HEALTH INSURANCE AND CASH MEDICAL SUPPORT OVERVIEW

Amy Newton: The Oklahoma Employer Services Center and Oklahoma Child Support Services bring you this video to explain and discuss health insurance  and cash medical support as it relates to child support.  

Rory Littleton: An important part of the child support program is making sure that children receive health care.  Oklahoma Child Support Services (OCSS) includes a provision for medical support in all child support orders established.  

Amy Newton: A parent or custodian can be ordered to: 1) Provide health insurance or pay cash medical support when insurance is not available, or 2) pay for private health insurance premiums or reimburse the custodial person for all or a portion of these premiums, or 3) pay additional amount to cover ongoing medical bills or reimbursement for uninsured medical costs.  

Rory Littleton: When the court orders an individual to provide health insurance, the first option is for insurance to be provided through an employer or other group plan.  The second option is for a private plan or some other type of alternative coverage.  

Amy Newton: The third option is for the parent to pay a cash amount in lieu of enrolling the child in health insurance.  This option only occurs if insurance is not available to the parent at a reasonable cost.  However, the court does not consider cash medical support as an option for custodial parents or third parties.  The option specified by the court is listed in the court order.  The non-custodial parent must follow the order and may not choose a different option than what is specified in the order.  

Rory Littleton: Now let’s talk about the employer’s involvement.  Let’s answer this - How will the employer be notified?  Child Support Services is required to send you a National Medical Support Notice within two business days after the date of entry of an employee who is an obligor in a child support case in the state directory of New Hires.  This document may be the first contact you have with Child Support Services concerning your employee.  

Amy Newton: Additionally, you may receive a National Medical Support Notice for an employee who is the custodian of a child, if the child support order requires that person to provide health insurance for that child.  The National Medical Support Notice is a standardized form that all states use, and is considered a qualified medical child support order.  By law, employers and insurers must comply with the National Medical Support Notice.  

Rory Littleton: What makes an order qualified?  In order to be qualified, a medical support order must clearly specify the name and last known address of the participant and the name and zip code of each child covered by the order, a reasonable description of the coverage to be provided or the manner in which coverage will be determined, and the period for which the order applies.  

Amy Newton: State laws require that health care coverage be provided under a medical support order even if the child was born out of wedlock, is not claimed as a dependant for tax purposes, or does not reside with the parent or in the insurer’s service area.  

Rory Littleton: What are the parts of a notice?  The National Medical Support Notice consists of four documents.  Part A û the notice to withhold for health care coverage which is completed by the child support agency.  

Amy Newton: The Employer Response, which is completed by the employer and returned to the issuing child support agency.  

Rory Littleton: Part B includes the medical support notice to plan administration, which is sent by the employer to the insurance carrier if the employee qualifies.  

Amy Newton: And the Plan Administrator Response, which is complete by the insurance carrier and returned to the issuing child support agency.  

Rory Littleton: Next, let’s answer this - What do I do when I receive a National Medical Support Notice?  Please follow these steps when processing a National Medical Support Notice. First, determine whether any of the categories on the employer response form apply.  These categories are: Employee listed in Part A to withhold for health care coverage has never been employed by this employer ... 

Amy Newton: Our company does not maintain or contribute to plans providing dependant or family health care coverage ... 

Rory Littleton: This employee is not eligible for family health care coverage maintained by this company or to which our company contributes. For instance the employee is part-time or non-union. 

Amy Newton: This option does not apply for employees who are only temporarily ineligible as in a probation period ... 

Rory Littleton: The employee has terminated ... 

Amy Newton: Withholding limits prevent enrollment, in other words, the plan exceeds either the reasonable cost amount listed in the notice or the Federal Consumer Credit Protection Act limitations.  

Rory Littleton: If any of these conditions apply, the employee is excluded and you must return the Employer Response to the issuing agency within 20 days.  If not, forward Part B to your plan administrator to comply.  

Amy Newton: Here’s our next question - What does the employer do after the employee is enrolled?  When the plan administrator notifies you of enrollment, begin deductions for health insurance premiums.  If the plan administrator informs you in response to Part B of the National Medical Support Notice that the employee is subject to a waiting period for health insurance eligibility, for instance, a probationary period of employment, notify the plan administrator as soon as the employee is eligible.  The National Medical Support Notice must be honored without regard to any enrollment season restrictions.  

Rory Littleton: Are there limits on withholding?  The total amount withheld for both cash and medical support cannot exceed CCPA withholding limits.  

Amy Newton: How do you know what the limits are?  There is a range depending on the employee’s situation.  The first step is to calculate the disposable income.  

Start with the gross income and subtract mandatory deductions: such as federal, state, and local taxes, social security taxes, statutory pension contributions, and any other deductions required by law.  Voluntary deductions, such as loan payments, are not included.  This calculation will give you the disposable income.  

Rory Littleton: The next step is to review the employee’s circumstances.  If the employee supports more than 1 family and owes less than 12 weeks of back child support, the limitation is 50%.  If the employee supports more than 1 family and owes more than 12 weeks of back child support, the limitation is 55%.  If the employee supports 1 family and owes less than 12 weeks of back child support, the limitation is 60%.  If the employee supports 1 family and owes more than 12 weeks back child support, the limitation is 65%.  The third step is to multiply the amount of disposable income by the withholding limit percentage.  This is the maximum amount that can be withheld from the employee’s pay.  

Amy Newton: The fourth step is to add up the amount of child support from the Income Withholding Order and the cost of the children’s portion of the health insurance coverage or cash medical support.  If this amount is more than the maximum amount that can be withheld, mark number five on the employer response.   The payment of the current child support takes priority over enrollment in health insurance coverage.  

Rory Littleton: What are ôreasonable cost limitsö?  In some court orders, the court has specified a maximum amount the employee can be required to spend for enrolling the child in health insurance coverage.  This amount is listed in the Limitation on Withholdings section.  

Amy Newton: If the children’s cost for insurance enrollment exceeds the reasonable cost amount, mark number five on the employer response.  Do not include the cost of enrolling adults when reviewing the reasonable cost limit.  

Rory Littleton: Here’s an important note û a National Medical Support Notice is considered a qualifying event and is not subject to insurance enrollment windows.  

Amy Newton: Is the employer required to contact the custodial parent?  The insurance plan administrator is required to provide the custodial person with information about the child’s coverage.  This information must be mailed to the custodial person’s mailing address on Part A of the National Medical Support Notice.  If an address is not provided, the information should be sent to the issuing child support agency.  In Oklahoma, the appropriate address for health coverage information is: Oklahoma Employer Services Center, P.O. Box 248805, Oklahoma City, OK 73124-8805.  

Rory Littleton: What happens if the employer does not comply?  

The employer and/or insurer may be fined up to $200 per month per child for failure to follow the requirements of the National Medical Support Notice.  

Amy Newton: What is the employer’s involvement in cash medical payments?  Oklahoma courts can order a non-custodial parent to pay cash medical support in lieu of insurance.  This occurs when there is no insurance available to the parent at the time of the court hearing.  

Rory Littleton: However, if insurance does become available, the children must be enrolled and then the cash medical support will end.  Cash medical support is used toward medical costs or to defray the cost of Medicaid if the child is receiving Medicaid.  

Amy Newton: Employers are notified that cash medical support needs to be collected when the amount is listed on the income withholding order.  

The amount is set by the court and can only be changed by the court.  

Rory Littleton: For more information, view our other videos at OKESC.org. 

Amy Newton: Or please contact one of our Employer Services Representatives toll-free at 1-866-553-2368 Monday through Friday, 8 am to 5 pm.  

Rory Littleton: Let us know how we can help you.