[Federal Register: September 20, 2006 (Volume 71, Number 182)]
[Proposed Rules]
[Page 54965-54974]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr20se06-31]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Administration for Children and Families
45 CFR Parts 302, 303, 304, 305, and 308
RIN 0970-AC22
Child Support Enforcement Program; Medical Support
AGENCY: Administration for Children and Families, Department of Health
and Human Services (HHS).
ACTION: Notice of Proposed Rulemaking (NPRM).
-----------------------------------------------------------------------
SUMMARY: These proposed regulations would revise Federal requirements
for establishing and enforcing medical support obligations in child
support enforcement program cases receiving services under title IV-D
of the Social Security Act (the Act). The proposed changes would:
require that all support orders in the IV-D program address medical
support; redefine reasonable-cost health insurance; require health
insurance to be accessible, as defined by the State; and make
conforming changes to the Federal substantial-compliance audit and
State self-assessment requirements.
DATES: Consideration will be given to comments received by November 20,
2006.
ADDRESSES: Send comments to the Office of Child Support Enforcement,
Administration for Children and Families, 370 L'Enfant Promenade, SW.,
4th Floor, Washington, DC 20447, Attention: Director, Division of
Policy, Mail Stop: OCSE/DP. Comments will be available for public
inspection Monday through Friday, 8:30 a.m. to 5 p.m. on the 4th floor
of the Department's offices at the above address. A copy of this
regulation may be downloaded from http://www.regulations.gov. In
addition, you may transmit written comments electronically via the
Internet: http://www.regulations.acf.hhs.gov.
FOR FURTHER INFORMATION CONTACT: Thomas G. Miller, OCSE Division of
Policy, 202-401-5730, e-mail: tgmiller@acf.hhs.gov. Deaf and hearing
impaired individuals may call the Federal Dual Party Relay Service at
1-800-877-8339 between 8 a.m. and 7 p.m. eastern time.
SUPPLEMENTARY INFORMATION:
Statutory Authority
This notice of proposed rulemaking is published under the authority
granted to the Secretary of Health and Human Services (the Secretary)
by section 1102 of the Social Security Act, 42 U.S.C. 1302. Section
1102 of the Act authorizes the Secretary to publish regulations, not
inconsistent with the Act, that may be necessary for the efficient
administration of the title IV-D program.
This proposed rule is also published in accordance with section
452(f) of the Act, as amended by section 7307 of the Deficit Reduction
Act of 2005 (DRA of 2005), which directs the Secretary to issue
regulations which require that State agencies administering IV-D
programs ``enforce medical support included as part of a child support
order whenever health care coverage is available to the noncustodial
parent at reasonable cost.'' Section 7307 of the DRA of 2005 also added
two additional sentences to section 452(f) of the Act: ``A State agency
administering the program under this part [title IV-D] may enforce
medical support against a custodial parent if health care coverage is
available to the custodial parent at a reasonable cost, notwithstanding
any other provision of this part [title IV-D].'' And: ``For purposes of
this part, the term `medical support' may include health care coverage,
such as coverage under a health insurance plan (including payment of
costs of premiums, co-payments, and deductibles) and payment for
medical expenses incurred on behalf of a child.''
This proposed regulation is also published in accordance with
section 466(a)(19) of the Act, as amended by section 7307 of the DRA of
2005, which requires States to have in effect laws requiring the use of
procedures under which all child support orders enforced pursuant to
title IV-D of the Act ``shall include a provision for medical support
for the child to be provided by either or both parents.''
Background
In 2001, the Census Bureau estimated that 9.2 million of the
nation's children under the age of 19 (12.1 percent) were without
health insurance (Children With Health Insurance: 2001, Current
Population Reports, U.S. Census Bureau, August 2003). Of all children,
52.4 million were covered through private health insurance. Ninety-
three percent of the 52.4 million children were covered through an
employer-sponsored plan (ESI) and 19.5 million had coverage through a
government program. Children With Health Insurance: 2001, reports that
the rate of uninsured children in 2001 was lower than reported in 1997,
when Congress established the State Children's Health Insurance Program
(SCHIP).
A more recent Census Bureau report, Health Insurance Coverage in
the United States: 2002 (Current Population Reports, U.S. Census
Bureau, September 2003), found that the proportion of children who
remained uninsured did not change from 2001 to 2002, despite an
increase in the number and percentage of uninsured in the general
population to 43.6 million people (15.2 percent) in 2002. It appears
children were largely protected as a result of increased government-
sponsored health insurance coverage through Medicaid, SCHIP and
military health care (Health Insurance Coverage: 2002). While public
coverage increased, the percentage of people covered by employment-
sponsored health insurance (ESI) dropped in 2002, from 62.6 percent to
61.3 percent, driving an overall increase of 2.4 million U.S. residents
who were uninsured during the entire year of 2002. Only for children
did expanded public coverage offset the decrease in ESI.
The income disparity as to who does or does not receive ESI is
widely documented. Children With Health Insurance: 2001 estimates that
85 percent of children in families with incomes of at least 250 percent
of the poverty level have ESI, compared with 51.3 percent of children
in families with incomes between 133 and 200 percent of poverty level.
In 2002 the coverage rate for households with incomes of $25,000 to
$50,000 decreased 1.5 percentage points from 2001 rates (Health
Insurance Coverage: 2002).
For children who live apart from one or both of their parents,
securing private health care coverage or defraying the cost of public
benefits has proven even more complex and burdensome. From its creation
in 1975 Part D of title IV of the Act, the Child Support Enforcement
Program (IV-D program), has been responsible for locating noncustodial
parents; establishing paternity; establishing, modifying and enforcing
child support orders; and collecting and distributing child support
owed by the noncustodial parent. The initial focus of this Federal/
State/local partnership was to secure reimbursement for Federal welfare
expenditures from the noncustodial parents of these children.
The Child Support Enforcement Amendments of 1984 added a new
section to the Act, requiring State IV-D agencies to petition for
health care coverage in all IV-D cases in which
[[Page 54966]]
such coverage is available at reasonable cost. The Secretary of HHS
defined ``reasonable cost'' by regulation at 45 CFR 303.31: The cost of
health care coverage is reasonable if it is available through the child
support noncustodial parent's employment.
Federal regulations require that the State child support guidelines
must, at a minimum, ``provide for the child(ren)'s health care needs,
through health insurance coverage or other means.'' (45 CFR
302.56(c)(3)). The mechanism for accomplishing this mandate is
determined by each State. Generally, guidelines use one or a
combination of the following methods: One parent is ordered to provide
health insurance and the cost is deducted from his/her income before
the support obligation is calculated or the cost of health insurance is
added to the basic award and prorated between the parents. Where there
is no ESI or there are significant uninsured or extraordinary medical
expenses, States generally add an amount to the support award and
apportion it between the parents or consider such expenses a basis to
deviate from the guideline amount.
The Federal statute and regulations fostered cooperation between
State IV-D and Medicaid agencies. Under 42 CFR 433.151, Medicaid State
plans must provide for entering into cooperative agreements for
enforcement of rights to and collection of third party benefits with,
among other agencies, IV-D agencies. Child support program regulations
required State child support agencies to notify Medicaid agencies when
private family health coverage was obtained or discontinued for a
Medicaid-eligible person, and authorized Federal financial
participation for the cost of these services (45 CFR 304.20).
Seeking to remove legal impediments to securing private health care
coverage from noncustodial parents of child support-eligible children,
the Omnibus Budget Reconciliation Act of 1993 (OBRA '93) amended the
Employee Retirement Income Security Act of 1974 (ERISA), creating the
Qualified Medical Child Support Order (QMCSO). Every employer group
health plan must honor a properly prepared QMCSO that requires a plan
participant to provide coverage for a dependent child (29 U.S.C.
1169(a)). OBRA '93 required States as a condition of Medicaid funding
to enact laws prohibiting employers and insurers from denying
enrollment of a child under a parent's health coverage plan due to
various factors such as: The child's birth out-of-wedlock, failure to
claim the child as a dependent on the parent's Federal income tax
return, or the child's residence outside the insurer's service area or
with someone other than the employee.
Medical child support was strengthened in the Personal
Responsibility and Work Opportunity Reconciliation Act of 1996
(PRWORA). This legislation mandated that all child support orders
contain provisions for medical support. [The Child Support Performance
and Incentive Act of 1998 (CSPIA) discussed below, later moved this
requirement from section 466(a)(19) to section 452(f) of the Act. The
DRA of 2005 moved the requirement back to section 466(a)(19) as noted
under Statutory Authority.]
States also were required to provide a simple administrative
process for enrolling a child in a new health plan using a notice of
coverage. Section 609(a) of ERISA was amended to expand the definition
of ``medical child support orders'' to permit certain administrative
orders to be considered QMCSOs, rather than just court orders.
Recognizing that States' efforts to secure and enforce medical
support orders against child support obligors had met with limited
success and that significant problems remained, Congress enacted CSPIA.
This law included even stronger provisions to improve medical support
enforcement in the IV-D program. Further, the CSPIA directed the
Secretaries of HHS and the Department of Labor (DOL) to establish a
Medical Child Support Working Group (Working Group). The Working Group
included thirty members representing: HHS and DOL, State child support
directors, State Medicaid directors, employers (including payroll
professionals), sponsors and administrators of group health plans
defined by section 607(1) of ERISA, organizations representing children
potentially eligible for medical support, SCHIP programs, and
organizations representing child support professionals. The Working
Group was asked to identify impediments to the effective enforcement of
medical support by State IV-D agencies and make recommendations to the
Secretaries to eliminate them.
A final report, 21 Million Children's Health: Our Shared
Responsibility, offered 76 recommendations broken into five categories:
Federal Statute/Legislation; Federal Regulation/Guidance; Best
Practice; Technical Assistance and Education; and Research and
Demonstration. This proposed rule responds to several of the Working
Group's key recommendations. The Secretaries of HHS and DOL jointly
transmitted 21 Million Children to the Congress on August 16, 2000.
CSPIA also directed HHS and DOL to develop and promulgate a
National Medical Support Notice (NMSN), to be issued by State IV-D
agencies as a means of enforcing health care coverage provisions
contained in child support orders. HHS and DOL issued the final rule on
the NMSN jointly on December 27, 2000 (amending 29 CFR part 2590 and 45
CFR part 303) (65 FR 82154). All States have now implemented the NMSN.
Under ERISA, an appropriately completed NMSN is deemed to be a QMCSO
for the child, and the employer is required to comply with the Notice
in a timely manner.
After review of 21 Million Children and promulgation of the NMSN,
OCSE consulted with a wide range of program stakeholders in 2001 and
2002, including State and local workers and administrators, national
organizations, advocates and other parties interested in medical
support enforcement. These consultations explored the feasibility and
impact of the Working Group's recommendations, establishing which
recommendations had wide support. Those included in the consultations
were the National Governors Association (NGA), the National Conference
of State Legislators (NCSL), the American Public Human Services
Association (APHSA), the National Child Support Enforcement Association
(NCSEA), the National Council of Child Support Directors (NCCSD), the
Eastern Regional Interstate Child Support Association (ERICSA), and the
Western Interstate Child Support Council (WICSEC).
Resolutions passed by NCSEA, NCCSD, and ERICSA urged OCSE to expand
the definition of reasonable cost under 45 CFR 303.31 to include both
parents and to decouple it from ESI. These organizations joined in the
Working Group's conclusion that the definition ``deeming employment-
related coverage to be per se reasonable'' in cost is an artifact of
earlier decades when employment-related insurance was both widely
available and more heavily subsidized by the employer. Therefore, there
is broad support for eliminating the employer-tied definition of
reasonable cost.
Additionally, the HHS study Health Care Coverage Among Child
Support-Eligible Children, published in 2002 after the Working Group's
Report, suggests that untapped employer-sponsored insurance through
custodial mothers and their spouses might reduce the share of children
without private health insurance more significantly than similar
insurance through noncustodial
[[Page 54967]]
parents, for a variety of reasons, including availability,
accessibility, cost and preference. ``Half of child support-eligible
children living with their mothers are currently covered by [employer-
sponsored] insurance. The sources of this coverage are as follows: the
resident mother (26 percent), the noncustodial father (13 percent), a
step-father (7 percent), and another adult in the child's household (4
percent),'' (HHS, December 2002). Another 6.7 percent appear to have
access to employer-sponsored insurance (ESI) but are not covered.
(Custodial fathers are more likely to either provide ESI or have access
to it). Therefore, it appears that custodial mothers are the most
important source of ESI for child support-eligible children living with
their mothers, and provide more than one-quarter of those children with
ESI. Indeed, the Working Group's decision matrix to determine
appropriate health insurance coverage, presented in 21 Million
Children, contains a preference for using the custodial parent's (or
step-parent's) health insurance.
Provisions of the Regulation
We propose amending parts 302, 303, 304, 305, and 308, as discussed
below.
Part 302
Section 302.56--Guidelines for Setting Child Support Awards
Currently, under Sec. 302.56(c)(3), the State guidelines for
setting and modifying child support awards must provide for the
child(ren)'s health care needs, through health insurance coverage or
other means. We propose to amend Sec. 302.56(c)(3) to require that
guidelines ``address how the parents will provide for the child(ren)'s
health care needs through health insurance coverage and/or through cash
medical support in accordance with Sec. 303.31(b) of this chapter.''
The recommendations of the Working Group grew from a fundamental
understanding that parents share primary responsibility for their
children's needs. The proposed regulation clarifies that the resources
of both parents must be considered. The Working Group found that ``* *
* only 27 States'' child support guidelines direct the decision maker
to consider both parents as potential sources of health care coverage''
(21 Million Children).
The proposed language is purposely broad, ensuring that child
support guidelines consider not only health insurance coverage that may
be available from either, or both parents, but also how the parents
will meet the child's health care needs when no insurance is available,
when the cost of insurance is beyond the reasonable means of the
parents, or where the cost is extraordinary or unreimbursed by
insurance. It is possible that both health insurance coverage and cash
medical support would be included in a support order. For example,
where a custodial parent has access to maintain health insurance
coverage for the parties' child, the noncustodial parent may be
required to pay a share of the premium's cost. And each parent may be
ordered to pay a fixed sum or a percentage of the cost of allergy
shots, or orthodontic treatment or psychological counseling, not
covered by insurance.
This regulation does not mandate that State guidelines label the
payment of medical costs as a stand-alone item. States are free to
incorporate health costs within an existing methodology, such as those
described below, so long as the insurance and resources of both parents
are considered. The sole limitation is that considerations of
accessibility and affordability must be addressed in accordance with
Sec. 303.31(b), as proposed.
Currently, the health insurance premium to cover the child is
generally either deducted from the income of the parent providing
coverage or treated as an ``add on'' to the basic support obligation,
which may be further apportioned. Uninsured and extraordinary medical
expenses are usually either an ``add on'' or treated as a factor
allowing deviation from the guideline amount.
The Working Group acknowledged the variation in approach. The
elected methodology clearly affects the amount of the support
obligation. These are policy choices left to each State. Each State
should ensure that its child support guidelines address with
specificity how the cash child support award would then ``* * *
increase or decrease in order to account for health care premiums, and
child support orders should clearly specify how such amounts are to be
allocated between the parents'' (21 Million Children).
Part 303
As discussed below, we propose one change to case closure
regulations at Sec. 303.11, to address the circumstances under which a
child-only Medicaid case receiving IV-D services may be closed.
The other proposed amendments to part 303 incorporate major
recommendations of the Working Group. They shift the focus of providing
health insurance from the non-custodial parent with an employer-related
or other group plan, to either parent, to the extent that insurance
coverage is accessible and available at reasonable cost. The amendments
also broaden medical child support by specifically addressing cash
medical support.
Section 303.11--Case Closure Criteria
Section 303.11(b)(11) states that in order to be eligible for
closure, a case must meet the following criterion: ``In a non-IV-A case
receiving services under section 302.33(a)(1)(i) or (iii), the IV-D
agency documents the circumstances of the recipient of services's
noncooperation and an action by the recipient of services is essential
for the next step in providing IV-D services.''
Currently Sec. 303.11(b)(11) allows case closure for
noncooperation only for IV-D applicants (Sec. 302.33(a)(1)(i)) or
former IV-A, IV-E foster care or Medicaid families (Sec.
302.33(a)(1)(iii)). States have complained about lack of cooperation by
custodial parents of children in child-only Medicaid cases and the
inability to either ensure cooperation or close the case.
If, in a child-only Medicaid case, the IV-D agency documents that
the custodial parent has not cooperated and an action by the custodial
parent is essential for the next step in providing IV-D services, we
believe it would be appropriate, after meeting notice and waiting
period requirements under Sec. 303.11(c), for the IV-D agency to close
the case under Sec. 303.11(b)(11). We propose to authorize a State IV-
D agency to close such cases for noncooperation by adding references in
Sec. 303.11(b)(11) to child-only Medicaid cases receiving services
under Sec. 302.33(a)(1)(ii), which requires IV-D agencies to provide
services to non-IV-A Medicaid recipients. We do this by expanding the
reference in this section to include the whole of Sec. 302.33(a)(1).
However, we continue to encourage State Medicaid agencies to refer
cases to IV-D agencies when it is appropriate, and to develop criteria
and procedures, in conjunction with State IV-D agencies, for
appropriate referrals.
The proposed regulation would authorize States to close these cases
using the Secretary's rulemaking authority under section 1102 of the
Act to ensure efficient administration of his functions under section
452 of the Act. The Secretary is responsible under section 452(a)(1)
for setting standards determined to be necessary to assure IV-D
programs will be effective. Allowing States to close cases when the
custodial parent is not cooperating with the IV-D agency will allow
States to focus on cases in which the custodial parent is cooperating
with the State in
[[Page 54968]]
its efforts to secure support for his/her children.
Section 303.31--Securing and Enforcing Medical Support Obligations
Section 303.31(a)
We have added a new paragraph (a)(1) to define cash medical support
as ``an amount ordered to be paid toward the cost of health insurance
provided by a public entity or by another parent through employment or
otherwise, or for other medical costs not covered by insurance.'' This
would include the cost of: (1) Premiums when health insurance is
provided by another parent or through Medicaid or SCHIP; (2) medical
care such as orthodontia not covered by available health insurance; or
(3) medical costs when no reasonable or accessible insurance is
available. A health insurance premium or cash medical support
obligation is current support for purposes of distribution and
allocation between cash child support and cash medical support, as
discussed later in this preamble.
Currently, Sec. 303.31(a)(2) specifies that health insurance
includes fee for service, health maintenance organization, preferred
provider organization, and other types of coverage under which medical
services could be provided to dependent children of noncustodial
parents. We propose to amend Sec. 303.31(a)(2) by deleting reference
to the noncustodial parent and referring instead to either parent to
clarify that either parent could be ordered to provide health care
coverage.
Under current Sec. 303.31(a)(1), health insurance is considered
reasonable in cost if it is available through an employment-related or
other group health insurance, regardless of service delivery mechanism.
We proposed to renumber this provision as Sec. 303.31(a)(3) and to
revise it as follows: ``Cash medical support or private health
insurance is considered reasonable in cost if the cost to the obligated
parent does not exceed five percent of his or her gross income or, at
State option, a reasonable alternative income-based numeric standard
defined in State child support guidelines adopted in accordance with
Sec. 302.56(c).'' We are using the Secretary's rulemaking authority
under section 1102 of the Act to update an obsolete regulatory
requirement to recognize the evolution of the health care system over
the past decade, particularly with respect to availability of health
insurance through the workplace. Use of 1102 authority to update this
definition would eliminate the requirement for IV-D programs to
consider health insurance available through employment to be reasonable
in cost, and contribute to the State's and Secretary's responsibilities
to operate effective programs.
A major focus of the Working Group's recommendations was redefining
``reasonable cost'' in existing regulations. Research completed after
21 Million Children supported the Working Group's recommendation that
it was appropriate to remove from the regulation the conclusion that
health insurance through the noncustodial parent's employer is de facto
available at reasonable cost. During its consultation process on the
Working Group's recommendations, OCSE has been urged to change the
existing regulation to provide a definition of reasonable cost that
considers the parent's ability to pay.
The proposed rule changes in this Notice adopt the Working Group's
conclusion that a new measure is required to ascertain whether private
health insurance is ``reasonable in cost.'' For many, the cost of
obtaining such coverage, even when offered by an employer, is beyond
their reasonable means.
The trend over the last 20 years is significantly increased
employee costs for ESI coverage. At the time the existing regulation
was enacted, a majority of employers offered dependent health care
coverage to their employees at little or no cost. A 1997 General
Accounting Office report estimated that ``* * * in 1980, 51 percent of
employers who offered dependent coverage fully subsidized the cost, but
in 1993, only 21 percent of employers did so.'' The recent Census
Bureau report, Health Insurance Coverage in the United States: 2002,
reports that 30.8 percent of workers employed for firms with fewer than
25 employees are covered by their own ESI, compared with 68.7 percent
of covered workers in firms with 1000 or more employees. Even within
the few years since 21 Million Children was published, the cost to
employees has risen to more than 50 percent of the average child
support received (U.S. Census Bureau, Child Support for Custodial
Mothers and Fathers 1997).
State child support enforcement officials have been concerned that
the cost of health insurance would dramatically and disproportionately
reduce the cash child support award, leaving the custodial parent with
insufficient funds to meet the child's daily living expenses, and/or so
impoverish the noncustodial parent as to remove his or her incentive to
work.
After considerable debate, the Working Group recommended that
private health insurance coverage be deemed reasonable if the cost does
not exceed five percent of the gross income of the parent who provides
the coverage (21 Million Children). During the consultation process,
OCSE was made aware that States, professional organizations and
advocacy groups were engaged in considerable discussion over this
recommendation and varied in their position. The main division was
whether each State should be able to set the threshold for
reasonableness under its own guidelines--as some already do--or whether
the Working Group's five percent of gross income standard should be
adopted.
Recently, two States have considered how best to handle medical
support enforcement. A New Jersey grant project endorsed a standard of
reasonableness measured against five percent of the net income of the
person ordered to provide coverage. However, no coverage would be
required from ``parents whose net income is at or below 200 percent of
the Federal poverty level,'' unless the coverage is available at no
cost to the parent. See A Feasibility Study for Review and Adjustment
for Medical Support and SCHIP Collaboration (Feasibility Study). New
Jersey's report is available at http://www.acf.hhs.gov/programs/cse/pol/dcl/dcl-03-10.htm
.
Minnesota's Medical Child Support Workgroup recommended that no
contribution for medical support be required from parents with incomes
below 150 percent of poverty. For those with net incomes between 150
and 275 percent of the Federal poverty level, five percent of adjusted
gross income is ordered toward the cost of medical support. Minnesota's
December 2002 Report is available at (http://www.dhs.state.mn.us/ecs/ChildSupport/Reports
). The limitations on ordering a low-income parent
to provide health insurance offered in both studies mirror, in concept,
best practice recommendations in 21 Million Children: Unless insurance
is available from an employer without an employee contribution,
enrollment should not be ordered against either a parent with income at
or below 133 percent of the Federal poverty level or one whose child is
covered by Medicaid due to the enrolling parent's income.
Proposed Sec. 303.31(a)(3) is similar to the Working Group's five
percent of gross income recommendation and clarifies that ``reasonable
cost'' considerations apply where a tribunal is ordering health
insurance coverage and/or cash medical support. However, this rule
allows States the option of
[[Page 54969]]
adopting, as part of their child support guidelines under Sec. 302.56,
an alternate standard, that is reasonable, income-based and numeric. We
appreciate that there are competing interests in establishing a
reasonable cost standard and particularly welcome comments on this
issue.
In addition, the proposed definition recognizes the possibility
that one parent may have access to health insurance but the other
parent may be ordered to bear a portion or all of the cost of the
insurance. Therefore, the proposed regulation refers to the cost of
private health insurance that does not exceed five percent of the
obligated parent's gross income.
Section 303.31(b)
Currently, under Sec. 303.31(b), the introductory text specifies
that medical support enforcement services will be provided if rights to
medical support have been assigned to the State as a condition of
receiving Medicaid. We propose to amend the introductory text of Sec.
303.31(b) by deleting the reference to assignment of medical support
rights to the State since the IV-D agency must provide medical support
enforcement services to all IV-D recipients.
Sections 303.31(b)(1)-(4)--Addressing Medical Support in Child Support
Orders
To incorporate the concepts of including medical support (health
insurance and/or cash medical support) in every order, we propose to
revise Sec. 303.31(b)(1)-(4).
Under existing Sec. 303.31(b)(1), the IV-D agency is required to
petition for medical support in a new or modified child support order
if the noncustodial parent has health insurance available at reasonable
cost, unless the custodial parent and child(ren) have satisfactory
health insurance other than Medicaid. From consultations with our
individual State partners, and as discussed later in this preamble, we
believe there is a national consensus that simply ignoring the
availability of health care through the custodial parent's employment
is not in the best interest of children.
A second concern with the current rule is that it may require the
noncustodial parent to pay for health insurance coverage that is not
accessible to the child, due to distance or to plan restrictions that
make it virtually worthless for the child. A Working Group
Recommendation proposes a modification to Federal regulation: The
decision-maker establishing or modifying a child support order must
determine whether either the custodial or noncustodial parent is able
to obtain appropriate health insurance coverage. If appropriate
coverage is available, it is to be ordered. Appropriateness is based on
three factors. The first, affordability or reasonable cost, has been
discussed above and is included in these regulations.
The second component of ``appropriateness'' is accessibility.
Health insurance has little or no value if the child does not have
geographic access to the services provided by the coverage. Part of the
Working Group's new paradigm for setting medical child support orders
is that coverage should not be ordered where the services and providers
are unavailable to the child in practical terms. The Working Group
recommends that enrollment of a child in private health care coverage
is not required unless the coverage is found to be: available for at
least one year based on the work history of the parent providing
coverage and with the child living within the geographic area covered
by the plan or within 30 minutes or 30 miles of primary care services.
The Working Group further suggests that States be permitted to enact an
alternate standard.
OCSE agrees that health insurance should not be mandated when the
covered child cannot use it. However, we found no consensus among our
partners on how to define accessibility and concluded that this is not
an area in which the Federal government should be prescriptive. Thus,
the provisions contained in this proposed rule make it a State
responsibility to define under what circumstances health insurance is
``accessible.''
States are free to incorporate a definition that addresses only
geographic access to services or also to address the continuity problem
recognized by the Working Group. There is no public consensus on
whether and how to measure the value of private health insurance to a
child when it is frequently disrupted. For example, New Jersey's
proposed medical support guidelines do consider the stability of
coverage based on whether it is likely to be in place for at least one
year (Feasibility Study). Again, we concluded that this judgment is
best left to the individual States.
The third component of ``availability'' that the Working Group
recommends is whether the health insurance plan is comprehensive. We
concluded that this third measure should not be explicitly addressed in
Federal requirements, beyond the existing requirement in Sec.
303.32(c)(8), relating to the NMSN, under which IV-D agencies must
choose among insurance plans if more than one is available and the
child is not yet enrolled as ordered.
The Working Group also concluded that parents have the primary
responsibility to meet their children's needs, including health care
coverage. When one or both parents can provide ``accessible and
affordable health care,'' that coverage should not be replaced by the
expenditure of public funds from either Medicaid or SCHIP (21 Million
Children). Given the importance of medical support to the well being of
children, we propose that each newly-established or modified order must
directly address medical support, whether or not private health
insurance is currently available. To petition for such relief is
ineffective without a corresponding, comprehensive mechanism for
determining how courts or administrative hearing bodies will allocate
this responsibility between the parents, under some circumstances
subsidized by public benefits.
Rather than looking exclusively to the noncustodial parent, private
insurance available to both the custodial and noncustodial parent
should be considered. And while section 452(f) of the Act only requires
states to enforce medical support orders when the obligor is the
noncustodial parent, section 466(a)(19) of the Act requires that States
have in effect laws requiring the use of procedures under which all
child support orders enforced under title IV-D of the Act ``shall
include a provision for medical support for a child to be provided by
either or both parents.'' States will be required to submit an amended
State plan page providing assurances that laws and procedures require
inclusion of medical support provisions in new and modified orders.
Given both demographics and relative ease of use, the Working Group
concludes that, quite opposite to the current rule, there should be a
preference for coverage available to the custodial parent with
financial contribution by the noncustodial parent. Not only does this
expand the pool of available private health coverage but it also
provides coverage that is generally more accessible to the custodian
than that provided by the noncustodial parent.
Under proposed paragraph (b)(1), the State must petition the court
or administrative authority to include private health insurance
coverage in the support order if it is accessible to the child and
available at reasonable cost to the obligated parent. If private health
insurance is not available, then under proposed paragraph (b)(2), the
IV-D agency must petition to include a provision for cash medical
support in
[[Page 54970]]
all new and modified orders, to continue until accessible insurance
becomes available at reasonable cost. As defined by proposed paragraph
(a)(1), cash medical support includes not only payments to cover a
child's uninsured medical expenses but also may include an amount to be
paid toward the cost of health insurance provided through a government
program, such as Medicaid or SCHIP, or privately by the other parent.
For example, if a custodial parent of a child enrolled in SCHIP is
required to pay a co-payment or premium for SCHIP, the cash medical
support obligation of the noncustodial parent could be used to pay or
reimburse the custodial parent for any co-payment or premium owed to
SCHIP.
We are proposing paragraphs (b)(1) and (2) using the Secretary's
rulemaking authority under section 1102 of the Act to increase the
effectiveness of State IV-D programs and therefore allow for more
efficient administration of the Secretary's responsibilities under
section 452 of the Act. Incorporating the concept of accessibility of
health care as well as providing for a cash medical support obligation
in the absence of health insurance coverage will ensure an increase in
the availability of health insurance coverage for children, and, if
that is not possible, provide for cash medical support to contribute to
the child(ren)'s medical needs.
As it is possible for an order to include both an order to pay
health insurance and cash medical support, this regulation specifically
authorizes States to address both health insurance coverage and cash
medical support. For example, pursuant to Sec. 303.31(b)(1), where the
custodial parent had health insurance coverage available through his/
her employer, the decision-maker could first determine that the
insurance was both accessible to the child (as defined by the State)
and that the obligated parent's cost was less than five percent his/her
gross income (or another income-based numeric standard enacted by the
State). The obligated parent could be the custodial parent, the
noncustodial parent, or both parents, depending on the circumstances in
the particular case, the State's guidelines, and how responsibilities
are shared between the parties. If so, the child support order could
require the custodial parent to enroll the child in the health
insurance plan.
The support order could specify which parent is responsible for the
cost of obtaining the coverage or allocate responsibility for costs
between the parents. For example, should the custodial parent have
access to health insurance, and the cost of the insurance does not
exceed five percent of the noncustodial parent's gross income, the
custodial parent could enroll the child(ren) and the State could order
the noncustodial parent to pay cash medical support towards the cost of
the employee's share of health insurance coverage by the custodial
parent. It would be up to the State to determine how the premium is
paid, directly by the noncustodial parent to the plan administrator or
as reimbursement to the custodial parent should he or she have premiums
withheld from his or her income.
The order should also address allocation of the cost of any
uncovered expense--co-payments, deductibles, unreimbursed or
extraordinary expenses. The same scenario applies where the
noncustodial parent has accessible coverage, available at reasonable
cost.
However, private insurance may be found to be unavailable where:
neither parent has access to employer-sponsored or group coverage; the
cost of enrollment exceeds five percent of the obligated parent's gross
income (or other standard elected by the State); or the noncustodial
parent's insurance is not accessible to the child. In such a case, a
new or modified support order must contain a provision for cash medical
support in lieu of health insurance, consistent with the state's
guidelines. The amount of cash medical support must be reasonable as
defined under paragraph (a)(3). The amount paid could be used to
contribute to the cost of a government health insurance program and/or
to cover a child's medical needs not covered by health insurance.
If no private health insurance is available, the cash medical
support provision would continue until insurance becomes available and
the order is modified accordingly. State law, guidelines, and
procedures would determine the mechanism to modify the support order
when private insurance becomes available (for example, using
administrative adjustment, automatic modifications, or review and
modification by the issuing tribunal).
We appreciate that there are competing interests in how States will
accommodate these changes to establishing medical support. Will changes
to State child support guidelines be required? How will cash medical
support be designated? How will orders be modified once private health
insurance becomes available? We particularly welcome comments on these
issues.
Under current Sec. 303.31(b)(2), the IV-D agency is required to
petition for inclusion of medical support in a new or modified support
order whether or not health insurance is available to the noncustodial
parent at the time the order is entered or the children can be
immediately added to the health care coverage. We propose to delete
this section because under the Omnibus Budget Reconciliation Act of
1993 (OBRA '93), an employer receiving a QMCSO, including a NMSN, is
required to immediately enroll the child in the health plan, without
regard to open enrollment periods. Therefore, because of the OBRA '93
requirement, children can be immediately added to the health care
coverage and paragraph (b)(2) is no longer accurate.
Currently, under Sec. 303.31(b)(3), the IV-D agency is required to
establish written criteria to identify cases without a medical support
order when there is high potential for obtaining medical support based
upon evidence that health insurance may be available to the
noncustodial parent at a reasonable cost. We propose to revise this
section, changing ``cases'' to ``orders'', deleting the reference to
the noncustodial parent, since either parent could provide health care
coverage, and adding a cross-reference to Sec. 303.8(d). Section
303.8(d) requires that the ``need to provide for the child's health
care needs in the order, through health insurance or other means, must
be an adequate basis under State law to initiate an adjustment of an
order, regardless of whether an adjustment in the amount of child
support is necessary.'' States are free to define their own criteria so
long as, at a minimum, the State meets the requirement in Sec.
303.8(d) and includes as criteria: evidence, such as from New Hire
reporting or another database or reporting process that health
insurance is now available to the obligated parent; and other facts, as
defined by the State, and Federal review and adjustment requirements in
Sec. 303.8(d), that are sufficient to warrant modification of the
order to include medical support.
Currently, under Sec. 303.31(b)(4), the IV-D agency is required to
petition the court or administrative authority to modify a support
order to include medical support in the form of health insurance
coverage when cases meet the modification criteria established by the
State for inclusion of medical support. We propose in Sec.
303.31(b)(4) to petition for medical support and to require the IV-D
agency to petition the court or administrative authority to modify
support orders to include medical support in accordance with the
proposed regulation when cases meet the modification criteria for
inclusion of medical support discussed above.
[[Page 54971]]
Sections 303.31(b)(5)-(b)(9), and (c)--Securing and Enforcing Medical
Support Obligations
We propose deleting current Sec. Sec. 303.31(b)(5), (7) and (9)
that require the IV-D agency: to provide the custodial parent with
``information pertaining to the health insurance policy'' obtained
under a support order; to enforce health insurance coverage ordered but
not obtained; and to request that employers and health insurers inform
the agency of lapses in coverage. Under OBRA '93, the plan
administrator is required to provide information and forms regarding
the child's coverage directly to the custodial parent. This requirement
is included on the NMSN. Therefore, the requirement in paragraph (b)(5)
for the IV-D agency to do so is no longer necessary. Since states are
required to use the NMSN to enforce all orders for health insurance
coverage under Sec. 302.32, the separate requirement to do so under
paragraph (b)(7) is unnecessary. The employer's responsibility to
notify the IV-D agency when an employee-obligor's health insurance has
lapsed under paragraph (b)(9) is contained in Sec. 303.32(c)(6) and on
the NMSN itself.
In accordance with the deletions of these sections, the remaining
paragraphs have been renumbered. Existing paragraph (b)(6) becomes
proposed (b)(5) and existing paragraph (b)(8) becomes proposed (b)(6).
Paragraph 303.31(c) continues to require that medical support
services shall be provided to individuals eligible for services under
Sec. 302.33.
Section 303.32--National Medical Support Notice
Currently, under Sec. 303.32(c)(4), employers must withhold any
employee share of premiums and send any amount withheld directly to the
insurance plan. States are required to allocate amounts available for
income withholding across multiple orders under Sec. 303.100(a)(5),
recognizing that there may be insufficient funds to meet all of the
orders/notices for withholding. Similar situations will occur where the
employee's income is insufficient to meet the mandates to withhold both
payments for health insurance premiums required by the NMSN and cash
child support under an income withholding order.
Both the Working Group and our individual state partners with whom
we discussed these issues raised concern that the cost of health
insurance might adversely impact funds available for cash child
support, particularly where the obligor is under a support order for
more than one family. This proposed regulation incorporates an
allocation priority presented in 21 Million Children. Using our
rulemaking authority under section 1102 of the Act, the proposed
regulation places current cash child and spousal support first in
priority, followed by health insurance and cash medical support, then
arrearages, and finally other child support obligations. However, it
affords the State decision-maker the opportunity to require a different
allocation when the best interest of the child so dictates. Some
existing State laws may need to be amended to meet this proposed
requirement.
We propose to revise existing paragraph 303.32(c)(4) requiring the
employer to withhold employee contributions for health coverage for the
children and forward them to the plan. Proposed paragraph (c)(4) would
require employers to:
``(i) Withhold any obligation of the employee for employee
contributions necessary for coverage of the child(ren), and send any
amount withheld directly to the plan; or (ii) Where there are
insufficient funds available to meet the employee's contribution
necessary for coverage of the child(ren) and also to comply with any
withholding orders received by the employer under Sec. 303.100 of
this part, up to the limits imposed under section 303(b) of the
Consumer Credit Protection Act (15 U.S.C. 1673(b)), the employer
shall allocate the funds available in accordance with Sec.
303.100(a)(5) and the following priority, unless a court or
administrative order directs otherwise:
(A) Current child and spousal support;
(B) Health insurance premiums or current cash medical support;
(C) Arrearages; and
(D) Other child support obligations.''
This proposed hierarchy places health insurance premiums or current
cash medical support before payment of arrearages because premiums and
cash medical support are considered current support for distribution
purposes.
Finally, under current Sec. 303.32(d), the effective date for
implementing the use of the NMSN is specified. We are deleting this
paragraph as unnecessary because all States are using the NMSN. The
remainder of Sec. 303.32 is unchanged. Using the Secretary's authority
to regulate under section 1102 of the Act to specify the appropriate
allocation of available funds for health insurance premiums, current
child support and current cash medical support will ensure consistency
across State programs and therefore contribute to the effective
operation of IV-D programs. This allocation formula responds, along
with the National Medical Support Notice, to the Secretary's
responsibility under section 452(f) of the Act to issue regulations
governing the enforcement of medical support when included as part of a
child support order.
Part 304
Section 304.20--Availability and Rate of Federal Financial
Participation (FFP)
Currently, under Sec. 304.20(b)(11), FFP is available for services
and activities under approved IV-D State plans, including required
medical support activities as specified in Sec. Sec. 303.30 and
303.31. To include reference to the NMSN requirements in Sec. 303.32,
we propose to revise Sec. 304.20(b)(11), to read as follows:
``Required medical support activities as specified in Sec. Sec.
303.30, 303.31, and 303.32 of this chapter.''
Part 305
Section 305.63--Standards for Determining Substantial Compliance With
IV-D Requirements
Currently, under Sec. 305.63(c)(5), for the purposes of optional
Federal audits to determine substantial compliance with State plan
requirements, the State must provide certain specified required medical
support services in at least 75 percent of the cases reviewed. We
propose to add the requirements under Sec. 302.32, the National
Medical Support Notice (NMSN), to the program services subject to the
substantial compliance audit because of the importance of ensuring that
States meet Federal requirements for use of the NMSN.
We are using our rulemaking authority under section 1102 of the Act
to include reference to the National Medical Support Notice
requirements under Sec. 302.32 in both the Federal audit authority
under Sec. 305.63 and the State self-assessment requirements in Sec.
308.2 below. The Secretary may conduct audits, in accordance with
section 452(a)(C) of the Act, when appropriate, to determine the
effectiveness of State programs. These Federal audits and State self-
assessments combine to ensure that States operate efficient and
effective IV-D programs.
Part 308
Section 308.2--Required Program Compliance Criteria
Currently under Sec. 308.2(e), for purposes of the State's annual
self-assessment review and report, the State must evaluate whether it
has provided certain specified required medical support services in at
least 75 percent of the cases reviewed. We are adding reference to use
of the NMSN as required in Sec. 303.32 to the self-assessment process
because we failed to
[[Page 54972]]
do so when the NMSN was finalized. States should determine as part of
their annual self-assessments whether Federal requirements with respect
to use of the NMSN are being met.
We proposed to revise Sec. 308.2(e) by deleting current Sec.
308.2(e)(2), (5), (6), and (7) since these required program compliance
criteria refer to requirements in Sec. 303.31 that have been deleted
in the proposed regulation and to make the self-assessment requirements
consistent with other changes to the medical support enforcement
requirements made by this regulation. Proposed Sec. 308.2(e)(1) would
require a determination of whether the State is meeting its obligation
to include medical support that is reasonable and accessible, in
accordance with Sec. 303.31(b) in at least 75 percent of new or
modified support orders.
Under proposed Sec. 308.2(e)(2), States are required to assess
their own performance according to their criteria: ``If reasonable and
accessible health insurance was available and required in the order,
but not obtained, determine whether the National Medical Support Notice
was used to enforce the order in accordance with the requirements in
Sec. 303.32 of this chapter.'' Current Sec. 308.2(e)(4) requires
States to report whether the State Medicaid agency was informed ``* * *
that coverage had been obtained when health insurance was obtained,''
has been renumbered as proposed Sec. 308.2(e)(3) and the cross-
referenced section has been amended to cite Sec. 303.31(b)(5), to
comport with the changes elsewhere in these proposed regulations.
We propose to add a new Sec. 308.2(e)(4) for States to assess
their own performance with the use of the NMSN: ``Determine whether the
State transferred notice of the health care provision, using the
National Medical Support Notice required under Sec. 302.32 of this
chapter, to a new employer when a noncustodial parent was ordered to
provide health insurance coverage and changed employment and the new
employer provides health care coverage.''
Paperwork Reduction Act
Under the Paperwork Reduction Act of 1995, Public Law 104-13, all
Departments are required to submit to the Office of Management and
Budget (OMB) for review and approval any reporting or recordkeeping
requirements inherent in a proposed or final rule. Interested parties
may comment to OMB on these reporting requirements as described below.
This NPRM contains changes to reporting requirements in Part 308, which
the Department has submitted to OMB for its review.
Section 308.1(e) contains a requirement that a State report the
results of annual self-assessment reviews to the appropriate OCSE
Regional Office and to the Commissioner of OCSE. The information
submitted must be sufficient to measure State compliance with Federal
requirements for expedited procedures and to determine whether the
program is in compliance with title IV-D requirements and case
processing timeframes. The results of the report will be disseminated
via ``best practices'' to other States and also be used to determine
whether technical assistance is needed. The State plan preprint page
for this requirement (page 2.15, State Self-assessment and Report) was
approved by OMB on January 18, 2001, under OMB Number 0970-0223.
The revisions to section 308.2(e), which address securing and
enforcing medical support, will slightly reduce the paperwork burden on
States, by eliminating three information collection and reporting
requirements because, under these proposed regulations, medical support
will be included in all new and modified support orders, but the
reduced paperwork burden would be negligible.
Respondents: State child support enforcement agencies in the 50
States, the District of Columbia, Guam, Puerto Rico, and the Virgin
Islands.
This information collection requirement will impose the estimated
total annual burden on the agencies described in the table below:
----------------------------------------------------------------------------------------------------------------
Average burden
Information collection Number of Responses per hours per Total annual
respondents respondent response burden hours
----------------------------------------------------------------------------------------------------------------
Section 308.1........................... 54 1 3,866 208,764
----------------------------------------------------------------------------------------------------------------
The Administration for Children and Families (ACF) will consider
comments by the public on the proposed information collection in order
to evaluate the accuracy of ACF's estimate of the burden of the
proposed collection of information. Comments by the public on this
proposed collection of information will be considered in the following
areas:
Evaluating the accuracy of the ACF estimate of the burden
of the proposed collection[s] of information, including the validity of
the methodology and assumptions used;
Enhancing the quality, usefulness, and clarity of the
information to be collected; and
Minimizing the burden of the collection of information on
those who are to respond, including through the use of appropriate
automated, electronic, mechanical, or other technology, e.g.,
permitting electronic submission of responses.
OMB is required to make a decision concerning the collection of
information contained in these proposed regulations between 30 and 60
days after publication of this document in the Federal Register.
Therefore, a comment is best assured of having its full effect if OMB
receives it within 30 days of publication. This does not affect the
deadline for the public to comment to the Department on the proposed
regulations. Written comments to OMB for the proposed information
collection should be sent directly to the following: Office of
Management and Budget, Paperwork Reduction Project, 725 17th Street,
NW., Washington, DC 20503, Attn: Desk Officer for the Administration
for Children and Families.
Regulatory Flexibility Analysis
The Secretary certifies, under 5 U.S.C. 605(b), and enacted by the
Regulatory Flexibility Act (Pub. L. 96-354), that these proposed
regulations will not result in a significant impact on a substantial
number of small entities. The primary impact is on State governments.
State governments are not considered small entities under the Act.
Regulatory Impact Analysis
Executive Order 12866 requires that regulations be reviewed to
ensure that they are consistent with the priorities and principles set
forth in the Executive Order. These proposed rules provide solutions to
problems in securing private health care coverage for children who live
apart from one or both of their parents and the Department has
determined that they are consistent with the priorities and principles
set forth in the Executive Order.
[[Page 54973]]
These proposed regulations implement section 7307 of the Deficit
Reduction Act of 2005, the Administration's proposal to require States
to consider medical support available to either parent in establishing
a medical support obligation, and to enforce medical support at their
option when the obligated parent is the custodial parent. They also
address certain recommendations of the Medical Child Support Working
Group, which included public deliberation, and additional input from
state and local IV-D administrators and other child support enforcement
stakeholders.
There are no costs associated with these proposed rules. They do
not introduce new requirements for including medical support in child
support orders, a long-standing program requirement, but rather broaden
States options for addressing the availability and accessibility of
health care coverage. For example, by focusing on health insurance
coverage available to either parent, these rules recognize that
untapped employer-sponsored insurance through custodial mothers and
their spouses might reduce the share of children without private health
insurance. As discussed earlier in the preamble, an HHS study Health
Care Coverage Among Child Support-Eligible Children, 2002, found that
half of child support-eligible children living with their mother are
currently covered by employer-sponsored insurance.
These regulations are significant under section 3(f) of the
Executive Order because they raise novel policy issues and therefore
have been reviewed by the Office of Management and Budget.
Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act requires that a
covered agency prepare a budgetary impact statement before promulgating
a rule that includes any Federal mandate that may result in the
expenditure by State, local, and tribal governments, in the aggregate,
or by the private sector, of $100 million or more in any one year. The
Department has determined that these proposed regulations would not
impose a mandate that will result in the expenditure by State, local,
and tribal governments, in the aggregate, or by the private sector, of
more than $100 million in any one year.
Congressional Review
These proposed regulations are not a major rule as defined in 5
U.S.C., chapter 8.
Assessment of Federal Regulations and Policies on Families
Section 654 of the Treasury and General Government Appropriations
Act of 1999 requires Federal agencies to determine whether a proposed
policy or regulation may affect family well-being. These proposed
regulations will have a positive impact on family well-being as defined
in the legislation, by providing greater access to health care
coverage.
Executive Order 13132
Executive Order 13132 on Federalism applies to policies that have
federalism implications, defined as ``regulations, legislative comments
or proposed legislation, and other policy statements or actions that
have substantial direct effects on the States, or on the distributions
of power and responsibilities among the various levels of government''.
These proposed regulations do not have federalism implications for
State or local governments as defined in the Executive Order.
List of Subjects
45 CFR Part 302
Child support, Grant programs/social programs, Reporting and
recordkeeping requirements.
45 CFR Parts 303 and 304
Child support, Grant programs/social programs, Reporting and
recordkeeping requirements.
45 CFR Part 305
Child support, Grant programs/social programs, Accounting.
45 CFR Part 308
Auditing, Child support, Grant programs/social programs, Reporting
and recordkeeping requirements.
(Catalog of Federal Domestic Assistance Programs No. 93.563, Child
Support Enforcement Program)
Dated: February 16, 2006.
Wade F. Horn,
Assistant Secretary for Children and Families.
Approved: June 20, 2006.
Michael O. Leavitt,
Secretary, Department of Health and Human Services.
For the reasons discussed above, title 45 CFR chapter III is
amended as follows:
PART 302--STATE PLAN REQUIREMENTS
1. The authority citation for part 302 continues to read as
follows:
Authority: 42 U.S.C. 651 through 658, 660, 664, 666, 667, 1302,
1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), 1396(k).
2. Amend Sec. 302.56 by revising paragraph (c)(3) to read as
follows:
Sec. 302.56 Guidelines for setting child support awards.
* * * * *
(c) * * *
(3) Address how the parents will provide for the child(ren)'s
health care needs through health insurance coverage and/or through cash
medical support in accordance with Sec. 303.31(b) of this chapter.
* * * * *
PART 303--STANDARDS FOR PROGRAM OPERATIONS
1. The authority citation for part 303 continues to read as
follows:
Authority: 42 U.S.C. 651 through 658, 660, 663, 664, 666, 667,
1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 1396b(p), and 1396k.
Sec. 303.11 [Amended]
2. In Sec. 303.11, amend paragraph (b)(11) by removing ``(i) or
(iii)'' after ``Sec. 302.33(a)(1).''
3. Revise Sec. 303.31 to read as follows:
Sec. 303.31 Securing and enforcing medical support obligations.
(a) For purposes of this section:
(1) Cash medical support means an amount ordered to be paid toward
the cost of health insurance provided by a public entity or by another
parent through employment or otherwise, or for other medical costs not
covered by insurance.
(2) Health insurance includes fee for service, health maintenance
organization, preferred provider organization, and other types of
coverage which is available to either parent, under which medical
services could be provided to the dependent child(ren).
(3) Cash medical support or private health insurance is considered
reasonable in cost if the cost to the obligated parent does not exceed
five percent of his or her gross income or, at State option, a
reasonable alternative income-based numeric standard defined in State
child support guidelines adopted in accordance with Sec. 302.56(c).
(b) The State IV-D agency must:
(1) Petition the court or administrative authority to include
health insurance that is accessible to the child(ren), as defined by
the State, and is available to the obligated parent at reasonable cost,
as defined under paragraph (a)(3) of this section, in new or modified
court or administrative orders for support;
[[Page 54974]]
(2) If health insurance described in paragraph (b)(1) of this
section is not available at the time the order is entered or modified,
petition to include cash medical support in new or modified orders
until such time as health insurance, that is accessible and reasonable
in cost as defined under paragraph (a)(3) of this section, becomes
available. In appropriate cases, as defined by the State, cash medical
support may be ordered in addition to health insurance coverage.
(3) Establish written criteria to identify orders that do not
address the health care needs of children based on--
(i) Evidence that health insurance may be available to either
parent, and
(ii) Facts, as defined by State law, regulation, procedure, or
other directive, and review and adjustment requirements under Sec.
303.8(d) of this part, which are sufficient to warrant modification of
the existing support order to address the health care needs of children
in accordance with paragraphs (b)(1) and (2) of this section.
(4) Petition the court or administrative authority to modify
support orders, in accordance with State child support guidelines, for
cases identified in paragraph (b)(3) of this section to include health
insurance and/or cash medical support in accordance with paragraphs
(b)(1) and (b)(2) of this section.
(5) Inform the Medicaid agency when a new or modified court or
administrative order for child support includes health insurance and/or
cash medical support and provide the information referred to in Sec.
303.30(a) of this part to the Medicaid agency when the information is
available for Medicaid applicants and recipients.
(6) Periodically communicate with the Medicaid agency to determine
whether there have been lapses in health insurance coverage for
Medicaid applicants and recipients.
(c) The IV-D agency shall inform an individual who is eligible for
services under Sec. 302.33 of this chapter that medical support
enforcement services will be provided and shall provide the services
specified in paragraph (b) of this section.
4. Amend Sec. 303.32 by revising paragraph (c)(4), and removing
(d), to read as follows:
Sec. 303.32 National Medical Support Notice
* * * * *
(c) * * *
(4) Employers must:
(i) Withhold any obligation of the employee for employee
contributions necessary for coverage of the child(ren), and send any
amount withheld directly to the plan; or
(ii) Where there are insufficient funds available to meet the
employee's contribution necessary for coverage of the child(ren) and
also to comply with any withholding orders received by the employer
under Sec. 303.100 of this part, up to the limits imposed under
section 303(b) of the Consumer Credit Protection Act (15 U.S.C.
1673(b)), the employer shall allocate the funds available in accordance
with Sec. 303.100(a)(5) of this chapter and the following priority,
unless a court or administrative order directs otherwise:
(A) Current child and spousal support;
(B) Health insurance premiums or current cash medical support;
(C) Arrearages; and
(D) Other child support obligations.
* * * * *
PART 304--FEDERAL FINANCIAL PARTICIPATION
1. The authority citation for part 304 continues to read as
follows:
Authority: 42 U.S.C. 651 through 655, 657, 1302, 1396a(a)(25),
1396b(d)(2), 1396b(o), 1396b(p), and 1396k.
Sec. 304.20 [Amended]
2. Amend Sec. 304.20(b)(11) by removing ``Sec. Sec. 303.30 and
303.31'' and adding ``Sec. Sec. 303.30, 303.31, and 303.32'' in its
place.
PART 305--PROGRAM PERFORMANCE MEASURES, STANDARDS, FINANCIAL
INCENTIVES, AND PENALTIES
1. The authority citation for part 305 is revised to read as
follows:
Authority: 42 U.S.C. 609(a)(8), 652(a)(4) and (g), 658A and
1302.
Sec. 305.63 [Amended]
2. Amend Sec. 305.63(c)(5) by adding ``and Sec. 302.32'' after
``under Sec. 303.31''.
PART 308--ANNUAL STATE SELF-ASSESSMENT REVIEW AND REPORT
1. The authority citation for part 308 continues to read as
follows:
Authority: 42 U.S.C. 654(15)(A) and 1302.
2. Amend Sec. 308.2 by revising paragraph (e) to read as follows:
Sec. 308.2 Required program compliance criteria.
* * * * *
(e) Securing and enforcing medical support orders. A State must
have and use procedures required under this paragraph in at least 75
percent of the cases reviewed. A State must:
(1) Determine whether support orders established or modified during
the review period include medical support in accordance with Sec.
303.31(b) of this chapter.
(2) If reasonable in cost and accessible health insurance was
available and required in the order, but not obtained, determine
whether the National Medical Support Notice was used to enforce the
order in accordance with requirements in Sec. 303.32 of this chapter.
(3) Determine whether the IV-D agency informed the Medicaid agency
that coverage had been obtained when health insurance was obtained
during the review period pursuant to Sec. 303.31(b)(5) of this
chapter.
(4) Determine whether the State transferred notice of the health
care provision, using the National Medical Support Notice required
under Sec. 302.32 of this chapter, to a new employer when a
noncustodial parent was ordered to provide health insurance coverage
and changed employment and the new employer provides health care
coverage.
* * * * *
[FR Doc. 06-7964 Filed 9-19-06; 8:45 am]
BILLING CODE 4184-01-P