Federal National Medical Support Notice (NMSN) Updated

The federal government has updated the National Medical Support Notice (NMSN), instructions, and employer FAQs.  State agencies and courts use this form when an employee is obligated by a child support order to enroll his/her child(ren) in the employer’s health plan if:

• the employee and dependents are eligible (e.g., not in a waiting period, not part-time ineligible, etc.), and
• the cost is within state-defined limits (usually the employee must still be able to receive a minimum wage) after a state-defined order of priority (for example, withholding for child support might come before withholding insurance premiums).

The NMSN is equivalent to a Qualified Medical Child Support Order (QMCSO) under ERISA and should be treated the same.  Rules do vary by state, however, on determining order of priority and cost limits, so multi-state employers will want to become familiar with the rules of each state in which employees reside.

The NMSN or QMCSO, along with the employer’s response to the state agency or court and directive to the insurance company or TPA to start child coverage, are confidential documents not to be shared with the employee.  For example, the documents contain the address of the custodial parent which could violate the other parent’s privacy if shared.

As a reminder, employers may not retaliate against employees subject to such orders.

The NMSN or QMCSO can also be used to direct the employer to remove the child(ren) from coverage.  In those cases, the employer should not share the order with the employee; rather, inquire with the employee on whether they want the named child(ren) removed from coverage or to remain enrolled.  If the employee chooses to have the child(ren) removed from coverage, the notice only authorizes removing the named children. In other words, this does not create a qualifying event that allows the employee to drop their own coverage, even if the only reason for their enrollment was to comply with the NMSN or QMCSO.

Employers of any size, whether their health plan is fully insured or self-funded, should have NMSN/QMCSO procedures that help ensure they respond within the 20-day deadline.  The NMSN includes two parts as follows:

• Part A: Notice to Withhold for Health Care Coverage
  • This portion of the NMSN requires the employer to respond to the issuer of the notice within 20 days to indicate compliance with the order or indicate why enrollment isn’t possible.
    • Section 1 provides several reasons for the employer to explain enrollment isn’t possible
    • Section 2 provides more reasons why the employee may not yet be eligible to enroll (waiting period longer than 90 days, such as for someone subject to a measurement period under the lookback method; or employee is on a leave of absence, in which case the employer also notates the anticipated return to work date)
    • Section 3 indicates to the court or state agency that the employer has provided Part B to the plan administrator within 20 days
  • Supplemental instructions for employers are provided, along with a sample Part A with numbers in each form field linking to the relevant step in the supplemental instructions
• Part B: Medical Support Notice to the Plan Administrator
  • When an employer determines the order can be satisfied, the employer must provide Part B of the NMSN within 20 days to the plan administrator (such as the insurance company or TPA)
  • The plan administrator then has 20 days to get the child(ren) enrolled in the correct plan and notify the employer of the plan selected
    • The plan administrator can enroll the child(ren) in the plan the employee is already enrolled in, or can notify the court or state agency about a cheaper plan option if there are concerns about cost, and the court/agency will respond within 20 days to indicate whether to make a plan change
    • The employee would not be allowed to override the court/agency’s decision if forced to move from their current plan to a lower costing plan
  • The plan administrator must also inform the employer of the new coverage so the employer knows how much to deduct from paychecks
  • The plan administrator must also inform the employee and the custodial parent of the new coverage (keeping in mind the NMSN or QMCSO is a confidential document not to be shared with the employee)

These medical support orders may not be frequent, but when they arrive, the speedy response deadline may lead to accidental oversights such as ensuring the notice isn’t shared with the employee.  Employers are required to have a set of procedures on file which would need to be followed upon receipt of a medical child support order.

To request a sample set of procedures, please contact your broker representative.

IMA will continue to monitor regulator guidance and offer meaningful, practical, timely information. This material should not be considered as a substitute for legal, tax and/or actuarial advice. Contact the appropriate professional counsel for such matters. These materials are not exhaustive and are subject to possible changes in applicable laws, rules, and regulations and their interpretations.