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Medical Support Order Questions


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We received a Medical Support Order in the form found on the HHS website:  https://www.acf.hhs.gov/css/form/national-medical-support-notice-forms-instructions

  1. The form seems a bit lacking to me.  The rules for QMSOs require the Order to include, among other things, (1) a reasonable description of the type of coverage to be provided, and (2) the period to which such order applies.  This Order doesn't seem to do either -- they checked the box for "medical" coverage, but we have several options, and I don't see a place to put down the period of coverage anywhere.  That said, it is a model document from the Federal government, so has it already been deemed sufficient?
  2. Since we have several medical options, do we just contact the participant and tell him he has to pick an option that provides for dependent coverage?
  3. If the participant signs up, and he is married, can he also sign up his spouse?  I would think this counts as an open enrollment window for him and the dependent, but not for the spouse.
  4. If the participant is on his spouse's insurance, can he just add the dependent there rather than having to enter our plan (I assume this would require a different QMSO relating to the spouse's plan)?

 

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1. Yes, NMSNs are an automatically qualifying standardized form of QMCSO.  

2. If the employee is not currently enrolled and there are multiple plan options available, the employer will complete Response 3 to notify the issuing agency of those available plan options, and which option the employee and child(ren) will be enrolled in by default if the issuing agency does not respond within 20 business days selecting a specific plan option.  It generally makes sense to rely on the lowest-cost plan as the default coverage for these purposes because the employee will be required to pay the employee-share of the premium for such coverage.

3. The Section 125 permitted election change event that applies here (Treas. Reg. §1.125-4(d)) addresses only enrollment of child(ren) subject to the order.  I'm not seeing any basis for enrollment of the spouse.

4. If the employee is not already enrolled, DOL guidance and the NMSN instructions confirm that the NMSN will require the employer to enroll both the employee and the child(ren) to provide coverage.

Lots more details here if you're interested: https://www.theabdteam.com/blog/employer-responsibilities-upon-receipt-of-a-nmsn/

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Brian Gilmore, thank you for your always helpful information.

Is specifying which health-coverage alternative is the default when the plan’s administrator does not receive an affirmative choice a settlor (non-fiduciary) decision? If so, does anything beyond applicable wage-withholding constraints preclude a sponsor from specifying a default most advantageous to the employer?

Even when choosing a default is a fiduciary’s decision, might a fiduciary loyally and prudently choose as the default (subject to applicable wage-withholding constraints) the health-coverage alternative for which QMCSO adverse selection or experience does the least harm to the plan?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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