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QMSCO and stepchildren

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Our self-insured plan covers stepchildren. One of our employees is getting a divorce and wanted to know if his former stepchildren could continue to be covered since the plan allows for coverage of an ex-spouse. If we were to receive a QMSCO must those children be covered?

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Step children do not appear to be within the parameter of child or alternate recipient, ERISA § 609(a)(2)© and (D), but see O'Neil v. Wal-Mart Corp., N.D.N.Y., No. 8:05-CV-1572, 8/22/07, before you make a decision on this issue.

John Simmons


Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

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  • 2 months later...
Guest Mr. Kite

This will, of course, depend on the plan language. Does the plan cover an ex-spouse as a "dependent" of the employee, or is the ex-spouse covered under COBRA?

As to whether the employee's stepchild continues to be a "dependent" under the health plan tax rules, Rev. Rul. 71-72 and 1.152-2(d) indicate that the step relationship does not end if the parent and stepparent divorce. This means that the stepchild will continue to be considered the employee's "child," but the other requirements for dependent status must be met. Assuming the employee ceases to reside with or support the stepchild, the divorced parent rule of 152(e) must apply -- and I don't know how, or whether, that rule applies in this situation.

With respect to the QMSCO -- ERISA 609(a)(2)(D) states that the term "child" INCLUDES any child adopted by, or placed for adoption with, a plan participant, so the term does not exclude a stepchild. Also, ERISA 609(a)(2)© looks to state domestic relations law for the determination of whether the subject of the QMSCO is a "child" -- thus, in O'Neil, the NY judge issued an order under NY law that provide for child support awards to stepchildren.

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  • 2 years later...
Guest Benny Comply

I am a plan sponsor with a similar question regarding coverage of stepchildren.

Employee enrolled newborn child as his dependent in 2010. Employee recently found out child is not his natural child. Employee is divorcing wife (child's mom) and wants to immediately drop coverage for the child.

Child is still eligible for coverage, since Plan's definition of child includes stepchildren (regardless of residence and support).

Employee resides in IN which recognizes legal separation; so this is a PECE and COBRA QE for the spouse and I had assumed also for the now stepchild. But the comments above lead me to question that conclusion.

Does the stepchild relationship not end with the parents' divorce?

Any thoughts?

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