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National Medical Support Notice for an ICHRA


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ICHRAs are brand new to me so I'm curious how an employer would comply with a National Medical Support Notice for an employee eligible to participate in an ICHRA. It's my understanding that ICHRAs are considered group health plans subject to ERISA requiring them to comply with a QMCSO. Anyone have experience with this? 

Any insight is greatly appreciated. 

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If an individual-coverage health reimbursement arrangement’s only benefit is an amount of money the employer reimburses for the participant’s purchase of individual health insurance (and does not vary that amount following a number of dependents), an ICHRA group health plan’s administrator must respond and meet procedural requirements, but might find relatively little to do regarding the plan’s essential provisions.

An order can be a qualified medical child support order “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[.]” ERISA § 609(a)(4).

But a QMCSO might set up some duties regarding an individual health insurance contract’s issuer. That’s because a QMCSO may command beyond-the-plan provisions “to the extent necessary to meet the requirements of a law relating to medical child support described in section 1908 of the Social Security Act[.]” ERISA § 609(a)(4), 29 U.S.C. § 1169(a)(4).

ERISA § 609 [29 U.S.C. § 1169] https://uscode.house.gov/view.xhtml?req=(title:29%20section:1169%20edition:prelim)%20OR%20(granuleid:USC-prelim-title29-section1169)&f=treesort&edition=prelim&num=0&jumpTo=true.

29 C.F.R. § 2590.609-2 https://www.ecfr.gov/current/title-29/subtitle-B/chapter-XXV/subchapter-L/part-2590/subpart-A/section-2590.609-2.

Further, a National Medical Support Notice might set up some duties for an employer as an employer, rather than as a group health plan’s administrator. For example, an employer might have some duties to determine whether a needed amount can be withheld from the employee’s wages.

If Brian Gilmore sees your post, you might get more help.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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Agreed.  As long as the ICHRA covers the premium for children (very likely) it should be subject to the QMCSO/NSMN requirements in the same manner as any other group health plan.  

What makes the ICHRA interesting in this scenario is that by definition there are no employee contributions to an HRA.  So the NSMN should basically just require that the child have access to the employer reimbursement level available for child premiums for the individual policy (and anything else covered by the ICHRA for children, such as cost-sharing).  Any amount not covered by the ICHRA for that individual policy premium will presumably be the child's (and therefore likely the custodial parent's) responsibility to cover.  That's a big shift from a traditional group health plan where the employee is required to pay the employee-share of the premium (up to the CCPA/state limits) for the child.

I have a feeling that OCSS will be quite confused by this scenario.  Given the limited ICHRA infusion into the mainstream still, they might not have much experience with ICHRAs.  It might need some back and forth with them to get everyone on the same page for how to handle.

 

 

Here's the cites confirming a QMCSO/NSMN can apply to any "group health plan," which includes an ICHRA.

ERISA §609:

(a) Group health plan coverage pursuant to medical child support orders.

(1) In general. Each group health plan shall provide benefits in accordance with the applicable requirements of any qualified medical child support order. A qualified medical child support order with respect to any participant or beneficiary shall be deemed to apply to each group health plan which has received such order, from which the participant or beneficiary is eligible to receive benefits, and with respect to which the requirements of paragraph (4) are met.

 

ERISA §607:

(1) Group health plan. The term “group health plan” means an employee welfare benefit plan providing medical care (as defined in section 213(d) of the Internal Revenue Code of 1986) to participants or beneficiaries directly or through insurance, reimbursement, or otherwise. Such term shall not include any plan substantially all of the coverage under which is for qualified long-term care services (as defined in section 7702B(c) of such Code). Such term shall not include any qualified small employer health reimbursement arrangement (as defined in section 9831(d)(2) of the Internal Revenue Code of 1986).

 

DOL QMCSO/NSMN Guide:

https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/qualified-medical-child-support-orders.pdf

1 As used in this booklet, the term “group health plan” refers to that term as defined in section 607(1) of ERISA and means generally any welfare plan established or maintained by an employer or employee organization (or both) that provides medical care to employees or their dependents directly or through insurance, reimbursement, or otherwise.

Q1-1: What types of plans are subject to the QMCSO provisions?

The QMCSO provisions apply to “group health plans” subject to the Employee Retirement Income Security Act of 1974 (ERISA). For this purpose, a “group health plan” generally is a plan that both:

  • Is sponsored by an employer or employee organization (or both) and provides “medical care” to employees, former employees, or their families.
  • “Medical care” means amounts paid for the diagnosis, cure, mitigation, treatment or prevention of a disease; for the purpose of affecting any structure or function of the body; transportation primarily for or essential to such care or services; or for insurance covering such care or services.
  • ERISA does not generally apply to plans maintained by: Federal, state or local governments; churches; and employers solely for purposes of complying with applicable workers compensation or disability laws. However, provisions of the Child Support Performance and Incentive Act (CSPIA) of 1998 require church plans to comply with QMCSOs and National Medical Support Notices, and state and local government plans to comply with National Medical Support Notices.

[ERISA §§ 4(b), 609(a) and 607(1), Internal Revenue Code § 213(d), CSPIA § 401(f)]

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Brian Gilmore, thanks.

Am I right in guessing that a child-support order regarding an ERISA-governed ICHRA plan could not order the employer to pay any more reimbursement than the plan specifies (for example, an amount enough to make a self-only silver contract affordable for the employer to escape the play-or-pay excise tax)?

Do you think a National Medical Support Notice could order an employer to deduct from its employee’s wages—and pay over to the employee’s individual health insurance issuer—the incremental amount needed to turn a self-only contract into a self-plus-alternate-recipient contract?

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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Yeah I agree with that.  As you noted, a QMCSO/NMSN can't require the plan to provide a benefit it doesn't otherwise provide.  

I don't think a QMCSO/NSMN can require the employee to make a payroll salary reduction contribution of any amount toward the underlying individual policy.  That individual policy is not an ERISA group health plan so it's not subject to these rules.  The ICHRA rules have a whole section spelling that out.  And since the ICHRA itself cannot have employee contributions (as with any HRA), I don't see any employee skin in the game here.  That's what makes this so interesting/different from a standard GHP situation.

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In those circumstances and if there is no order that commands an employer to garnish or otherwise alienate an obligor’s wages, what the alternate recipient might get is a child-support order that commands only the parent obligated to pay for the alternate recipient’s health coverage.

Peter Gulia PC

Fiduciary Guidance Counsel

Philadelphia, Pennsylvania

215-732-1552

Peter@FiduciaryGuidanceCounsel.com

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