In certain instances, it takes a considerable amount of time to have a QMCSO certified by the court and then approved by the plan administrator. In some cases, QMCSOs or divorce decrees provide specific dates from which an employee is required to cover a dependent child under the employee’s health insurance plan. In other cases, a QMCSO or divorce decree does not provide an effective date for coverage to begin under an employer’s group health plan or FSA. In each of these cases, the plan administrator must determine when coverage should begin once the order is approved as a QMCSO.
For example, an employee who elected employee-only coverage under the employer’s plan enters into a QMCSO with his former spouse several years after their divorce (the divorce decree did not address health coverage for the child). The QMCSO requires the group health plan of the employee’s employer to provide coverage for the child. However, although the QMCSO does not contain an effective date as to when coverage under the employer’s plan must begin, the date the QMCSO was certified by a court precedes the date the employee submitted it to the plan administrator.
In this instance, when should coverage become effective? Do the Final 2000 Regulations permit the Plan to honor a retroactive effective date? Even if no date is specified by the decree or order, due to the processing time, 30-60 days may have passed from the date that the order or decree was granted. During such time, a dependent child may not have accident or health plan coverage. Further, in the case of HIPPA special enrollment rights for dependents, retroactive coverage is allowed by reason of IRC 9801(f). If coverage is retroactive, can the employee “make-up” contributions to his or her FSA for the current plan year from future paychecks?
