Qualified Medical Child Support Orders
Group health plans that are subject to ERISA must provide benefits in accordance with the applicable requirements of a qualified medical child support order (QMCSO). A QMCSO is a judgment, decree, or order issued by a court or through a state administrative process which requires a health plan to provide coverage to a participant's child or alternate recipient. The definition of "group health plan" for purposes of ERISA's QMCSO requirements is "an employee welfare benefit plan providing medical care to participants or beneficiaries directly or through insurance, reimbursement, or otherwise.
An individual entitled to coverage under a QMCSO is called an "alternate recipient". This term applies to any child of a participant who is recognized under a QMSCO as having a right to enrollment under a group health plan. They cannot be held to any requirements not imposed on other covered children. ERISA's QMCSO provisions do not define the term "child" other than to specify that it includes "any child adopted by or placed for adoption with a participant of a group health plan." Now that healthcare reform has expanded dependent coverage to age 26 regardless of residency and tax dependent status, plans cannot condition enrollment of children under QMSCOs on these criteria.
Requirements of a QMSCO
A QMSCO cannot require a group health plan to provide any type of benefit, form of benefit, or benefit option if they are not otherwise provided under the plan. A QMSCO may, however, require a plan to enroll a child who is not otherwise eligible for coverage in certain situations and without regard to the plan's normal enrollment rules. If a dependent's coverage is contingent upon the employee being covered, then the plan must allow the employee to enroll.
In cases in which a parent is required by a QMSCO to provide health coverage for a child and the parent is eligible for family health coverage, the law requires insurers and employers —
- to permit such parent to enroll under family coverage a child who is otherwise eligible without regard to the plan's open season restrictions;
- to enroll the child upon application by the other parent or by the state, if a parent is enrolled but fails to apply for coverage for the child; and
- to not disenroll or eliminate coverage of the child unless the insurer/employer is satisfied that (1) the court or administrative order is no longer effective; (2) the child will be enrolled in comparable health coverage by the disenrollment date; and (3) in the case of an employer, the employer has eliminated all family health coverage for its employees
Under ERISA's QMCSO provisions, the order must contain the following information:
- the name and last-known mailing address of the participant;
- the name and last-known mailing address of each alternate recipient (the order may substitute the name and mailing address of a state official for the mailing address of any alternate recipient);
- a reasonable description of the type of coverage to be provided to the child (or the manner in which such type of coverage is to be determined); and
- the period to which the order applies.
When Coverage Does Not need to be Extended Under a QMSCO
Coverage does not need to be extended to child named in a QMSCO if:
- The employee is not eligible for coverage in any group health plan option; or
- The plan does not provide any dependent coverage.
Impact of Healthcare Reform on QMCSOs
Prior to healthcare reform, some plans excluded coverage for children for various factors, such as not living with the employee, a divorced employee not having primary custody, or the child not being a tax dependent of the employee. In order to be covered under a plan that had these types of eligibility exclusions in place, a QMCSO was needed.
Due to healthcare reform's dependent coverage mandate, many children who had once been the subject of a QMCSO are now likely to meet the eligibility requirements of a plan on their own without needing a QMCSO to obtain coverage. This is due to the fact that plans cannot condition a child's eligibility on factors such as residency, financial dependence, and custody, until the child attains age 26.
There are still instances in which a QMCSO will be necessary, such as in situations when coverage is available to dependents, but an employee refuses to pay for it or if a custodial parent has access to Exchange coverage that is less expensive than the non-custodial parent's employer sponsored plan.
The content described on this page is current as of 2018 and is not intended to be legal or tax advice and should not be construed as such. The intent is to provide information only. Meritain encourages plans to consult with their own legal counsel and tax experts for legal and tax advice.