Mandated Medical Support for Kids: Compliance Best Practices
Part of a series | Wage Garnishment Insights
Making kids' medical care a priority shows your business is both compliant and compassionate. By fulfilling medical support obligations for kids efficiently, businesses can create a positive work environment, meet legal requirements, ensure employee well-being and productivity and reduce liabilities and costs so everyone can rest easier.
Medical support is a form of child support that provides either cash medical support or health insurance. Often, this requires an order to ensure healthcare is provided to children. For employers, child support and medical support orders present a challenge of balancing consistent, compassionate care of employees with an obligation to comply with varying child support requirements.
Two distinct pathways highlight this obligation: income withholding notices for wage garnishment and the National Medical Support Notice/Order to enroll a child in an available healthcare plan. The National Medical Support Notice (NMSN) is a standardized form issued by state child support agencies to enforce the provision of healthcare coverage for dependent children.
These NMSNs are an integral part of child support enforcement. Federal law* mandates that employers follow the directives outlined in the NMSN, whether this involves enrolling children in an existing plan or providing the agency with pertinent information regarding available health coverage options.
Concerns about healthcare rank high among most Americans, encompassing both their own well-being and that of their children1.
Adverse consequences of uninsured status:
- Unmet health and dental needs
- Lower receipt of preventive services
- Avoidable hospitalizations
- Increased likelihood of expensive emergency room care
- Reduced familiarity of doctors with patients' medical history
Public health emphasis on early monitoring:
- Early and frequent monitoring of children's health as crucial for appropriate growth and development
Family benefits and financial responsibility:
- Health insurance coverage significantly reduces parental financial and emotional stress
- Medical child support holds noncustodial parents responsible, increasing private health insurance coverage for dependent children and shifting costs away from taxpayers.
Best practices for handling an NMSN
Step 1: Assess whether any of the categories on the Employer Response apply to you or the employee in question, potentially preventing compliance or implementation of the NMSN, such as:
- You do not provide health care coverage for your employees.
- The employee is not eligible for the health care coverage you provide.
- The employee has been terminated or has left this employment.
Step 2: If any of the categories apply, complete the Employer Response form and send it back to the issuing agency within 20 business days from the notice date of the NMSN. If you will be enrolling the child(ren) in a new health insurance program, forward Part B to your plan administrator.
Step 3: Once received, the plan administrator will notify you. Now you can determine whether the total deductions exceed the maximum limit allowed under the Consumer Credit Protection Act (CCPA) and any applicable state laws.
Step 4: If the CCPA or applicable state law limits are too high to cover both ongoing support and health care premiums, and the applicable priority scheme doesn't permit healthcare premium payment first, complete question No. 4 on Part A of the Employer Response form to inform the issuing agency that the employee's children cannot be added.
Step 5: If enrollment is delayed due to a waiting period or other requirements, inform the plan administrator once the employee becomes eligible for enrollment.
Step 6: Return the completed form to the issuing agency.
Providing medical support for kids is vital
Ensuring you properly handle your responsibilities to provide medical support for your employees' children is challenging but vital. There are specific rules, deadlines, various laws, calculations and tasks to perform and if any of these are not executed correctly, a child's medical needs care could be delayed or worse.
Can you be sure that those you've tasked with complying with an NMSN didn't miss a crucial reporting deadline or improperly calculate the order or worse, delayed a child's care as a result of a clerical error? A mistake like this could keep you up at night.
Neglecting your obligations in this area could lead your business to face legal liabilities and costs since non-compliance with child support laws can result in sanctions or penalties against your business. Yet, 57% of small companies and 44% of mid-size companies2 say they are not extremely or very confident that they can keep up with compliance rules, emphasizing the stress concerns about non-compliance can have on an organization. This is particularly noteworthy for small companies, where 64% of HR decision-makers have other responsibilities and lack the time and resources to confront increasingly challenging compliance requirements.
Conclusion
Court-ordered healthcare for kids is their right, so don't get it wrong. ADP has expanded and enhanced its full-service wage garnishment solution to assist with completing and submitting NMSNs3. By working with ADP, you'll help secure a more confident future for your employees, and, most importantly, their children.
Contact ADP today to learn more about how our SmartCompliance Wage Garnishment module can benefit your organization.
*Title IV, Section 466(a)(19) of the Social Security Act.
1Family Identity and Support Issues, Anne Bennett, Ed.
2ADP Research Institute. Competition, Cost Control & Compliance/Strategies to Navigate a Changing HR World.
3This service is only applicable to NMSNs issued from a state child support agency. Any medical support orders/notices issued from other agencies or persons are not processed by ADP and remain the responsibility of the employer.
