform the agency that it does not provide health care coverage for any
employees; that the employee is not eligible for health care coverage; that the
employee no longer works for the employer; or that it cannot withhold the cost
of the coverage because legal withholding limits apply.
- Plan Administrator Response: This section must be
completed by the plan administrator according to the accompanying instructions
and returned to the child support agency.
Sanctions for failure to comply with medical
child support orders:All group health plans that provide medical care to
employees, former employees, or their families, and which are subject to the
provisions of ERISA, must comply with medical child support orders. Due to our
high national divorce rate, most employers and plan administrators will, sooner
or later, receive a qualified medical child support order (QMCSO) or a National
Medical Support Notice (NMSN). Employers that fail to comply with the legal
duties imposed by these orders are subject to state and federal penalties,
substantial fines and, in some cases, even state criminal prosecution.
Sanctions may be imposed for:
- Firing an employee because of a medical child
support order;
- Refusing to hire someone who is subject to a
medical child support order;
- Taking disciplinary action against an employee
because of a medical child support order;
- Failing to withhold income for benefits as
ordered; or
- Failing to transmit payments to health plans as
directed under an NMSN withholding order.
Conclusion: Employers and benefits
administrators should take medical child support orders very seriously because
federal and state laws zealously protect the welfare of children who are
subject to divorce and separation. The mandated procedures for administering
NMSNs must be strictly followed, and reasonable written procedures for
determining whether medical child support orders are qualified under ERISA
standards must be implemented. All available benefits, including COBRA
continuation coverage, must be administered in a manner that guarantees
compliance with the specific requirements of each medical child support order.
Employers and plan administrators are each subject
to very specific obligations under NMSNs and Qualified Medical Child Support
Orders. Consult the following for compliance guidelines.
Department of Labor's Compliance Guide for Qualified Medical
Child Support Orders
For information and a link to the federal rule requiring the use of NMSNs,
including the complete form, click here:
The Office of Child Support Enforcement.
|
|
Related COBRA Tips |
|
National Medical Support
Notices |
| |
|
This information is provided by
OnQue Technologies, Inc. for educational purposes only and does not constitute
legal advice. If legal advice or other professional assistance is required, the
services of a competent professional should be sought.
|
 |
|
Click here to view past
tips: Tips
Archive |
 |
|
|
|
|
Copyright © 2004
OnQue Technologies, Inc. All Rights Reserved. |
|
