What is a qualified medical child support order?

Employers that administer health plans are required to recognize qualified medical child support orders (QMCSOs) issued by a court or through a state administrative process in much the same way that they must recognize qualified domestic relations orders (see ¶42,060 ). The employer is responsible for deciding if a child support order satisfies the conditions for a QMCSO. If it does, a child who is the subject of the order is called an alternate recipient and is treated as a beneficiary under the plan.

Effective October 1, 2001, employers must treat national medical support notices as QMCSOs under The Child Support Performance and Incentive Act of 1998. Upon receiving such a notice from a state child support enforcement agency, employers of noncustodial parents must forward the notice to their appropriate health plan administrators within 20 days from the date of the notice. In turn, health plan administrators have 40 days from the date of the notice to notify the appropriate state agency as to the following: whether coverage of the child is available; whether the child has been enrolled in the plan; and, if not, what steps must be taken by the custodial parent or appropriate state agency to effectuate coverage, if any. In December of 2000, the PWBA (now EBSA) issued a draft version of the National Medical Support Notice. At the same time, it issued proposed rules that would require employers to add a child to its group policy even if the child (1) was born out of wedlock, (2) does not reside within the plan's service area, (3) is not claimed as a dependent by the employee, or (4) would have to be added outside of the plan's open enrollment period.

QMCSO defined. To qualify as a QMCSO, a medical child support order must:

• create or recognize the existence of a child's right to receive benefits for which the employee or beneficiary is eligible under a group health plan or to assign those rights;

• clearly provide the name and last known mailing address of the employee and the name and mailing address of each child covered by the order (as a privacy safeguard, the name and address of a state or local governmental official may be substituted for the mailing address of the alternate recipient/child);

• provide a reasonable description of the type of coverage to be provided by the plan to each child or the manner in which the type of coverage is to be determined;

• specify the period to which such order applies; and

• not require a plan to provide any type or form of benefit not otherwise provided under the plan.

For QMCSOs issued on or after August 5, 1997, the rule requiring that the medical child support order must specify the effect plan(s) to which the order applies has been eliminated. As a result, with regard to any employee or beneficiary, a QMCSO is considered to apply to each group health plan that has received the order, from which the employee or beneficiary is eligible to receive benefits.

Employer responsibilities. The plan administrator is responsible for deciding if the order satisfies the conditions for a QMCSO. If it does, the child is an alternate recipient and considered a beneficiary under the plan. As an alternate recipient, the child is also considered a participant for reporting and disclosure purposes under ERISA. Reimbursement of benefit payments under a group health plan pursuant to a QMCSO may be made to the child or to the child's custodial parent.

Need for written procedures. A qualified health plan must establish reasonable written procedures to determine if a medical child support order is a QMCSO. These procedures must allow the child to designate a representative to receive copies of notices with respect to a medical child support order. The plan administrator must notify the participant and all alternate recipients that such an order has been received and inform them of the plan's procedures for determining if an order is a QMCSO. Within a reasonable period of time, the plan administrator must determine if the order is a QMCSO and notify all parties of the decision.

State law on QMCSOs. State laws often establish whether a child support order requires a parent to provide health insurance coverage. A recent trend in state law has been to provide specific guidance regarding the content and enforcement of medical child support orders. These state laws often address whether a child support order should require coverage under a parent's health plan, directions on which parent's health plan the child should be enrolled in, directions on enrollment seasons, as well as withholding requirements for the payment of premiums when employers receive notice of a QMCSO. For more information, check State Laws.