The Internal Revenue Service (IRS) offers employers guidance for responding to a National Medical Support Notice (NMSN). Developed to ensure children receive health care coverage when it is available, NMSNs are sent to employers by their state child support enforcement agency.
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Employers receive NMSNs if one of their employees has child support obligations. The NMSN is a standardized form advising employers when an employee has been ordered to provide health insurance coverage for his or her child through the employer’s health care plan. Use of the NMSN is intended to simplify the work of employers and plan administrators by providing uniform documents requesting health care coverage.
The form is divided into four parts:
- Part A, “Notice to Withhold For Health Care Coverage”
- Employer Response
- Part B “Medical Support Notice to Plan Administrator”
- Plan Administrator’s Response
The first part, “Part A – Notice to Withhold For Health Coverage”, is important to employers because it provides identifying information for the case.
Employers providing health insurance coverage to employees, when there is no delay of coverage for the employee identified in the NMSN due to a waiting period, need not complete any part of the form. Under such circumstances, employers should simply forward “Part B – Medical Support Notice to the Plan Administrator” to the plan administrator. If enrollment cannot be completed until after a waiting period or other contingency, the employer should notify the plan administrator when the employee will become eligible for enrollment.
In fact, employers should forward “Part B – Medical Support Notice to Plan Administrator” to their healthcare plan administrator unless one of the following four situations exist:
- The employer does not provide heath insurance coverage to employees.
- The employee is ineligible for the healthcare coverage provided.
- The employee is no longer employed by the employer because of termination or voluntary resignation.
- The deduction for healthcare coverage offered cannot be made because of state or federal withholding limits and the state’s priority for withholding. These limitations will be included in the instructions that accompany the NMSN.
If any of these situations exist, the employer should complete the “Employer Response” portion of the NMSN and return it to the issuing agency within 20 business days.
Once “Part B – Medical Support Notice to Plan Administrator” is forwarded to the healthcare plan administrator, they should complete the form according to the accompanying instructions and return it to the Issuing Agency. The plan administrator should also notify the employer when enrollment is completed. The employer then notifies the payroll department so that the appropriate deductions for employee contributions required under the plan are made. It is possible that some employers will not know whether the total deduction amounts exceed federal or state withholding limits.
If the employer determines the amount of support, coupled with the deduction for healthcare premiums exceeds the maximum deduction allowable, look to the state law in which the employee is employed to determine the priority for payment. If the Consumer Credit Protection Act (CCPA) limits preclude payment of ongoing support and health care premiums and the priority scheme does not allow for the payment of the health care premium first, the employer must notify the issuing agency by completing the “Employer Response” portion of the form.
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.