Preview of July Compliance Checkpoints: Qualified Medical Child Support Orders and National Medical Support Notices
Tracking various laws and regulations impacting employee benefits can divert time and resources from your efforts to build a better workplace — one that attracts, engages and retains top talent at the right cost structure. As you develop and sustain a wellbeing-centric culture, you’ll optimize your annual talent investment and mitigate organizational risk to maximize profitability. Best of all, you’ll gain a competitive advantage as a workplace that simply works better. How can you keep pace with evolving legislative and regulatory initiatives and still have the time, resources, and drive to sustain a better workplace?
As a trusted advisor, Gallagher will help you navigate the ever-changing landscape of employee benefits compliance issues. This edition of Compliance Checkpoints is designed to help guide you as you work to decrease the risks associated with human capital management while maximizing your investment in your workforce, especially when seeking to comply with Qualified Medical Child Support Orders (“QMCSOs”) and National Medical Support Notices (“NMSNs”). Check out the action steps below aimed at helping you navigate often overlooked requirements for QMCSOs and NMSNs.
- Understand. Differentiate. Process. QMCSOs and NMSNs are two rather different vehicles that require employers to provide coverage for certain children, called alternate recipients. For example, QMCSOs can either be court-ordered or issued by a child support agency, but NMSNs are only issued by state agencies. In addition, court-ordered QMSCOs arrive in different formats, but NMSNs must follow specific content requirements. Employer-sponsored health plans may be subject to either QMCSOs or NMSNs, or both. Health plans subject to ERISA are subject to both. Church-sponsored health plans are subject to both. Nonfederal governmental health plans are only subject to NMSNs. It is important to understand which set of rules apply to your health benefits because the process for accepting a QMCSO (that is not also an NMSN) is slightly different than the process for accepting an NMSN, particularly with regard to evaluating content and timing. Are you and your staff familiar with the differences between an NMSN and a QMCSO from a court or state agency?
- Plan. Communicate. Cover. When you first receive a medical child support order, your plan administrator must promptly notify the participant and the alternate recipient that you have received the order and provide information about the plan’s procedures for determining if the order is a QMCSO. Within a reasonable period of time after receiving the order, your plan administrator must determine if the order is a QMCSO and then notify the participant and the alternate recipient of the decision. As a best practice, your plan administrator may satisfy the notice requirement by including a copy of the plan’s QMCSO procedures with the notice acknowledging receipt of the order. Additional communication requirements apply to NMSNs. What is your plan administrator’s process for receiving medical child support orders.
- Clarify. Document. Notify. Each group health plan must establish reasonable procedures to determine whether medical child support orders are QMCSOs (a properly completed NMSN is a QMCSO) and then administer the provision of benefits under those orders. The procedures must be in writing and provide that each person specified in a medical child support order as eligible to receive benefits under the plan will be notified of such procedures (at the address included in the order) promptly upon the plan’s receipt of the order. Additionally, the procedures must permit an alternate recipient to designate a representative for receipt of copies of notices that should be sent to the alternate recipient with respect to a medical child support order. The representative may be a custodial parent, a state agency, or another designated individual. Are your QMCSO procedures reasonable and thorough?
- Review. Qualify. Enroll. Generally, your QMCSO procedures should include a qualification checklist for your plan administrator to use when reviewing medical child support orders. The checklist should allow you to document when an order or notice was received, establish contact information for the plan participant and all alternate recipients, include steps to determine whether an order or notice is “qualified,” document all responses sent to the alternate recipient, and establish applicable enrollment information, if any. What does your QMCSO checklist cover?
- Determine. Enroll. Cover. Your plan administrator must determine if a medical child support order is a QMCSO and, if so, provide coverage to the child. If the employee is eligible to participate in the plan, the child must be covered. If, as a condition for covering dependents, the employee must be enrolled, then the plan must enroll both the employee and child. Further, if any additional information is needed in order to enroll the child, the alternate recipient and participant should be notified of the need. What are your requirements for coverage of an alternate recipient?
And, there are five more action items this month. This is just a preview of the July issue of Compliance Checkpoints. If you would like the full version of Compliance Checkpoints or would like additional information on how Gallagher constantly monitors laws and regulations impacting employee benefits and supports employers in their compliance efforts, please contact your Gallagher representative or click here to Contact Us via ajg.com.
Compliance is a series of checkpoints, not a final destination. As a trusted advisor, Gallagher has developed this Compliance Checkpoints series to help you pursue a path through employee benefits compliance issues as part of an overall compliance plan. Employers should carefully evaluate their health and welfare plans to determine if they are incompliance with both federal and state law. If you have any questions about one or more of the compliance destinations listed above, or would like additional information on how Gallagher constantly monitors laws and regulations impacting employee benefits in order to support employers in their compliance efforts, please contact your Gallagher representative.
The intent of this analysis is to provide you with general information. It does not necessarily fully address all your organization’s specific issues. It should not be construed as, nor is it intended to provide, legal advice. Questions regarding specific issues should be addressed by your organization’s general counsel or an attorney who specializes in this practice area.