Federal regulations require Child Support Services (CSS) to seek medical support as a part of all child support orders and when appropriate to exchange this medical insurance coverage information with the Division of North Carolina Medicaid. The regulations require CSS to pursue health insurance for a child in any case where the custodial parent and child have no satisfactory coverage available other than Medicaid. Satisfactory coverage includes situations where the custodial parent has insured the child under North Carolina's Health Choice plan. The availability of medical insurance coverage services must be explained to the custodial parent in non-public assistance cases at the time of application.
National Medical Support Notice
On Aug. 1, 2002, North Carolina began using the National Medical Support Notice (NMSN), a standardized federal form that CSS agencies in all states are required to use. This form was developed with input from employer groups and health plan administrators. The NMSN complies with section 609 (a)(3) and (4) of ERISA, which pertains to informational requirements and restrictions against requiring new types or forms of benefits.
When the court orders noncustodial parents (NCPs) to provide employment-related health care coverage for their dependent child(ren), the NMSN is used to provide a means of communication between CSS agencies, employers and group health plan administrators regarding the NCP’s medical support obligations.
Note: This notice is not used when the court has ordered non-employment-based health insurance coverage or when the parties have stipulated to non-employment-based health insurance coverage.
The NMSN must be served on the NCP's employer:
- Within five business days after an initial order has been entered;
- Within two business days of the NCP being added to the N.C. New Hire Directory; or
- As soon as CSS caseworkers become aware that the NCP has changed employment.
The NMSN is divided into two parts and includes four different documents with detailed instructions.
Part A consists of:
- Notice to Withhold for Health Care Coverage - The local CSS agency completes this document and sends it to the employer with the rest of the packet.
- Employer Response - If unable to enroll the child(ren) employers complete and return this document to the local CSS agency.
Part B consists of:
- Medical Support Notice to Plan Administrator - Employers send this document to notify the health plan administrator of the obligation to provide health care coverage.
- Plan Administrator Response - Plan administrators complete and return this document to notify the local CSS agency of the action taken.
After receiving the NMSN, employers are required to transfer Part B to the health insurer or health care plan administrator within 20 business days, unless:
- The employer does not provide dependent or family health insurance for employees;
- The employee is not eligible for the health care coverage that the employer provides;
- The employee no longer works for the employer.
If employers are not required to transfer the notice due to one of these reasons, they must notify the local CSS agency in writing within 20 business days after the date of the notice. If none of these reasons apply, employers forward the notice to the health insurer or plan administrator.
The plan administrator notifies employers when enrollment has been completed and what the dependent coverage will cost. Employers must then notify their payroll office/service to deduct the amount that is required by the health plan from the employee’s wages and transfer it directly to the insurer or plan administrator. If an employee contests the withholding, employers must initiate and continue the withholding until they receive notice that the contested case is resolved.
At this point employers could determine that the deductions for child support and health insurance premiums exceed the maximum percentage allowed under the Consumer Credit Protection Act (CCPA) and any applicable state law. (In North Carolina, this is 65 percent.)
Employers must look to the law in the state where the employee is employed to determine the priority for payment. If CCPA limits prevent the payment of both ongoing current support and health insurance premiums and payment of health insurance premiums does not have first priority, employers must notify the issuing CSS agency by completing and sending the Employer Response form to the agency.
If the insurer or plan administrator notifies the employer of a waiting period for the enrollment of an employee, the employer must notify the plan administrator when the employee becomes eligible for enrollment in the health care plan.
If the plan administrator informs the employer that the NMSN does not meet their requirements for a qualified medical child support order, the employer must notify the local CSS agency in writing.
Employers that are obligated to provide health benefit plan coverage must inform the local CSS agency in writing within 10 business days of an employee’s termination of employment. Employers must include the NCP's last known address and the name and address of the new employer, if known. An employer cannot fire, refuse to employ, or take disciplinary action against an employee solely because of the withholding.
If a court finds that an employer has failed to comply with these provisions, that employer is liable as a payor and liable in a civil action for reasonable damages.
Plan Administrator Responsibilities
The plan administrator must complete the Plan Administrator Response section of Part B and return it to the local CSS agency within 40 business days after the date on the National Medical Support Notice. Plan administrators can include the following information:
- Whether the criteria are present for the notice to be determined a qualified medical child support order;
- Whether the notice is determined not to be a qualified medical support child order, and the reasons it is determined not to be one;
- Whether the NCP's child(ren) are enrolled and under what type of health insurance coverage;
- When the effective date of the coverage is; and
- Whether more than one health care option is available under the health plan.
If more than one health care option is available under the health plan, the insurer or health plan administrator notifies the local CSS agency. The responsible CSS caseworker must consult with the custodial parent, select an option, and inform the plan administrator of the option selected within 20 calendar days from the date when the plan administrator notified the local CSS agency.
If the notice is determined to be a qualified medical child support order, the plan administrator enrolls the child(ren), determines the cost of the coverage, and notifies the employer of the amount to be withheld.
The plan administrator notifies the local CSS agency, employer, NCP and custodial parent of any enrollment waiting periods for the employee. After the waiting period has ended, the plan administrator must enroll the child(ren).
If either the employer, the health insurer or plan administrator does not comply with these provisions, they can be held liable for a civil penalty and are subject to a civil suit for reasonable damages.
Termination of Medical Insurance
When an NCP is no longer under order to provide medical insurance for the child(ren), the CSS agency enforcing the medical obligation must notify the employer(s) of the end of the medical obligation within 10 business days.
Verifying Continued Insurance Coverage
CSS sends an Employer Letter to Verify Continued Insurance Coverage semi-annually to the NCP’s identified employers to confirm whether or not coverage is still available.