When Medicaid or a child support order reaches your plan, deadlines and duties follow
State Medicaid and child support agencies can send requests and notices to employers and group health plans. This page sets out what federal law and Michigan statute say, which duties fall on the employer and which on the plan, and what we could not confirm.
Why Medicaid Looks at Your Plan.
Under 42 U.S.C. 1396a(a)(25), a state Medicaid plan must take reasonable measures to learn whether a third party is liable for a person’s care and, where one is, seek reimbursement. The statute lists group health plans among those third parties. It also directs states to have laws requiring insurers, as a condition of doing business in the state, to give coverage information on request, to accept the state’s recovery rights and to answer state inquiries within 60 days. A request may therefore come to your plan, your carrier or your administrator. We did not review the Michigan law that carries this out, and the MDHHS third-party liability page did not load for us.
ERISA adds two plan duties in section 609(b), 29 U.S.C. 1169(b). A plan must pay benefits according to an assignment of rights made under a state Medicaid plan, and where the state has paid for something the plan is legally liable for, the plan must pay as state law gives the state those rights.
Orders, Notices and the Two Clocks.
A qualified medical child support order (QMCSO) is a court or state administrative order that gives a child the right to coverage under a parent’s plan. A National Medical Support Notice (NMSN) that meets the same content tests is treated as a QMCSO. Under ERISA section 609(a), 29 U.S.C. 1169(a), the plan administrator must promptly notify the participant and each child when an order arrives, keep written procedures for deciding whether it qualifies, and decide within a reasonable time. For an NMSN, the administrator has 40 business days to tell the issuing state agency whether coverage is available and when it begins.
The employer has its own clock. Under 42 U.S.C. 666(a)(19)(B), an employer that receives an NMSN must transfer it to the health plan that covers the child within 20 business days, and must notify the state agency if the parent’s employment ends. Separately, 42 U.S.C. 1396g-1 provides that employers must withhold the employee’s share of the premium, within the limit set by 15 U.S.C. 1673(b), and pay it to the insurer.
Open Enrollment Does Not Block It.
Section 1396g-1 also limits what a plan can say no to. An insurer, a term that includes group health plans, may not refuse to enroll a child because the child was born out of wedlock, is not claimed as a dependent on the parent’s tax return, or does not live with the parent. Where a court or agency order requires coverage and the parent is eligible for family coverage, the parent may enroll the child without regard to enrollment season restrictions. If the enrolled parent does not apply, the plan must enroll the child on application by the other parent or the state Medicaid agency, and it may not disenroll the child without written proof that the order has ended or that comparable coverage begins.
What the State Statutes Add.
In Michigan, MCL 552.605a requires a court entering a child support order to direct one or both parents to obtain or maintain health care coverage that is accessible to the child and available at reasonable cost. The section puts its duties on parents and the court. We found none on employers or plans, so the employer’s duties come from the federal provisions above.
The Michigan Payment of Wages and Fringe Benefits Act, MCL 408.477, generally bars deductions from wages unless the law or a collective bargaining agreement requires or expressly permits them, or the employee gives full, free and written consent. We have not confirmed how the Act applies to a premium withholding that a medical support notice requires, and the statute text we read does not mention insurance premiums. Ask Michigan employment counsel before changing payroll practice. Our wages act guide covers the Act generally.
What To Do Now.
Name one person or inbox to receive notices, log the date each arrives and calendar the 20-business-day transfer deadline.
Give your carrier or administrator the contact for your plan administrator, and ask how it decides whether an order qualifies. ERISA requires written procedures.
Keep the notice, the transfer record and the date you passed it to the plan in the employee’s benefits file.
Common Misreadings.
Deciding for yourself whether an order qualifies. That decision belongs to the plan administrator.
Refusing enrollment because the window closed or the child lives elsewhere. The enrollment rules above say otherwise when an order requires coverage.
Treating a state agency’s coverage inquiry as optional because it is not a court order. Confirm with your carrier who must answer and by when.
Related Rules And Tools.
ERISA Part 7 Group Health Plan Requirements Checklist
The federal group health plan rules a plan document should reflect.
Participant Contribution Timing for Group Health Plans
When employee contributions must reach the plan.
Michigan Wages and Fringe Benefits Act Guide
Deductions and final pay under Michigan law.
HIPAA Special Enrollment and the Newborns Act
Special enrollment events and the notices that go with them.
Laws And Sources
42 U.S.C. 1396a: Paragraph (a)(25), third-party liability.
42 U.S.C. 1396g-1: Medical child support and employer withholding.
42 U.S.C. 666: Paragraph (a)(19), the National Medical Support Notice.
29 U.S.C. 1169: ERISA section 609, QMCSOs and state Medicaid rights.
MCL 552.605a: Health care coverage in Michigan child support orders.
MCL 408.477: Deductions from wages under Michigan law.
Quick Answers.
Short replies on this page’s topic, each tied to a fuller guide.
How long do we have to pass a National Medical Support Notice to our plan?
Federal law, 42 U.S.C. 666(a)(19)(B), gives the employer 20 business days to transfer the notice to the health plan that covers the child. The plan administrator then has 40 business days under ERISA section 609(a)(5)(C) to tell the issuing state agency whether coverage is available.
Can we refuse to enroll a child because open enrollment is over?
Not when a court or agency order requires the coverage. 42 U.S.C. 1396g-1 says the parent must be allowed to enroll the child without regard to enrollment season restrictions. Whether your plan fits the rule’s definitions is a question for your plan administrator and counsel.
Does Michigan wage law let us deduct the employee share of a child’s premium?
We could not confirm that. MCL 408.477 requires written consent for most deductions unless the law or a collective bargaining agreement requires or permits them, and the text we read does not mention insurance premiums. Federal law addresses withholding the employee’s share under a medical support order, so ask counsel how the two fit.
The Rest Of This Series.
Michigan Medicaid and Employer Group Health Coverage
The overview page for this series.
The Healthy Michigan Plan and Your Group Plan
Who the program covers and how employer coverage fits.
MIChild and Premium Payment for Employer Plans
Michigan’s CHIP state plan and premium payment, with what we could not confirm.
Work Requirements in 2027
The Healthy Michigan Plan work rule and what it may mean for HR.
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