Benefits Q&A: When Should Medical Child Support Be Made Effective?
Q: We have an employee who just started working for us in September 2020. Although he became eligible for benefits effective December 1, he waived coverage at that time. Around December 15th, we received a medical child support order instructing us to cover the employee’s young child on our group health plan. The order is dated back to early 2020, so it’s been in place for a while, but we were unaware of it until mid-December.
My question is whether we have to enroll the child in coverage effective December 1 (when the employee became eligible for our coverage), or can we delay the effective date to January 1, 2021 (since we didn’t receive the order until December 15th)? If we make the coverage retroactive to December 1, I fear we will have trouble getting the employee to pay for it.
A: Alternate recipients (i.e., children protected under a medical child support order) must generally be enrolled in the employer’s group health plan upon the next regular enrollment date after: the employer’s or plan administrator’s approval of the order as a Qualified Medical Child Support Order (or the date the order says coverage must commence, if later). If your plan follows the common practice of adding new participants on the first day of each month, then the “next regular enrollment date” would be the first day of the first month following the employer’s determination that the order is a QMCSO. Under these rules, you are not required to make coverage retroactive to before the date you received the order.
If the employee is eligible for the plan but is not enrolled, he may also need to be enrolled, unless you offer a dependent-only coverage option (which few employers do).
Note that if the employee had not yet satisfied the plan’s waiting period, enrollment would have been delayed until the employee had completed the waiting period.
One final note: My experience is that most employers don’t have written procedures for handling medical child support orders, which is required by law. If you haven’t adopted such procedures, try to do so as soon as possible. I have some sample policies and other materials available on request.