An employer may occasionally receive a National Medical Support Notice (NMSN). If this ever happens to your organization, here’s what you should know.
What is it?
An NMSN is a medical child support order used by a state child support enforcement agency to obtain employer-provided group health coverage for a child. If appropriately completed, an NMSN is deemed to be a qualified medical child support order (QMCSO), and benefits must be provided in accordance with its terms.
NMSNs follow a standard format consisting of two parts: Part A, the “Notice to Withhold for Health Care Coverage,” is directed to you, the employer, while Part B, the “Medical Support Notice to Plan Administrator,” directs the plan administrator to enroll the child in specified plans.
What should you do?
Within 20 business days after the date of the NMSN (sooner if reasonable), you must provide certain information to the issuing agency or the plan administrator. To satisfy this requirement, first determine whether one of the following applies:
• Your organization doesn’t maintain (or contribute to) a plan providing dependent coverage.
• The employee named in the NMSN is among a class of employees (for example, part-time) that’s ineligible for dependent coverage.
• The employee’s wages aren’t high enough to cover the cost of dependent coverage.
• The named individual isn’t an employee of your organization.
If one or more of those conditions apply, you must specify the applicable condition on Part A and return it to the issuing agency within the 20-day period. In such cases, you won’t need to take any further action. Otherwise, you need to, within the 20-day period, send Part B to the plan administrator of each group health plan for which the child may be eligible for enrollment.
What will your plan administrator do?
A plan administrator that receives an NMSN must, within 40 business days after the date of the NMSN (sooner, if reasonable):
• Review it,
• Determine whether it’s appropriately completed, and
• Notify the issuing agency of its determination on Part B.
If the plan administrator determines the NMSN was improperly completed, the plan administrator must indicate why the NMSN is deficient and notify the employee, custodial parent and alternate recipient of the deficiencies.
If the NMSN was properly completed, the plan administrator must treat it as a QMCSO and indicate when the child’s plan coverage will begin. The plan administrator must also inform you that enrollment is proceeding pursuant to the NMSN and provide information that will enable you to determine whether the contributions for the coverage can be withheld from the employee’s wages.
Are there any other potential compliance issues?
Yes. For instance, if federal or state consumer credit-protection limits would prevent you from withholding the necessary contributions, you must notify the issuing agency. Also, an NMSN may cover a child of a terminated employee, even if the employee has elected self-only COBRA coverage. And, finally, special HIPAA privacy considerations may apply.
For more information on the above article or other employee benefits questions, please contact Murry Guy, CPA at (334) 887-7022 or by leaving us a message below.
