WFTRA Definition of "Dependent" versus QMCSO(Which one wins?)

[mal]

The Working Families Tax Relief Act changed the definition of eligible dependent and added a residency and financial support test. I sure this question has been

addressed before, but con someone tell me how a health plan is to treat

a QMSCO when the child does not satisfy the WFTRA definition?

The plan in question was amended to include the updated definition of dependent. A family member of the child provided the plan with a QMSCO requiring it to extend coverage for the minor. The problem is that the child lives outside the home of the divorced parents and is wholly dependent upon a relative for support. Absent the QMSCO, this child would not be eligible for coverage under the plan.

Thanks.

[QDROphile]

One purpose of section 609 was to provide for coverage of children of noncustodial parents. I would not advise a plan administrator to refuse to qualify an order on the basis of section 609(a)(4) unless we have some other authority supporting the refusal. I cannot think of any basis for refusal other than 609(a)(4). Although WFTRA may have changed tax consequences, and plan may have realigned with the amended tax provisions, section 609 appears to be indifferent to tax consequences.

If you stand on section 609(a)(4), you need to take into account the state law that may provide an exception.

[Kirk Maldonado]

I want to first state that I'm no expert on QMCSOs; I've only worked on a few of them. Accordingly, my views are based on minimal experience and education.

With that caveat, I think that I disagree with QDROphile, assuming that I have interpreted the message by mal. I interpret mal's message as saying that if the person doesn't meet the new definition of dependent, that person isn't eligible for coverage under the plan.

Section 609(a)(4) of ERISA states:

A medical child support order meets the requirements of this paragraph only if such order does not require a plan to provide any type or form of benefit, or any option, not otherwise provided under the plan

Thus, because the plan's definition of dependent doesn't cover individual in that particular situation, the QMCSO cannot require the plan to cover that individual. Stated in a different fashion, the QMCSO cannot amend the eligibility rules of the plan, it can only force a recalcitrant parent to enroll a dependent who otherwise satisfies the plan's eligibility conditions.

Accordingly, this isn't just a "tax issue."