ERISA requires that group health plans comply with qualified medical child support orders (QMSCO). A QMCSO is a court order issued by a state administrative agency requiring an alternate beneficiary or recipient, i.e., a child or stepchild, to be covered by an employee’s group health plan. QMSCOs typically result from instances of divorce and require that employee to maintain coverage for a dependent that may include medical, dental, and vision coverage as well as various types of spending accounts that may be offered. The QMSCO will outline the dependent coverage required to be continued by the employee.
When a QMSCO is received, an employer is responsible for ensuring that the terms of the order are met. As such, there are a series of actions employers must take to ensure that they maintain compliance with the ERISA regulations. These notable actions include:
- Ensuring that the summary plan description (SPD) includes information about the plan’s QMCSO procedures or a shorter statement indicating where a copy of the QMSCO procedures can be found and obtained;
- Providing immediate notification to the employee and the named alternate beneficiary informing them of receipt of the court order and the plan’s procedures; and
- Providing notice to the employee and named alternate beneficiary once the plan determines whether the order is a QMCSO.
Employers must determine if legal documents received meet QMSCO specifications as mandated under ERISA and the Department of Labor (DOL). For example, the order should contain the names and addresses of the employee and alternate beneficiary and provide a reasonable description of the required coverage along with the period of time to which the order applies. If these items are not included employers are not required to adhere to QMSCO regulations.
Once an employer determines that the document received is a QMSCO they must comply with the order by adding the alternate beneficiary to the coverage stipulated in the order, as long as the employer offers the coverage. If the employee is not enrolled in the noted coverage, then the employer must automatically enroll the employee and the alternate recipient. Once an employee and/or recipient has been enrolled in coverage, that coverage may only be terminated if:
- The date of the QMSCO termination has been reached and coverage is no longer required.
- The employee is no longer eligible for coverage due to termination or reduction of hours, and/or
- The alternate beneficiary has become ineligible, such as aging off the plan.
Contact your Cowden representative for more information on this or other compliance issues.