HEALTH INSURANCE AND CASH MEDICAL FAQ

Isabell Estes: Oklahoma Employer Services Center and Oklahoma Child Support Services brings you this video to answer some frequently asked questions about health insurance and cash medical plans. 
 
Rory Littleton: Here’s our first question - When must a plan begin to provide coverage to the child or children on a National Medical Support Notice?  

Following a determination that an order is qualified, the child or children, and the employee, if not already enrolled, must be enrolled as of the earliest possible date following such determination.  

Isabell Estes: For example, if an insured plan only adds new participants or beneficiaries as of the first day of each month, such plan would be required to provide coverage to the ultimate recipient as of the first day of the first month following the determination that the order is qualified.  

Rory Littleton: State laws require that when a child is enrolled in a plan pursuant to a court, or an administrative order, that an enrollment be made without regard to "open season restriction."  

Isabell Estes: Here’s our next question - If a plan provides benefits solely through an HMO, or other managed care organization with a geographically limited benefit area, is the plan required to create and provide comparable benefits to the child or children who resides outside of the HMO's service area?  

The answer is no.  A medical child support order is not qualified if it requires a plan to provide a type or form of benefit that is not otherwise available under the plan.  Requiring a plan that provides benefits solely through a limited-area HMO to provide benefits to alternate recipients outside of the HMO’s service area (for example on a fee for service or any other basis) would be requiring the plan to provide a form of benefit that the plan does not ordinarily provide.  

Rory Littleton: On the other hand, if the child is able to come into the HMO service area for medical care, the plan would be required to provide benefits to the alternate recipient.  Also, many HMOs and other health insurance carriers have reciprocal agreements to provide coverage outside of their normal service areas.  If the child’s zip code on the National Medical Support Notice is more than 60 miles away from the service area of the provider, contact the Oklahoma Employer Services Center.  

Isabell Estes: If the child support agency address is the only address that existed on the form, contact the issuing agency to determine if the child is within the provider’s service area.  

Rory Littleton: Next - If a plan provides that dependants of participants must be enrolled in the same coverage and option as the participant, must an alternate recipient be enrolled in the same coverage and options in which the participant is enrolled?  

The answer is yes.  An alternate recipient under a National Medical Support Notice is treated as the beneficiary under the plan.  Accordingly, an alternate recipient is also treated as a dependant of the participant under the plan.  

Isabell Estes: However, if the National Medical Support Notice specifies that an alternate recipient is to receive a particular level of coverage or option that is available under the plan, but the participant is not enrolled in the particular coverage or has not selected the particular option, the plan may be required to change the participant’s enrollment to the extent necessary to provide the specified coverage to the alternate recipient.  

Rory Littleton: What is the plan’s obligation in the event the employer is unable to withhold from the participant’s paycheck the employee contributions necessary to provide coverage to the child?  

If federal or state withholding limitations prevent withholding from the participant’s paycheck, the additional contribution required to provide coverage to the child under the terms of the plan, the employer should notify the Child Support Services agency on the Employer Response Form.  

Isabell Estes: Unless the employer is able to withhold the necessary contribution from the participant’s paycheck, the plan is not required to extend coverage to the child.  The participant may voluntarily consent to the withholding of an amount otherwise in excess of the applicable withholding limitations.  

Rory Littleton: If the court has made a determination of what a reasonable cost amount of the insurance is for adding the child, you may see that amount listed on the National Medical Support Notice.  Child Support calculates this cost based upon the gross income of the parent and it is compared to the cost of the child in particular.  

Isabell Estes: What if the employee is not yet eligible to enroll because he or she has not satisfied the plan’s waiting period?  

A plan administrator may not find a medical child support order, including a notice, to be not qualified solely because the participant is subject to a waiting period, such as one requiring a certain number of months or hours worked.  Being subject to a waiting period may, however, affect the procedures necessary for enrollment of the named child, assuming a notice otherwise meets the requirements to be a qualified medical child support order.  

Rory Littleton: For short waiting periods (90 days or less remaining at the time of the plan administrator’s receipt of Part B) the plan administrator qualifies the notice and waits until the expiration of the necessary time to enroll the child and notify the employer of the need, if any, to withhold from the employee’s wages to provide such coverage.  

Isabell Estes: For long waiting periods (greater than 90 days remaining at the time of the plan administrator’s receipt of Part B) or the period is measured by other means, such as hours worked, the plan administrator should inform the employer of the waiting period and wait for notification from the employer of the employee’s satisfaction of the waiting period.  

Rory Littleton: Here’s our next question - How does a qualified medical child support order affect Section 125 plans?  

The Department of Labor has interpreted the Treasury regulations to permit a Section 125 cafeteria plan to change an employee’s election to cover a dependant child if a medical child support order requires the employee to provide coverage for that child.  In addition, the Section 125 rules allow a participant to cancel coverage for a dependant child if a medical child support order requires another individual to provide coverage for that child.  

Isabell Estes: How does HIPAA affect the National Medical Support Notice?  

The Health Insurance Portability and Accountability Act (HIPAA) restrictions have no impact on the employer’s obligation to enroll minor children of the employee and to report the information requested on the National Medical Support Notice and the insurance survey.  This information is not defined as protected health information.  Even if this information were to be construed as protected health information, a covered entity may disclose protected health information to the extent that disclosure is required by law or to an agency performing a government regulatory program. 

Rory Littleton: Next - How does an employer comply with a National Medical Support Notice (NMSN) whenever an employee does seasonal work?  

If the employee earns enough wages to cover the medical insurance for the duration of the seasonal work, the coverage should be added per the National Medical Support Notice.  

Isabell Estes: Is it reasonable and necessary for an employer to enroll and disenroll again and again when the employee works seasonally or is temporary?  

If an employee’s employment status, sporadic work hours, etc., causes them not to continuously earn enough wages for the medical coverage to be consistent, employers are not required to enroll and disenroll the employee, or his or her obligated children.  Employers must notify OKESC/OCSS that the situation would exceed the federal withholding limits.  

Rory Littleton: What are the options for an employee when he or she is in the hiring bracket?  

Once OKESC/OCSS is notified of the situation, the information is turned over to the local child support office.  The office may choose to modify the order or how the employee obtained adequate private coverage.  Oklahoma law allows court orders to contain a provision for cash medical support.  Cash medical support requires the employee to pay cash amount in lieu of providing health insurance.  

Isabell Estes: Now let’s answer this question - What options does the employee have if he or she has to take out insurance but the company insurance is too costly?  

Once OKESC/OCSS is notified of the situation, the information is turned over to the local child support office.  The office may choose to modify the order or have the employee obtain adequate private coverage.  Oklahoma law allows court orders to contain a provision for cash medical support.  Cash medical support requires the employee to pay a cash amount in lieu of providing health insurance.  

Rory Littleton: Next - What should I do if an employee tells me they have private medical coverage?  

Employers are required to honor the NMSN regardless of whether or not the employee states he or she has private coverage.  The employee should be directed to contact OCSS Care Call Center at 405-522-2273 in the Oklahoma City area, or 1-800-522-2922 state-wide.  If OCSS determines the private coverage is adequate, they will send a termination of the NMSN to the employer to discontinue the medical coverage.  

Isabell Estes: Here’s our next question - My employee says that the cost of the insurance is not supposed to be more than 5% of his or her income. Am I supposed to calculate this amount?  

The answer is no.  The calculations are made by the court when the order is entered.  The employer may not have access to all of the information about an individual’s income.  He or she could have multiple sources of income the court must consider.  

Rory Littleton: If the child’s address is not provided on the national medical support notice, how can I determine if the insurance is accessible for the child?  

Contact the Oklahoma Employer Services Center to provide the information about the service area of the provider.  The OKESC will indicate whether the child is within that service area.  

Isabell Estes: Here’s our next question - How do I know if the insurance provider is accessible to a child?  

The National Medical Support Notice provides the address of the custodial person and/or child.  If the child is within 60 miles, one way, of the provider, the insurance is considered accessible in most cases.  

Rory Littleton: Next up - I received a National Medical Support Notice but my employee is the custodial person.  Do I need to enroll the child?  

Yes.  There are some court orders that require the custodian to provide insurance for the child.  A National Medical Support Notice is sent to the employer of the custodian when the court order requires that person to provide the insurance.  

Isabell Estes: My employee says that the child is on SoonerCare and does not need to be enrolled in insurance.  Is this correct?  

The answer is no.  You must comply with the National Medical Support Notice and enroll the child.  

Rory Littleton: Our company only offers Insure Oklahoma (OEPIC).  What should we do since we cannot enroll the child in insurance?  

The employer should respond to the National Medical Support Notice, and mark the appropriate response option in Part B.  

Isabell Estes: A company offers both Insure Oklahoma (OEPIC) and major medical insurance for our employees.  The employee has chosen to enroll in Insure Oklahoma.  What should we do when we receive a National Medical Support Notice?  

The employee must enroll the child in the major medical insurance.  

Rory Littleton: Here’s our next question - Now that the child has been enrolled in insurance, when do I stop withholding the cash medical support from my employee’s paycheck?  

OCSS will send an amended income withholding order to let you know the appropriate amount to withhold.  Since the termination of cash medical support must be confirmed by a court, the cash medical support cannot be stopped automatically.  Be sure to notify OCSS and the insurance recipient that enrollment has occurred.  The longer you wait, the more your employee will pay in cash medical support.  

Isabell Estes: My employee is now eligible for insurance, but wants to continue paying cash medical support instead. Can we do that?  

The answer is no, you cannot.  If the court order specifies the employee must enroll the child when insurance is available, he or she cannot choose to not enroll the child.  

Rory Littleton: I received an income withholding order with cash medical support and the child is already enrolled in insurance.  What should I do?  

It is possible for the court order to have both a cash medical support amount and a child to be enrolled in insurance.  This cash medical support could actually be for a fixed recurring payment for items such as orthodontia or asthma treatments.  Contact the Oklahoma Employer Service Center if you have any questions about the amounts.  

Isabell Estes: Here’s our next question - I know that when the income withholding order is received, there is a limitation on how much income can be withheld from my employee’s paycheck.  Does this also apply to the cost of the insurance and the cash medical support?  

Yes.  When determining whether the cost of the insurance and the income withholding are reasonable, the Consumer Credit Protection Act limits do apply.  

Rory Littleton: These limits are: 1) If the employee supports more than 1 family and is less than 12 weeks in arrears, no more than 50% of the employee’s disposable income can be withheld. 2) If the employee supports more than 1 family and is more than 12 weeks in arrears, no more than 55% of the employee’s disposable income can be withheld. 3) If the employee supports 1 family and is less than 12 weeks in arrears, no more then 60% of the employee’s disposable income can be withheld. 4) If the employee supports 1 family and is more than 12 weeks in arrears, no more than 65% of the employee’s disposable income can be withheld.  

We hope your questions have been answered, but if you need more assistance, please call one of our Employer Services Representatives toll-free at 1-866-553-2368, Monday through Friday, 8 am to 5 pm. 

Isabell Estes: Or visit our website okesc.org.  Let us know how we can help you.