Question: I received a National Medical Support Notice for one of my employees. What is this and what do I do?
Answer: The National Medical Support Notice (“NMSN”) serves as legal notice that the employee identified in the notice is required to provide health care coverage for the child identified in the notice as part of a child support order. An NMSN may come from a California child support agency or from an agency in another state.
An employer receiving an NMSN must complete and return Part A (Notice to Withhold for Healthcare Coverage) within 20 business days from the date of receipt. If the employer determines the employee is eligible for group health insurance benefits, the employer retains Part A and forwards Part B (Medical Support Notice) to the health plan administrator. If the employee’s health care benefits are administered through another organization, including a labor union, the employer must forward Part B of the notice to the labor union or other organization acting as the plan administrator for completion. Thereafter, the plan administrator has 40 business days to enroll the employee’s child, and complete and return Part B of the NMSN to the issuing agency.
Once the child is enrolled in the health insurance plan, the plan administrator must send information about the health care coverage to the issuing agency. If the employee has already enrolled the child in health care coverage, the employer must forward Part B to the plan administrator for completion and submission to the issuing agency. If group health coverage is not available to the named employee, or the employee was never or is no longer an employee of the employer, the employer is still required to complete Part A—Employer Response—and return it to the issuing agency.
Upon notification from the plan administrator that the child is enrolled in the health insurance plan, employers will either: (1) withhold from the employee’s income any employee contributions required under each group health plan and transfer employee contributions to the appropriate plan, or (2) notify the issuing agency that enrollment cannot be completed because of a withholding prioritization or limitations on withholding.
If an employer does not already offer group health coverage, the NMSN does not require the employer to provide it just to comply with the notice. If health care coverage is available, the employer is required to enroll the child as instructed in the notice, subject to the limitations imposed by withholding laws of the state where the employee is principally employed. For example, California law prohibits employers from withholding more than 50 percent of the employee’s disposable earnings to pay for insurance premiums. Although an employee may object to enrollment of the child by contacting the issuing agency, the employer must still comply with the NMSN regardless of whether the employee objects.
Both federal and California law require employers to comply with NMSNs. An employer who fails to comply with an NMSN can be found in contempt of court and face penalties and fines. An employer may also be subject to sanctions or penalties for discharging an employee from employment, refusing to employ, or taking disciplinary action against any employee because of medical child support withholding, or for failing to withhold income, or transmit such withheld amounts to the applicable plan as the NMSN directs.