Page 55 - HarborLight CU 2014-15 SPD
P. 55
designates someone other than the employee to provide payment, the plan should
designate how and when payments are to be made. The plan might require
payments to be made to coincide with each payroll period. Alternatively, the plan
might use the payment procedures already in place for qualified beneficiaries under
the COBRA coverage continuation rules.
Authorization of an individual (who may not be the employee/parent) to receive
benefit reimbursements for the child's claimed expenses. The QMCSO rules state
that, to the extent medical expenses are paid by either the alternate recipient child or
the alternate recipient child's custodial parent or legal guardian, the plan must
reimburse that person (not the employee) for those expenses.
Alternate recipient as "beneficiary".
In general, the alternate recipient must be treated like any other beneficiary under
the plan. Unless the individual QMCSO is more restrictive, the alternate recipient
should be given the same coverage as would be provided to any other child of the
participant. The alternate recipient should be given COBRA rights upon the
occurrence of a qualifying event (such as the loss of dependent child status due to
age or student status).
Alternate recipient as "participant".
Note that with respect to ERISA reporting and disclosure rules, the alternate
recipient is to be treated like a participant of the plan. Therefore:
• The alternate recipient should be counted as a participant for purposes of the
Form 5500 annual report (if any).
• The alternate recipient should be sent copies of all applicable ERISA-required
disclosures, including the summary plan description, summary of material
modifications, and summary annual report (if any).
Preexisting condition exclusions and limitations.
Unless the alternate recipient is a newborn or newly-adopted child, the plan's
preexisting condition exclusion will apply to an alternative recipient under a QMCSO to
the same extent it would apply to a newly-eligible participant. That is, if the plan has a
pre-existing condition exclusion or limitation, and if the alternate recipient was not
eligible for coverage before the QMCSO was in effect, a 12-month period will apply
subject to credit for creditable coverage. And if the alternate recipient was eligible but
not enrolled prior to the QMCSO, then an18-month period will apply.
Special consideration - child already enrolled.
The parties may present the plan with a purported QMCSO even though the child is
currently enrolled as a covered dependent under the terms of the plan. In this
circumstance, the plan administrator should follow all QMCSO procedures, but also to
inform the parties of the child's status as a current beneficiary under the Plan. (See the
alternative language provided in the attached sample letters accepting or rejecting an
order.)
Attachments:
#I - Checklist for Determining the Validity of Order
#2 - Record of Completed Procedures
#3 - Letter Acknowledging Receipt of Order
#4 - Letter Accepting Valid QMCSO
#5 - Letter Rejecting Invalid Order
50
designate how and when payments are to be made. The plan might require
payments to be made to coincide with each payroll period. Alternatively, the plan
might use the payment procedures already in place for qualified beneficiaries under
the COBRA coverage continuation rules.
Authorization of an individual (who may not be the employee/parent) to receive
benefit reimbursements for the child's claimed expenses. The QMCSO rules state
that, to the extent medical expenses are paid by either the alternate recipient child or
the alternate recipient child's custodial parent or legal guardian, the plan must
reimburse that person (not the employee) for those expenses.
Alternate recipient as "beneficiary".
In general, the alternate recipient must be treated like any other beneficiary under
the plan. Unless the individual QMCSO is more restrictive, the alternate recipient
should be given the same coverage as would be provided to any other child of the
participant. The alternate recipient should be given COBRA rights upon the
occurrence of a qualifying event (such as the loss of dependent child status due to
age or student status).
Alternate recipient as "participant".
Note that with respect to ERISA reporting and disclosure rules, the alternate
recipient is to be treated like a participant of the plan. Therefore:
• The alternate recipient should be counted as a participant for purposes of the
Form 5500 annual report (if any).
• The alternate recipient should be sent copies of all applicable ERISA-required
disclosures, including the summary plan description, summary of material
modifications, and summary annual report (if any).
Preexisting condition exclusions and limitations.
Unless the alternate recipient is a newborn or newly-adopted child, the plan's
preexisting condition exclusion will apply to an alternative recipient under a QMCSO to
the same extent it would apply to a newly-eligible participant. That is, if the plan has a
pre-existing condition exclusion or limitation, and if the alternate recipient was not
eligible for coverage before the QMCSO was in effect, a 12-month period will apply
subject to credit for creditable coverage. And if the alternate recipient was eligible but
not enrolled prior to the QMCSO, then an18-month period will apply.
Special consideration - child already enrolled.
The parties may present the plan with a purported QMCSO even though the child is
currently enrolled as a covered dependent under the terms of the plan. In this
circumstance, the plan administrator should follow all QMCSO procedures, but also to
inform the parties of the child's status as a current beneficiary under the Plan. (See the
alternative language provided in the attached sample letters accepting or rejecting an
order.)
Attachments:
#I - Checklist for Determining the Validity of Order
#2 - Record of Completed Procedures
#3 - Letter Acknowledging Receipt of Order
#4 - Letter Accepting Valid QMCSO
#5 - Letter Rejecting Invalid Order
50
