Medical Support for Private Sector Employers
What to Do When You Receive a National Medical Support Notice
Provisions for Coverage
Medical support is a form of child support often provided as health care insurance under a parent's policy. However, medical support can take several forms. The non-custodial or custodial parent may be ordered to:
- provide health insurance if available through his/her employer,
- pay for private health insurance (health care coverage) premiums or reimburse the custodial parent for all or a portion of the costs of health insurance obtained by the custodial parent, or
- pay additional amounts to cover a portion of ongoing medical bills or as reimbursement for uninsured medical costs.
If neither parent has health care insurance, the child support order may provide for a specific dollar amount to be deducted for medical purposes. A court or administrative agency may require your employee to provide health insurance for his/her dependents.
Current law requires that every child support order, enforced by a state Child Support Enforcement (CSE) agency, include a provision for health care coverage. States are required to include provisions for health care coverage in their child support guidelines, and the CSE agency is required to pursue private health care coverage when such coverage is available through a noncustodial parent's employer at a reasonable cost.
National Medical Support Notice
To help obtain health care coverage for children, laws were passed, creating the National Medical Support Notice (NMSN). The NMSN is a notice sent to employers from the state child support enforcement agency. Its purpose is to ensure that children receive health care coverage when it is available and required as part of a child support order. It is designed to simplify the work of employers and plan administrators by providing uniform documents requesting health care coverage.
States were required to begin using the NMSN in October 2001 although some states have had to delay implementation until enactment of required state enabling legislation. An appropriately completed NMSN is considered a "Qualified Medical Child Support Order," or QMCSO, and as such must be honored by all employers' group health plans.
The NMSN complies with section 609 (a)(3) and (4) of ERISA, which pertains to informational requirements and restrictions against requiring new types or forms of benefits. It also includes:
- applicable state law provisions for withholding employee contributions due under any group health plan in connection with coverage required to be provided;
- duration of the withholding requirement;
- applicability of limitations on such withholding under title III of the Consumer Credit Protection Act (CCPA), or similar state law;
- prioritization required under state law between amounts to be withheld for purposes of cash support and amounts to be withheld for purposes of medical support, in cases where available funds are insufficient for full withholding for both purposes; and
- the name and telephone number of the appropriate unit or division to contact at the state CSE agency regarding the NMSN.
The NMSN is actually four documents and instructions:
- Part A- Notice to Withhold For Health Care Coverage, will be completed by the CSE agency and sent to the employer with the rest of the packet.
"Employer Response" is just that, your opportunity to respond to the request if one of the following situations exists:
- You do not provide health care coverage for your employees.
- The employee is not eligible for the health care coverage you provide.
- The employee has been terminated or has left this employment.
- The deduction for health care coverage cannot be made because of state or federal withholding limits and the state's priority for withholding. These limitations will be included in the instructions that accompany the NMSN or that you have received from your state, as mentioned above.
Otherwise, follow the steps below to comply with the NMSN.
- Part B- Medical Support Notice To Plan Administrator. This document should be forwarded to your health care plan administrator for handling.
- "Plan Administrator Response" is completed by your plan administrator according to the accompanying instructions and returned to the CSE agency.
Step-By-Step: What To Do When You Receive a NMSN
Many HMOs and other health insurance carriers have reciprocal agreements with each other and provide coverage for each other's insureds outside of service areas. For example, HMO A has a service area in Texas, and HMO B has a service area in California. HMO A has an insured who lives in California, and HMO B has an insured who lives in Texas. HMO A will provide coverage for the HMO B insured, and HMO B will provide coverage for the HMO A insured. The employer's health insurance plan administrator may contact the insurance carrier about a service area residence issue to find out if reciprocal coverage is available.
- Step 1: Once you receive the NMSN, determine whether any of the four categories on the Employer Response apply to you or this employee. You may only be able to determine whether one of the first three apply at this stage.
- Step 2: If so, complete the Employer Response form and return it to the Issuing Agency within 20 business days. If none of the four categories on the Employer Response apply to you or this employee, forward Part B to your plan administrator.
- Step 3: The plan administrator will notify you when enrollment has been completed. You must then notify your payroll department to make the appropriate deductions for employee contributions required under the health plan. It is at this point that you may determine that the total deductions exceed the maximum allowed under the CCPA, and any applicable state law.
- Step 4: If, in fact, you determine that the amount of support coupled with the deduction for health care premiums exceeds the maximum deduction allowable, you must look to state law in the state where the employee is employed to determine the priority for payment. If the CCPA limits preclude payment of ongoing support and health care premiums and the priority scheme does not allow for the payment of the health care premium first, you must notify the issuing agency by completing No. 4 on the Employer Response form and send the form to the agency.
- Step 5: If enrollment cannot be completed until after a waiting period or other contingency, you must notify the plan administrator when the employee is eligible for enrollment.
In order to be "qualified," a medical support order must clearly specify:
- the name and last known address of the participant and the name and address of each child covered by the order;
- a reasonable description of the coverage to be provided, or the manner in which coverage will be determined; and
- the period for which the order applies.
State laws require that health care coverage be provided under a medical support order even if the child:
- was born out of wedlock,
- is not claimed as a dependent for tax purposes, or
- does not reside with the parent or in the insurer's service area