Improving Health Care Coverage in the Child Support System
Apr 01, 1997 | Paula Roberts
Table of Contents
- Executive Summary
- Maximizing the Number of Children Who Have Access to Health Insurance Coverage Through Their Non-Custodial Parents' Insurance
- Determined Use of Automation and Other Newly Enacted Information Gathering Techniques to Obtain Information About Potential Dependant's Health Insurance Coverage at the Time an Order Is Entered, and Periodically Thereafter.
- Aggressive Pursuit of Health Insurance Coverage in Every Order Obtained or Modified by the IVD System
- Use the Proper Language in the Child Support Order So That the Entity Providing the Health Insurance Will Honor the Order.
- Coordinate Enforcement with the Enforcement of Income Withholding Orders
- Follow up Once the Employer Puts the Coverage in Place
- Keep Coverage in Place Whenever Possible
- Pay Special Attention to Federal Government Employees
- Increasing Opportunities for Non-Custodial Parents to Obtain Health Insurance Coverage for Their Children
- Enact State Laws Requiring Groups Which Offer Dependant's Coverage to Include All of the Employees Children.
- Expand the Availability of Low-Cost Health Insurance for Children So That Non-Custodial Parents Can Obtain Such Coverage
In America today, there are approximately ten (10) million children who lack health insurance. There are four primary reasons for this.
- employers are cutting back on health insurance benefits for their employees. Traditionally, families have obtained health insurance for their children through their jobs. Thus, it is surprising to note that almost ninety (90) percent of uninsured children have parents who work; nearly two-thirds (64 percent) have parents who work full-time year round. However, in recent years, employers have begun scaling back the coverage they offer to their employees, especially in the area of family coverage. The problem is particularly acute for low-wage workers. Only forty (40) percent of workers earning less than $5 per hour have employers that offered any health care coverage. Only 13 percent have employer based coverage for themselves and their families.
- employers are requiring employees to pay a significant amount to obtain family coverage. Even when employers offer family coverage, they often require that the covered employee make a substantial contribution to the premium; for health insurance that covers the entire family, the average employee must pay over $1,600 per year. Many families simply cannot afford these premiums.
- many low income children who are eligible for Medicaid are not enrolled in the program. Medicaid offers health insurance coverage to many low income children: children under age six (6) are eligible if their family income is less than 133% of the poverty line and children between the ages of six (6) and thirteen (13) are eligible if their family income is below 100 percent of the poverty line. Unfortunately, many of these children -- especially those whose parents are employed-- are not actually enrolled in that program.
- a significant number of children in single parent families are unable to access health insurance that ought to be available to them because the child support system is not doing all it needs to do to obtain and enforce this coverage. Part of the problem is that so many single parents do not have a basic child support order providing either cash or medical support to their children. Part of the problem is that those with orders have difficulty enforcing those orders. According to the Census Bureau, 5.3 million custodial parents do not have a child support order for their children, while another 3.6 million have a support order which does not include health insurance. While 2.6 million have an order which does include health insurance, in nearly one-third of these cases, the medical support part of the order is not being enforced.
In recent years, some attention has been paid to the first three issues. Indeed, federal legislation has been introduced to address some of these problems. The child support issue, however, is rarely considered.
This paper begins to address this gap in two ways. First, it looks at the steps the child support system could take, within the confines of existing law, to provide and enforce health insurance coverage for more children than it now does. In addition to laws already in place, a 1995 Presidential Order and the recently enacted Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 contain provisions which have the potential to expand the availability of health insurance to children. To do this, the following steps need to be taken by state child support enforcement (IVD) agencies:
- determined use of automation and other new information gathering techniques to obtain information about the availability of dependant's group health insurance coverage at the time a child support order is entered, and periodically thereafter.
- aggressive pursuit of provisions relating to health insurance coverage in every child support order obtained or modified by the IVD system.
- inclusion as boilerplate language in all support orders issued or modified by the IVD agency a requirement that parents inform the IVD agency of any changes in the health insurance coverage available to them and that they provide the IVD agency with all relevant information about available new policies.
- uniform use of proper language in the child support orders so that the medical support provision contained in the order can be enforced against both conventional insurance plans and plans which are covered by the Employees Retirement Income Security Act of 1974 (ERISA).
- protocols for obtaining exact information from ERISA employers about the details of their plans so legally enforceable orders can be drafted.
- authority to administratively modify child support orders (whether initially issued by a court or an administrative entity) to alter the details of the order anytime a non-custodial parent has a change in coverage from a non-ERISA plan to an ERISA plan (or vice versa) to fit the new/changed plan.
- enactment and full implementation of state laws which enable the state child support agency to interact with employers to obtain health insurance coverage when the non-custodial parent fails to enroll the children as required by the support order.
- enactment and full implementation of state laws which require employers and insurers to cover children whether or not it is open season for the plan and regardless of the relationship or living situation of the covered parent and the child.
- coordination of enforcement of the health insurance provisions of the order with the income withholding provisions of the order.
- development of child support order forms and/notices from the IVD agency to the employer or insurer which clearly state that the custodial parent is to be given information and claim forms, that claims must be processed when signed by that parent, and that reimbursement is to be made directly to the custodial parent, provider, or Medicaid agency as appropriate.
- routine notification to employers that they cannot eliminate a child's health insurance coverage unless the order is no longer in effect or they have received proof that the child is enrolled in another plan.
- vigorous pursuit of federal governmental employees (including those in the military) whose health insurance coverage could be made available to their children.
These steps are necessary, but not sufficient. For, even if the child support system did a better job of obtaining/enforcing health insurance coverage for children, there would still be a problem in those instances where there were limitations on coverage and/or the non-custodial parent did not have access to reasonably priced dependants health insurance coverage through his/her job. Thus, it is important to look at strategies to expand the availability of health insurance coverage for children. These include: when an employer or group offers dependants coverage, making sure that non-marital children and children not living with the covered parent are eligible for benefits. This can be done through aggressive implementation of recently enacted federal requirements in this area.
when dependants coverage is not available, creating inexpensive group policies through which non-custodial parents can purchase coverage. This enables non-custodial parents to have greater ability to provide health insurance to their children than they now do. Of particular importance are efforts to link custodial parents with medical support obligations to emerging child-only insurance programs.
The second part of this article addresses these issues.
However, these efforts alone are not enough. As will be discussed in this monograph, there are also some barriers in federal law and policy which must be overcome before health insurance becomes a reality for many children. Two major concerns are:
serious problems in federal law relating to the Employees Retirement Income Security Act (ERISA) which make it very difficult to both draft enforceable health insurance orders and to move such orders from one employer to another.
a lack of incentives in the child support funding structure for states to actively and agressively pursue medical support for children.
A full discussion of these issues is beyond the scope of this monograph. Hopefully, these issues will be addressed by Congress in the near future.
INTRODUCTION The Nature and Scope of the Problem
Whether they use private attorneys or their state child support (IVD) system, a majority of custodial parents have not been able to obtain health insurance for their children through their child support order. Almost as troubling is that well over a million children have coverage which could disappear at any time because their non-custodial parent is providing access to health insurance but is not legally obligated to do so. Consider the following data from the Census Bureau:
Health Insurance Coverage for Those with Child Support Orders
[TABLE 1] What this data suggests is that the issue of health insurance is not being adequately addressed by those responsible for obtaining support orders. Only 40 percent of orders even address the issue. When health insurance issues are addressed in the order, a significant number of custodial parents (1.7 million) are actually able to obtain health insurance coverage for their children.
This data also suggests that insufficient attention is being paid to enforcement of those orders which are obtained: in 32 percent of the orders requiring the non-custodial parent to obtain health insurance for his/her children, the coverage is not being provided. Nearly a million more children could obtain health insurance if these orders were enforced!
Also of interest, are the over half a million (658 thousand) cases in which the issue of health insurance was not addressed in the order, but the non-custodial parent nonetheless provided health insurance to his/her children. Without an enforceable support order, these children receive coverage at the sufferance of their non-custodial parent. Such coverage could be taken away at any time. These orders should be modified to make the children's access to the insurance legally enforceable. Close to a million other children would be positively affected by this action.
The Census Bureau data also contain some interesting information about families which do not actually have child support orders.
Provision of Health Insurance by Non-Custodial Parents
in Families with No Child Support Order
These numbers suggest that another one million children are obtaining health insurance through their non-custodial parent even though that parent is not legally obliged to provide it. However, without a legally binding child support order, these children too could easily loose access to this coverage. Child support orders-- including a requirement that health insurance be provided-- should be obtained for these children.
The Need for a IVD System Response
Some parents obtain and enforce their child support orders through private attorneys. The majority of low and moderate income parents, however, use their state's child support enforcement program. This program has existed-- pursuant to Title IVD of the Social Security Act--since the mid- 1970's. Under this law, each state has a system to locate absent parents, establish paternity, obtain and periodically modify support orders, and enforce those orders. Families receiving assistance under Title IVA of the Social Security Act and those receiving Medicaid are automatically eligible for these services. Other families apply and sometimes pay a small application fee. The vast majority of those who use this system are low and moderate income families headed by a mother. Typically, these mothers are unemployed or working at low wage jobs which do not provide health insurance. As a result the children either receive Medicaid or go without health insurance.
Because it is children who use the state IVD system who are least likely to have private insurance available to them through their custodial parent, this monograph will focus on the steps the IVD system could take to obtain available group health insurance coverage through a non-custodial parent for these children. However, many of the state laws described here would also benefit children using private attorneys to establish and enforce their support obligations.
The strategies suggested here would also have potential benefit to states and the federal government. At this time, these entities are paying the cost of Medicaid coverage for some children. If children now receiving Medicaid could be moved to private insurance, there are millions of dollars in potential government savings.
Some children might also benefit. Those without any coverage would certainly be helped. Those who now receive Medicaid might find that private insurance provides more stable coverage than Medicaid because Medicaid is in a period of change. As a result of the PRWORA of 1996, some children who received AFDC may not be eligible for assistance under the new state program called Temporary Assistance to Needy Families (TANF) and will thus loose their automatic Medicaid eligibility. Others who remain eligible for assistance under TANF are no longer automatically eligible for Medicaid. While children in families eligible for AFDC under the old rules will be eligible for Medicaid in this new scheme, the lack of an automatic link may mean that many--while eligible-- will not be enrolled.
In addition, under the PRWORA of 1996, many families will leave assistance as parents take jobs. Once off assistance, children under age 6 will be Medicaid eligible only if their family's income from the new job is below 133 percent of the federal poverty line. Older children will be even more vulnerable: those between six and thirteen will be Medicaid eligible only if family income is below 100 percent of poverty and, for now, those over thirteen will not be eligible at all.
Thus, while the strategies discussed here for obtaining private health insurance coverage are by no means a panacea, they do represent an important avenue to health care coverage for at least some children and may be very important to children no longer receiving public assistance.
MAXIMIZING THE NUMBER OF CHILDREN WHO HAVE ACCESS TO HEALTH INSURANCE COVERAGE THROUGH THEIR NON-CUSTODIAL PARENTS' INSURANCE Step 1. Determined Use of Automation and Other Newly Enacted Information Gathering Techniques to Obtain Information About Potential Dependant's Health Insurance Coverage at the Time an Order Is Entered, and Periodically Thereafter.
For the IVD agency, the first critical step in the process of obtaining health insurance coverage for children is to determine whether coverage is actually available. Several provisions of the PRWORA of 1996 should make this easier for IVD agencies to do in individual cases.
Section 325 requires states to give statutory authority to their IVD agency to obtain information about benefits (e.g. health insurance coverage) from all public and private employers in the state without the need to obtain a judicial or administrative order. Employers must provide such information on their contractors as well as their employees. Failure to respond to requests for information should result in a sanction.  Enactment and vigorous use of laws implementing this provision should give states much greater access to information about the health care coverage of non-custodial parents employed in their state.
Section 316 gives authority to the Federal Parent Locate Service (FPLS) to obtain information on benefits available to a non-custodial parents, including their rights to or actual enrollment in group health insurance. Implementation of this provision by the federal government should be valuable in interstate cases and cases where a state cannot, for some reason, obtain information under Section 325.
States are also developing the capacity to obtain information on a mass processing basis. Since 1988, states have been under a mandate to automate their child support systems. A few have already completed the process and the rest are required to do so by October 1, 1997. To be certified as acceptable, these systems must have the ability to periodically request employers and other groups offering health insurance coverage to notify the IVD agency of changes in coverage. States can use this capacity to make regular requests of employers and then update the IVD case files of the non-custodial parents who are their employees.
In other words, the reforms mandated by Section 325 described above in conjunction with automation, will give state IVD agencies the capacity to constantly update information about benefits available to non-custodial parents efficiently and effectively. Through this mechanism the IVD agency will be able to quickly track changes in coverage and to expeditiously identify employers who were not providing group coverage in the past but are now doing so.
States need to take advantage of these new provisions and adopt policies under which they periodically obtain information from employers on a broad basis about potential health insurance coverage and, as appropriate, on an individual basis whenever they are seeking or modifying a child support order.
It is also important to note that parents' situations are subject to change. In the course of their work lives, non-custodial parents may move from one job to another. In the process they may gain or loose access to dependant's health insurance benefits. Similarly, non-custodial parents may be promoted or demoted within the same job, gaining or loosing access to benefits. Sometimes, non-custodial parents have been newly hired and are in a probationary period at the time the support order is entered or modified. At the end of the probationary period they may gain benefits --like health insurance-- that were not previously available. The automation required by federal law as well as the PRWORA provisions discussed above which give state IVD agencies and the FPLS greater access to employer-provided benefits information should help IVD agencies quickly identify changes in coverage and allow them to move/implement orders accordingly.
However, it would be even better if the non-custodial parent immediately informed the state when he/she changes jobs or obtains/looses dependant's health benefits through an existing job. Federal regulations require that support orders issued in IVD cases contain a provision requiring the non-custodial parent to keep the IVD agency informed of the name/address of his/her employer, whether he/she has access to health coverage at a reasonable cost, and, if so, the health insurance policy information. Some states have gone so far as to mandate that support orders in all cases require both parents to provide this information and have incorporated such requirements into their state laws. Whether the state chooses to enact a statute or adopt a regulatory policy in this area, it should be sure that its standardized support order forms include a requirement that parents keep the IVD agency informed about any changes in the dependant's health insurance coverage available to them and provide the IVD agency with all relevant information about the policy .
Step 2. Aggressive Pursuit of Health Insurance Coverage in Every Order Obtained or Modified by the IVD System.
When Group Insurance Coverage is Available
With the proper information in hand, the IVD agency needs to swiftly pursue an order which requires group coverage to be made available to the children. Unfortunately, there has been a long history of confusion about the state IVD agency's obligation in this regard. In 1976, when states began putting their child support (IVD) programs in place, it was not clear whether state child support agencies were required to obtain medical support orders for those seeking cash support. In 1984, federal law was amended to require state agencies to be responsible for obtaining health insurance coverage for children whenever it is available to the non-custodial parent at reasonable cost.
"Health insurance" is defined to include fee for service plans, health maintenance organizations (HMOs), preferred provider organizations (PPOs), and any other arrangement under which services could be provided to the children.
"Reasonable cost" is defined to include any coverage available through employment or some group (e.g., a union) policy."
To facilitate implementation of this requirement, the IVD agency is supposed to obtain information about a non-custodial parent's access to group health insurance and the policy name and number in all cases where the family is receiving assistance under the state's IVA or Medicaid program and in all other IVD cases in which the custodial parent requests that medical support enforcement services be provided. The vast majority of IVD cases fall into these categories. Thus, for some years, federal law has required state child support agencies to obtain information about and seek health insurance coverage in every child support order they obtain against a non-custodial parent who has access to group health insurance.
Further, in 1988, Congress required states to have a process for periodically reviewing and-- where appropriate-- modifying child support orders. Regulations implementing this requirement make it clear that review includes evaluating whether the order needs to be changed to provide for the children's health care needs. In fact, states are supposed to have written criteria for identifying cases in which it is likely that group insurance coverage is available and aggressively pursue those cases. Moreover, whenever a modification in the cash award is sought, health insurance issues must also be considered; even when an adjustment in cash support is not sought, a modification to include group health insurance should be sought if appropriate. Thus, for several years, federal law has also required that state child support agencies to determine whether group health insurance coverage is available to the children through their non-custodial parent whenever they review a support order and to seek a modification to obtain such coverage--regardless of whether an adjustment in cash support is sought-- when it is.
In other words, it is crystal clear that the IVD agency is to obtain information about available group health insurance and seek to have it provided to the children whenever they are establishing or modifying a support order. But what is their obligation when group health insurance does not appear to be available? To answer this question, it is helpful to look at the law governing state child support guidelines.
In 1988, Congress required states to have and use specific guidelines for setting child support obligations. These guidelines are to be used in all cases unless the court or administrative agency entering the order makes specific findings on the record why use of the guidelines would be unjust or inappropriate. Regulations implementing this law declare that the state's guidelines must address the issue of payment for the children's health care through health insurance coverage or other means. Thus, federal law requires that state child support agencies have and use child support guidelines which address who will be responsible for the children's health care needs regardless of whether health insurance is actually available to either parent.
One way to deal with this is to apportion the children's medical cost. Another is to include in the order a requirement that if group health insurance does become available, then the non-custodial parent will place the children on the policy. To this end, federal regulations require the IVD agency to pursue health insurance coverage even when group coverage is not actually available at the time the order is entered or modified or when coverage is available but for some reason the child does not qualify for coverage at that point in time. The idea is to address health insurance in the order so that if and when group insurance does become available to the non-custodial parent, coverage for the children can be obtained without the need to return to the court or administrative agency which set the order to have it amended to include such coverage.
In short, new and modified orders obtained by the IVD agency in the last few years should provide health insurance coverage for children if it is actually available and --in cases where it is not currently available--provide that if and when it does become available, the obligated parent is to enroll the children. Unfortunately, many IVD orders still don't address this issue. According to recent data, only 61 percent of the child support orders established in Fiscal Year 1995, actually included some provision for health insurance. In fifteen states, less than 50 percent of new orders contained such a provision.
To address this problem, the Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (PRWORA) contains a direct and unambiguous requirement that "all child support orders enforced [pursuant to Title IVD] shall include a provision for the health care coverage of the child". Thus, the second step in any strategy to provide health insurance coverage to children through the state child support (IVD) system is to follow the law and aggressively pursue group health insurance coverage in every child support order obtained or modified by that system whether or not such coverage is actually available at the time the order is entered.
Special Issues Raised by Changes in the PRWORA of 1996 in Regards to Modification
Addressing the health insurance issue in the initial order is particularly important in states thinking about using a cost-of-living adjustment (COLA) approach to the modification of support orders. The Personal Responsibility and Work Opportunities Reconciliation Act of 1996 (PRWORA) allows states to revise their procedures for modifying support orders. While still requiring that a process for review and adjustment under the state's child support guidelines be available at least once every three (3) years for parties wishing such review, the new law gives states three options for structuring the process. Under the old law, a case-by-case review was required whenever one of the parents requested it and in all public assistance cases unless the state determined that it was not in the best interests of the child to proceed. This remains--with minor modification-- an option. However, in lieu of this, the state could opt to use a COLA system. Under this option, if requested by a parent or the state public assistance agency, an order would be automatically updated to reflect changes in the cost of living every three years. Since this type of adjustment can be done without the need to investigate the actual situation of the parties, a minimum amount of state effort is required. This makes it an attractive method of adjustment from the state point of view. Many states may wish to take this option.
However, if the state does so, it may not properly investigate whether the health insurance issue has been addressed in the order. Since many existing orders do not contain the necessary language, children could loose out on potential coverage. States considering the cost- of -living option to periodically modify support orders need to consider how they will address this problem. One approach would be a one-time effort to modify all existing orders that do not require the absent parent to provide group health insurance coverage when it becomes available to add this provision. A one-time effort, coupled with a commitment to include appropriate language in all new orders, would address the problem. Given the statistics cited above about the number of new orders which still do not contain appropriate language regarding health care, failure to adopt this or a similar approach could leave children with existing orders unable to access coverage.
Step 3. Use the Proper Language in the Child Support Order So That the Entity Providing the Health Insurance Will Honor the Order.
As noted above, federal law now makes it clear that, henceforth, every IVD order must address the issue of health care coverage for the children. Determining how to word the order so that available insurance is actually provided is crucial. To make this determination, the IVD agency must find out--at the time the order is entered or modified-- whether coverage is actually available. Using its automation capacity, administrative authority to obtain information from employers, and its access to FPLS data, described in Step 1, the IVD agency should be able to do this much more easily in the future than it has in the past.
With that information, the agency can determine whether group health insurance is or is not available. There are then three possibilities:
such coverage is not available. In that case, general language can be placed in the order requiring that such insurance be provided to the children if and when it becomes available.
group insurance coverage is available and the plan is not one covered by the Employees Retirement Income Security Act of 1974 (ERISA). In that case, general language can be inserted in the order requiring the employer to place the children in the plan.
group insurance coverage is available, but the plan is an ERISA plan. In that case, the order must contain very specific language to make it a Qualified Medical Child Support Order (QMCSO).
If the potential insurance is provided by a plan subject to ERISA, the job of the IVD agency is particularly difficult. Since about half of all health insurance is now provided by ERISA plans, this is no small obstacle. On the positive side, before 1993, it was impossible to get any coverage under such plans. However, in attempting to open up the process so that ERISA plans could be used by dependant children who do not live with the covered employee-parent, Congress created a very exacting set of requirements.
Initially, the administrator of an ERISA plan had to accept only court orders. If the medical support order was entered through administrative process, it would not necessarily be honored. The PRWORA of 1996 changed that so that now administrative as well as court orders must be honored. However, whether issued by a court or administrative agency, the order must contain the following information:
that it is a medical child support order that provides health insurance coverage under an employer-sponsored group health plan.
citation to the state statute governing the provision of such support.
These requirements are straightforward and easy to satisfy. However, the federal law goes on to require that the order contain:
the name and last known mailing address (if any) of the covered employee ("participant".)
the name and mailing address of each child covered by the order. (The child is referred to as the "alternate recipient".)
a reasonable description of the type of coverage to be provided under the plan to each child or the manner in which such coverage is to be determined.
the period of time to which the order applies.
the exact name of each plan to which the order applies.
Finally, the medical child support order cannot require the plan administrator to provide any type of benefit or option not otherwise provided by the plan. An order which meets these requirements is called a Qualified Medical Child Support Order or QMCSO.
Obviously, to draft an order that meets these requirements--and is thus a QMCSO which must be honored by the ERISA plan administrator-- the IVD agency must have very specific information about the exact type of plans offered by the employer and what they do and do not cover. It is not enough to know that dependant's coverage is available: the exact details of the coverage must be obtained. This can be time consuming and difficult. It requires case-by-case work. This can slow down the processing of a case and delay the issuance of a cash support order as well as health care coverage.
For example, a given ERISA plan may offer an indemnity option, an HMO, a PPO, a cafeteria plan, and/or flexible spending accounts. It may offer separate dental coverage, mental health/substance abuse services, vision care or prescription drug benefits. The IVD agency needs to know the specific name of each plan and the exact type of services offered which are to be made available to the child for enrollment. The IVD agency must also be careful not to ask for services not provided by the plan. For instance, if the order requires dental services and those are not offered, the ERISA plan administrator must reject the order and will not enroll the child in the other available plans/services for which he/she is eligible.
The existence of these ERISA requirements is perhaps the biggest existing barrier to efficient use of the IVD system to obtain health insurance for children. In addition to being very complicated, QMSCO's are not readily transferable from one employer to another. Because they are so specific, the IVD agency has to obtain detailed, new information when the employee changes jobs. It must then go back to the court or administrative agency which entered the order and have it amended so that it fits the requirements of the new ERISA employer. Moreover, if the original child support order contained only general language (either because group insurance was not available at the time the order was entered or because group insurance was available through a non-ERISA plan), and the non-custodial parent later gains coverage through an ERISA plan, the original order will also have to be amended to meet the QMCSO requirements.
However, if the IVD agency does so, it may be violating a provision of the PRWORA of 1996. The new law contemplates a system in which the medical support order is transferred from one employer to another without the need for amendment. It requires states to have procedures under which, when an obligated non-custodial parent who provides health insurance to the children changes jobs, the state is able to swiftly and efficiently transfer the medical support order to the new employer. The new employer must then enroll the child in the plan.
Until Congress addresses the issue, this will remain a major problem. In the meantime, the best thing states can do is to set up a system in which the IVD agency has 1) protocols for obtaining exact information from ERISA employers about the details of their plans and 2) authority to administratively modify child support orders (whether initially issued by a court or an administrative entity) to alter the details of the order to fit the new/changed ERISA employer's plan.
Step 4. Coordinate Enforcement with the Enforcement of Income Withholding Orders.
Once the IVD agency has obtained a health insurance order and it is in the proper form, the next step is to enforce that order. Until recently, some insurer's were not very cooperative, denying coverage if the child was a non-marital child, was not a dependant for tax purposes and/or did not live with his/her covered parent. In 1993, Congress addressed these problems and amended the Medicaid statute to require that --in their Medicaid state plans-- states had to certify that they had certain laws in place. These laws include statutes which prohibit insurers from denying enrollment to a child on the grounds that:
the child is a non-marital child;
the child is not claimed as a dependent on the covered parent's federal income tax return;
the child does not reside with the covered parent; or
the child does not live in the insurer's service area.
These prohibitions apply to ERISA plans as well. In short, insurers who receive medical support orders should honor them without inquiry into the relationship or living situation of the covered parent and the child. A number of states have now adopted laws implementing this federal requirement. Those who have not done so need to act.
Another frequently encountered barrier which was addressed by the 1993 law was insurers' refusal to enroll a child unless it was the plan's "open season". Again Congress made it a state Medicaid plan requirement that the state have laws addressing this issue. State law must require both employers and insurers to permit a covered parent, who is subject to a court or administrative order to do so, to immediately enroll his/her child in family health coverage. The parent can not be made to wait until open enrollment season.
These provisions will make it easier for parents subject to a medical support order to fulfill their obligations and enroll their children in available coverage. Sometimes, however, parents ignore their obligations and fail to enroll their children as required by the order. As discussed in Step 1, states' new automated systems should be able to quickly identify such cases and alert IVD workers that action is necessary. Federal specifications for these systems require that they be able to 1) alert the IVD worker when information required to implement a medical support order (e.g. proof of enrollment) has not been received; and 2) monitor ongoing compliance with such orders once they are in place. When compliance is not forthcoming by either the non-custodial parent or the employer, then the IVD worker is to be prompted to act.
The obligation is to serve the employer or insurer with a medical support order. Another provision of the 1993 law makes this possible. To have its state Medicaid plan approved, a state must also have state laws which require employers and insurers (including ERISA plans) to enroll children in family coverage when asked to do so by the state IVD agency if an obligated parent fails to enroll the children as required by a court or administrative order. States have taken a variety of different approaches to such statutes. Key issues include:
whether to have the IVD agency act as soon as the medical support order is entered or to give the non-custodial parent time (e.g., 15 days) to seek coverage and provide proof that coverage is in place. For efficiency, the ideal would be to serve the employer with both the health insurance order and the income withholding order at the same time. However, some argue that the non-custodial parent should be given the opportunity to behave responsibly and enroll the child in the insurance plan.
what kind of notice should the IVD agency send to the employer/insurer and how should it be served. From the employer/insurers point of view, a simple national uniform notice explaining exactly what is to be done and what the consequences of failing to enroll the children would be. Unfortunately, the existence of the QMSCO requirements makes this difficult to do. Also, there is no federal authorization for a uniform form so it is not clear whether HHS can actually issue one. On the issue of service, some states use regular mail while others require proof of service.
how long should the employer/insurer have to enroll the child. Some time frame is necessary so that the employer/insurer implements the order as quickly as possible. States have experimented with a variety of time periods.
what should the employer/insurer do if there is more than one plan in which the children can be enrolled. This is not an issue in ERISA situations as the QMCSO must explicitly designate the plan in which the children are to be enrolled. However, in other situations, some guidance may be needed. A common statutory approach is to notify the employer/insurer that if more than one option is available, the children should be enrolled in the non-custodial parent's plan unless that plan does not provide coverage which is accessible to the child. In that case, the employer is to enroll the child in the least expensive plan under which he/she can be covered.
Another important issue is the payment of any required premiums. Some--but not all employers--offer family coverage at no cost to their employees. In this case, there is no premium problem. Sometimes employers offer family coverage at some cost to its employees and the non-custodial parent has a second family for whom he/she has already obtained this family coverage. In most cases additional children can be added to an existing plan without affecting the premium. So, again once the child is enrolled, there is no problem about premiums.
Frequently, however, the non-custodial parent has not obtained family coverage and the employer does require its employee to contribute to the cost of family coverage. In that case, not only must the child be enrolled but also premiums for the insurance must be deducted from the non-custodial parent's paycheck. If the non-custodial parent voluntarily enrolls the children and authorizes the deduction of the premium, there is no problem. However, if the employers plan requires payment of premiums in order to obtain coverage, and the non-custodial parent doesn't voluntarily enroll the children and authorize the deduction of premiums from wages, the issue of premiums has to be addressed. Congress dealt with this issue also in the 1993 legislation discussed above. It required states to enact laws requiring employers doing business in the state to withhold the non-custodial parent's share of premiums for the coverage and pay the insurer.
One limitation is that the total amount withheld for support (be it cash or medical) can not exceed the limits imposed by the Consumer Credit Protection Act (CCPA). If it does, the employer needs some guidance on how to proceed. Some states have done this in their state statutes. Massachusetts, for example, allows the IVD agency to serve the employer with an order covering cash support, arrears, and health insurance. The employer is required to implement the order. If the employee objects because the CCPA limits are exceeded, then a hearing officer can adjust the arrearages to keep within the limits.
Related to the premium issue is the choice of plan in which to enroll the child. If only one plan is available, then the choice and its attendant premium is simple. If more than one plan is available, however, things are a bit more complicated. Some states have addressed this issue by directing the employer to enroll the children in whichever plan the non-custodial parent is already enrolled in if it would also provide coverage to the child. If the non-custodial parent is enrolled in a plan that does not cover dependents, then the employer is directed to enroll the children in the least expensive available plan which meets certain basic standards.
As is obvious from this description, enforcing a medical support order is not an easy task. Ideally, to get orders which help children swiftly in place and to make the process as painless as possible for employers, enforcement of medical support orders should be fully integrated into the enforcement of cash support orders through income withholding.
With few exceptions, since October of 1990, states have been required to implement immediate wage withholding in all new or modified IVD orders. This means that an income withholding order is entered at the same time as the new/modified support order and is then sent to the employer. The order is accompanied by a notice which tells the employer how much to withhold and where to send the money. Right now, there is no federal requirement that states integrate this notice with a notice to the employer about any health insurance coverage that the non-custodial parent has been ordered to provide. Some states, however, have attempted to integrate the two procedures. Massachusetts, for example, has develped a four-part form which covers both cash and health insurance issues. Of particular importance, Massachusetts' child support guidelines allow a credit toward the obligor's child support obligation for insurance premiums paid. If the premiums are not paid, then the cash child support obligation is increased to reflect this. By combining the cash and medical support orders in one document, the IVD agency can instruct the employer so that if the premium changes, the cash order can also be changed.
However, most states have not so thoroughly integrated their cash and medical support systems. One reason for this was that cash income withholding orders--both immediate orders and orders on which there were arrears-- had to be implemented in such a way as to allow the non-custodial parent 45 days to challenge the order before it was actually implemented. It made no sense to hold up the health insurance order pending this 45 day period. This problem has been addressed in the PRWORA of 1996. The new law clarifies that the non-custodial parent does not have to be notified that withholding is going to be commenced or given time to challenge the withholding. He/she will now be entitled to notice that withholding has commenced and told how to mount a post-commencement challenge. Thus implementation of a health insurance order coupled with a cash withholding order would not have to wait for the expiration of the 45 day challenge period.
Of equal importance is the need for both issues to be addressed in the same standardized notice to employers. The PRWORA of 1996 gives the Secretary of HHS the opportunity to do this. She is required to issue both a standardized format for the income withholding notice which goes to employers and forms for use in interstate income withholding. Proposed forms for use in interstate withholding have now been issued, and these forms do include provisions relating to medical support. If the forms is not altered as a result of the comment process, this could greatly facilitate the imposition of medical support obligations in interstate cases.
Step 5. Follow up Once the Employer Puts the Coverage in Place
Whether the child is voluntarily enrolled by the non-custodial parent or involuntarily enrolled by the IVD agency, the coverage will do no good unless the custodial parent knows what benefits are and are not available and has access to claim forms. Moreover, the custodial parent needs the freedom to file claims directly with the insurer so that there will be no delay in reimbursement. In addition, state law needs to authorize that reimbursement go directly to the custodial parent or service provider or the state Medicaid agency (if appropriate). This both makes the reimbursement process less cumbersome and eliminates any temptation a non-custodial parent might have to pocket the reimbursement rather than pass it on to the custodial parent or provider.
With this in mind, as a further condition of approval of their Medicaid plans, states must have in place laws requiring insurers to provide benefits information and claims forms to the custodial parent, and permit the custodial parent (or service provider with the custodial parent's permission) to submit claims for services without first obtaining the non-custodial parent's signature. All states need to be sure that such laws are now in place.
Further, the child support order and/or the notice from the IVD agency to the employer or insurer should clearly state that the custodial parent is to be given information and claim forms, that claims must be processed when signed by that parent, and that reimbursement is to be made directly to the custodial parent, provider, or Medicaid agency as appropriate.
Step 6. Keep Coverage in Place Whenever Possible.
The final enforcement issue is keeping the coverage in place. To prevent children from being disenrolled from a plan once they are covered, Congress added a final state law requirement. Again, in order to have an approvable state Medicaid plan, a state must certify that it has enacted laws prohibiting employers from eliminating a child's coverage unless the employer :
eliminates family health coverage for all of its employees; or
receives satisfactory written evidence that the court or administrative order is no longer in effect;. or
receives satisfactory written evidence that the child is or will be enrolled in a comparable plan no later than the effective date of disenrollment.
Likewise, insurers (including HMOS , PPOS and ERISA Plans) must keep the child on the plan until they receive satisfactory written evidence that the court/administrative order is no longer in effect or the child is enrolled in another comparable plan.
States need to be sure that such laws are in place and that employers and insurers are routinely notified that they cannot eliminate a child's health insurance coverage unless the order is no longer in effect or they have received proof that the child is enrolled in another plan.
Step 7. Pay Special Attention to Federal Government Employees
When employees of the executive (including the military), legislative and judicial branches are counted, the largest single employer in the country is the federal government. Virtually all federal employees have access to group health insurance coverage. Given these facts, one would expect that federal employees would be a high priority group for medical child support enforcement activities by IVD agencies. To date, however, this has not been true.
Since the enactment of Title IVD of the Social Security Act, it has contained provisions relating to enforcement of the support obligations of federal employees. Until recently, these requirements were both very cumbersome and not enthusiastically approached by those responsible for their implementation. In an effort to change this, in 1995, President Clinton issued Executive Order 12953. Under his authority as head of the Executive Branch, the President required all federal agencies-- including the Armed Services-- to cooperate fully in efforts to establish paternity and child support orders and to enforce the collection of child and medical support.
The Executive Order also required federal agencies to annually publish a list of agents for service of process of child support orders; cooperate with the Federal Parent Locate Service and provide them with accurate, timely and complete information: and annually cross-match federal employees with the list of delinquents submitted to IRS for the purpose of the federal tax offset program. In addition, the Executive Order charged the Office of Personnel Management and HHS to come up with a set of recommendations on how to improve in a number of areas, including "changes that would be needed to ensure that federal employees comply with child support orders that require them to provide health insurance coverage for their children."
The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 further strengthens these efforts. It replaces the old law with a new streamlined version. This new version became effective in February 1997. Under it:
federal employees will be subject to the same income withholding procedures as employees of private employers.
each federal agency will designate an agent for service of process in matters relating to child support and will annually publish the title, address and phone number of that agent in the Federal Register.
any such agent who is served with an order regarding a non-custodial parent's child support obligation must 1)within 15 days notify the non-custodial parent in writing that the order has been served; and 2) within 30 days comply with the order.
the term "child support" is defined to include health care required to be paid under an administrative or court judgment, decree or order whether temporary or final.
This new legislation, coupled with the still operative provisions of the Executive Order, should create a climate in which federal entities are more enthusiastic partners than they have been in the past. It should also make it possible for this goodwill to be translated into results. Putting all of this together, whenever it appears that a non-custodial parent is a federal employee, the IVD agency should use the FPLS to obtain information about available coverage. Any order obtained or modified should require the non-custodial parent to place the children on the available policy. If the non-custodial parent does not do so, then the appropriate agent should be served with the medical support order. Within 30 days, the children should be placed on the policy.
One cautionary note applies if the non-custodial parent is in the military. Dependents of members of the military can obtain health care at military installations or through the Civilian Health and Medical Program of the Armed Services (CHAMPUS). Before accessing either coverage, the child must be determined to be a military dependent and be enrolled in the Defense Enrollment Eligibility and Reporting System (DEERS).
In order to enroll a child in DEERS, the IVD agency must provide a "verifying official" at an enrollment site (the nearest military base, recruiting station, or military facility) with the child's birth certificate/paternity determination and the child support order. The "verifying official" is the person designated as such at each site. Under current practice, the "verifying official" will try to contact the non-custodial parent and encourage him/her to process the necessary paperwork. If the non-custodial parent refuses to do so, then the verifying official will sign it and enrol the child. There are no specific time frames for these activities.
These practices are not completely consistent with the PRWORA provisions discussed above which 1) while providing for notice to the non-custodial parent that service has occurred, do not contemplate giving him/her an opportunity to do anything; and 2) require compliance with the order by the federal agency within thirty days. Given this, procedures may change in the near future. IVD agency officials need to keep abreast of any changes in this regard.
INCREASING OPPORTUNITIES FOR NON-CUSTODIAL PARENTS TO OBTAIN HEALTH INSURANCE COVERAGE FOR THEIR CHILDREN Step 1. Enact State Laws Requiring Groups Which Offer Dependant's Coverage to Include All of the Employees Children.
Until recently, some insurers would only provide dependant's coverage to marital children and/or children who actually lived with the covered employee. This put potentially available coverage out of reach for children whose parents were not married and those whose parents had separated or divorced.
To deal with this problem, in 1993, Congress enacted legislation requiring states to certify in their Medicaid plans that they had enacted laws which prohibit employers and insurers from denying enrollment to a child in the health coverage of the child's parent on the ground that the child:
was born outside marriage.
is not claimed as a dependent on the parent's federal income tax return.
does not reside with the parent .
does not reside in the insurer's service.
"Insurer" is defined to include ERISA plans, health maintenance organizations, and entities offering a service benefit plan. Thus, the scope of the law is very broad: any group insurance plan must offer coverage for non-marital children and children whose parents are separated or divorced regardless of their living situation or tax dependency status. States must certify in their Medicaid state plan that they have enacted such laws.
Unfortunately, many states have been slow to enact and implement the state insurance laws required by this provision. Greater effort needs to be made to get these laws in place and enforce them.
Step 2. Expand the Availability of Low-Cost Health Insurance for Children So That Non-Custodial Parents Can Obtain Such Coverage.
Many non-custodial parents do not have access to any health insurance. Others can access insurance for themselves, but have an employer who does not provide dependent's benefits. Still others can access dependent's insurance but it is not particularly useful to their children. Another group has access to coverage but cannot afford the premiums. In these cases, the children are left without private insurance coverage. Some will be able to obtain Medicaid, but many will not, either because their family income is above the Medicaid cut-off or they are older children not yet covered under the Medicaid expansion.
To address this issue, a few places are experimenting with offering lower premium, private health insurance in conjunction with their IVD systems. One of these programs is described in detail below. Other states may wish to replicate this idea as it holds some promise for covering children who would otherwise be without health insurance.
In addition to this approach, many states have put in place (or are now developing) more general programs to provide private health insurance for uninsured children. Typically, these programs charge premiums to families with income above the poverty level (generally on a sliding scale) and have small co-payments for at least some services. Thus, while these "child-only" programs are usually affordable, there are some costs associated with them. Nonetheless, they are considerably less costly than private insurance and might provide an avenue through which non-custodial parents could obtain health insurance for their children at a reasonable cost.
Another possibility is a partnership between the child support agency and a state program offered or being developed to cover not just children, but all moderate income uninsured persons. To date, it does not appear that any state has thoroughly explored the possibilities of these approaches in either designing or implementing their efforts to expand coverage for the uninsured. Below are some thoughts about how this might be done.
Child Support Agency-Specific Approaches
Sacramento County, California has designed and implemented The IVD Kids Program. The local IVD agency (in this case the District Attorney's office) negotiated with Kaiser Permanente and Blue Shield to offer two different private insurance plans which have a maximum premium of $80 per month per child. Both plans offer well baby care, physicals, immunization, vision and hearing tests, diagnostic x-ray and lab tests, outpatient and inpatient physician visits, access to specialists, hospital emergency as well as inpatient and outpatient care, home health nursing and therapy, medical equipment, mental health and substance abuse treatment, and prescription drugs. There are some limited co-payments for some services.
When a child is in the Sacramento County IVD system and the court has ordered the non-custodial parent to provide health insurance, that parent can enroll the child in this alternative program if he/she 1)does not have access to employment-related dependent's coverage; 2) has access to such coverage but it is too costly; 3) has access to coverage but the services are not available in the geographic area where the child resides; or 4) is self-employed and does not have access to an affordable group plan. Non-custodial parents are asked to bring information about potential health insurance coverage to the hearing at which their child support order is entered or modified. If they do not do so, they are ordered to enroll the children in IVD Kids. If the non-custodial parent is at the hearing, he/she chooses which of the two available plans to use. If not, then the court chooses the plan.
In the case of those who are employed, to insure that the premium is paid, a wage assignment order is issued. In the order, the employer is told to withhold the premium and pay the money to a designated Third Party Administrator (TPA). If the cash support plus the insurance premium exceed 50 percent of the employees wages, the employer is told to first pay the health insurance premium and pay the balance to the IVD agency as cash support. The TPA then wires the premiums to the carrier. The TPA also collects eligibility information, facilitates enrollment, and provides pertinent data to the carriers. This makes the program have low administrative cost from the carriers point of view and thus makes it more attractive to them.
In the case of the self-employed, the non-custodial parent is ordered to pay the monthly premium directly to the TPA. The TPA then provides the same services as it does for employed parents. To minimize any problems with lapsed premiums, the IVD agency has a warning system to follow up on situations where the premium is more than 15 days late. There is then a 30 day period to correct the problem. If the premium is not paid (e.g. the non-custodial parent looses his job and is unable to pay), the custodial parent is informed and given the option of paying the premium him/herself so that coverage can continue.
Other states or localities may well want to consider adopting a similar model. One caveat from the Sacramento experience is that the program generated considerable Medicaid savings as children were either moved from Medicaid to private insurance or, in the case of children still eligible for Medicaid, private insurance paid for services which Medicaid would normally have funded. These savings were not reinvested in the IVD Kids program. If the savings had been reinvested, they could have been used to underwrite the administrate costs of the program and the IVD costs associated with establishing and enforcing medical support order and other IVD services. Others may want to specifically address the reinvestment issue when they design programs.
Integration with State's New or Existing Child-Only Health Insurance Programs
Rather than designing a specific IVD-linked program, another possibility would be to integrate IVD cases more fully into existing state efforts to create "child-only" private health insurance coverage to children in families with limited means who are not eligible for Medicaid. In about half of the states, there has been some attempt to do this. Many of these efforts are still modest, but many are growing. Typically, these "child only" programs have started small and expanded both the scope of services provided and the size of the eligible population. Many are now financed through cigarette taxes. This allows the cost of the premium to be completely subsidized for the poorest families while imposing affordable premiums or co-payments on those with somewhat higher incomes.
In the states and localities experimenting with this approach, children in the IVD system may already be eligible for coverage but have not actually been enrolled in the program: or they may be enrolled and the custodial parent is bearing the full cost of the premiums and co-payments without any help from the non-custodial parent: or, there may be a waiting list for entry into the program due to funding constraints. In these situations, the IVD agency could:
identify cases where the children are not eligible for Medicaid and the non-custodial parent does not have access to group health insurance for them.
seek a new or modified child support order that requires enrollment of the children in the state's child-only program .
have the non-custodial parent ordered to pay or share the costs associated with the coverage.
include the premium cost in the basic child support order, collect the payment as usual (e.g. through income immediate withholding) and pay the premium to the administrator of the child-only plan.
treat the plan administrator like any other plan administrator for purposes of enrolling the children and providing information and claim forms to the custodial parent.
In situations where there is a waiting list for enrollment in the plan but the non-custodial parent has the ability to pay the full premium (or the parents are able to share the cost on a pro rata basis), the state might adopt a policy of allowing automatic enrollment since there would be no state subsidy involved.
For example, one of the first "child-only"efforts-- called the Caring Program of Western Pennsylvania-- was launched in Pittsburgh in 1984. It originally involved a partnership between the community and Blue Cross Blue Shield. Civic groups, business, foundations and churches donated funds to a pool which then paid the cost of premiums for the children's coverage. The program was so successful that it was expanded statewide and currently provides coverage to 60,000 children. The $730 a year premium is financed by a two-cent per pack cigarette tax as well as donations from the community. Children in families with income below 185 percent of poverty are eligible for enrollment. Services include child visits, immunizations, primary care for illness and accidents, emergency services, laboratory and x-ray services, dental care, vision and hearing services, prescription drugs (with a $5 co-pay), mental health care and hospitalization. Pennsylvania-- and the 22 other states/localities operating similar Caring Programs-- could adopt the recommendations listed above and make the benefits of the programs available to income eligible children for whom child support orders are being obtained or modified. If there was a waiting list at the time, then the state could allow enrollment of children whose parents were able to fully pay the yearly premium.
New York also operates a child-only called Child Health Plus which makes subsidized coverage available on a sliding fee scale to families with no other coverage and incomes under 222% of poverty. The mandated benefits package includes well-child care; immunizations; x-ray and lab tests; surgery; inpatient hospital care and home visits in lieu of hospitalization; diagnosis and treatment of accident, illness and injury; emergency care; prescription drugs; outpatient mental health services and treatment for alcoholism and substance abuse; short-term therapeutic services such as chemotherapy, radiation and hemodialysis; durable medical equipment; occupational and physical therapy; diabetic supplies and education; and nutritional supplements. The program was recently expanded to allow an additional 150,000 children to participate and now covers teens between 15 and 18 for the first time.
Families with incomes below 120 percent of poverty pay no premium. For those with incomes between 120 and 159 percent of poverty the premium is $9 per month per child up to a maximum of $36 per month; for those with incomes between 160 and 222 percent of poverty the premium is $13 per month per child up to a maximum of $52 per month. Those with incomes above 222 percent of poverty can also enroll by paying the full premium cost. By adopting the steps outlined above, New York might well be able to expand health insurance coverage for children in the IVD system and make payment for such coverage more equitable by making sure that non-custodial parents help meet the premium costs.
Another interesting approach is Florida's Healthy Kids Program. It differs from the approaches discussed above in that it uses enrollment in a county's school system as the basis of eligibility for coverage. Children attending school in sixteen counties and their younger siblings can enroll if they are uninsured and not eligible for Medicaid. Counties choose to offer the program and are required to fund at least five percent of the budget. The rest of the financing comes from the state and particpant premiums. Premiums are charged on a sliding fee scale depending on the child's participation in the school lunch program. Those eligible for a free lunch pay between $5 and $10 per month; those eligible for reduced price lunch pay about $15 per month; those who pay full price for lunch pay somewhat more than $15 per month.
They receive a package of services comparable to those available under Medicaid through a local HMO. There are also small co-payments for some services. If interested in this approach, the IVD agency could form a partnership with the school district and the county to start such a program, identify children in the IVD system whose parent's had an obligation to provide health insurance for them and enter/modify orders in those cases to make sure the children could take advantage of the potential coverage.
Integration with Other State Health Insurance Programs
Where child-only programs are not available, other options may exist. For example, in the late 1980's, Minnesota has launched a program called MinnesotaCare which provides coverage to all uninsured Minnesotans who are ineligible for Medicaid but have family incomes below 275% of poverty. Additional eligibility criteria includes no access to employer-subsidized coverage for 18 months, having been uninsured for 4 months, and permanent residence in Minnesota. The service package is fairly broad and families pay a premium for coverage. The premium is based on a sliding scale percentage of gross family income. The premium still makes insurance available at well below market rates. Minnesota could clearly integrate this program with its child support program, enroll eligible children, calculate the applicable premium, and add it on to the basic child support order.
Some Issues to Consider
The Medicaid program is in the midst of profound change. In the near future, it may offer coverage to fewer children or curtail the services available. At the very least, the changes incorporated in the PRWORA of 1996 will decrease the likelihood that poor, disabled or immigrant children will receive coverage. At the same time, there is growing interest in expanding health insurance coverage for uninsured children outside the Medicaid system. To date, there has been little discussion of how these changes affect the child support system and its obligation to obtain health insurance coverage for children. This paper offers some preliminary thoughts on the subject. Clearly, however, more work needs to be done. Issues include:
the types of coverage available. Will the package of benefits available through IVD-specific or child-only programs be broad enough to meet the needs of children or will Medicaid coverage still be preferable for those who can obtain it?
can co-payments be kept low enough to allow children to access the services or will they be a barrier even if the non-custodial parent is paying the premium?
what effect will this have on child support guidelines? In order to obtain health insurance will children receive less cash support? If so, who should decide whether the trade off is worth it: the custodial parent, the non-custodial parent, the IVD agency?
These issues need to be addressed now in a thoughtful way by all the affected parties.
1. CHILDREN'S DEFENSE FUND, CHILD HEALTH FACT SHEET, p.1 (January 17, 1997) [Hereinafter CDF Fact Sheet].
3. Laura Summer, Sharon Parrott, and Cindy Mann, MILLIONS OF UNINSURED AND UNDERINSURED CHILDREN ARE ELIGIBLE FOR MEDICAID, Center on Budget and Policy Priorities (1997), p.4.
4. CDF Fact Sheet, supra n.1.
5. Prior to the passage of the Personal Responsibility and Work Opportunity Act of 1996, children receiving public benefits (AFDC) automatically received Medicaid. However, the new law decouples the two programs. In the future, Medicaid eligibility will not automatically flow from public benefits eligibility (Temporary Assistance for Needy Families).
6. CDF Fact Sheet, supra n.1.
U.S. BUREAU OF THE CENSUS, CURRENT POPULATION REPORTS, CHILD SUPPORT FOR CUSTODIAL MOTHERS AND FATHERS: 1991, SERIES P60-187 (1995) [Hereinafter Census Report].
8. See, e.g., S.13, 105th Cong., 1st Sess. (1997) and S. 525 and 526, 105th Cong., 1st Sess. (1997) . The latter bill called the Children's Health Insurance and Lower Deficits (CHILD) legislation has gained bi-partisan support from prominent Senators such as Kennedy (D-Mass.) and Hatch (R-Utah).
9. Census Report, supra n.7, p.8, Table C.
10. The Census Bureau collects data by custodial parent, not by child. A little over half of custodial parents have one child, 31 percent have two children, and about 16 percent have three or more children. Thus, in using Census Bureau numbers to estimate the potential number of children affected, the number is always higher than the number of custodial parents. Since over 800 thousand custodial parents had a medical support order which was not enforced, a "guesstimate" of about one million children seems reasonable.
11. Census Report, supra n.9.
12. 42 USC Sections 651 et. seq.
13. Id. Section 654(4) as amended by P. L. 104-193, Section 301, 104th Cong. 2d Sess. (1996). In Fiscal year 1995, over 20 million cases were handled by this system.
14. A 1992 General Accounting Office study estimated that the states and the federal government could save at least $122 million a year in Medicaid costs if non-custodial parents provided health insurance that is actually available to them through their employment to their children. U.S. GENERAL ACCOUNTING OFFICE, MEDICAID: ENSURING THAT NON-CUSTODIAL PARENTS PROVIDE HEALTH INSURANCE CAN SAVE COSTS, GAO/HRD-92-80, (1992).
15. P. L. 104-193, supra n. 13.
16. Id. Section 114 which makes those who met the state's AFDC eligibility criteria in July of 1996, eligible for Medicaid even if they are not eligible for TANF, to be codified at 42 USC Section 1331(b). This will ameliorate the problem for some, but not all children.
17. For an excellent discussion of this issue see, Summer, Parrott, and Mann, supra n.3.
18. Each year a new group of children are phased in so that by 2002, all children under age 19 whose family income is below 100 percent of poverty will be covered.
19. P. L. 104-193, supra n.13.
20. To be codified at 42 USC Section 666(a)(2)(c)(1)(C). The exact penalty is up to the state. In implementing this provision, states should provide stiff penalties for failure to provide information in a timely manner.
21. To be codified at 42 USC Section 653(a)(2).
22. 42 USC Section 654(24).
23. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, AUTOMATED SYSTEMS FOR CHILD SUPPORT ENFORCEMENT: A GUIDE FOR STATES, p.III-66, Objective E-11 (1993) [Hereinafter Computer Specs].
24. 45 CFR Section 303.100(a)(10).
25. See, e.g., MICH. COMP. LAWS Section 722.717(5) which requires support orders entered for non-marital children to require that each parent keep the court informed about available health care coverage (whether through employment or otherwise and the policy, certificate or contract number) and MICH.COMP. LAWS Section 522.16(4) which creates the same obligation for parents of non-marital children.
26. In this monograph, the emphasis is on health insurance. However, it should be noted that all of the recommendations herein also apply to dental insurance and state statutes would do well to mention this type of insurance as well. See, e.g., NEW MEX.STAT.ANN. Sections 40-4C-1 et. seq.
27. 42 USC Section 652(f).
28. 45 CFR Section 303.31(a)(2).
29. Id. Section 303.31(a)(1).
30. Id. Sections 303.30(a)(7) and 303.30(b)(2).
31. See, 45 CFR Section 302.80. See, also 45 CFR Section 303.31. The only exception to this is when a family not receiving public assistance or Medicaid uses the IVD system and specifically declines to have the agency pursue medical support. Id. Section 303.31(c)(2).
32. 42 USC Section 666(a)(10).
33. 45 CFR Section 303.8(a)(3)(ii).
34. Id. Sections 303.31(b)(3) and (c)(2).
35. Id. Sections 303.8(d)(3), 303.31(b)(4) and 303.31(c)(2).
36. 42 USC Section 667. Congress asked the states to develop guidelines in 1984, but failed to specify that these guidelines had to be used. To correct this omission, the 1988 legislation made it clear that the guidelines were to be employed in setting and modifying orders.
37. 45 CFR Section 302.56(c)(3).
38. See, e.g., OHIO REV. CODE Section 3111.241(B)(9). Ohio sets up a process for administrative agencies to equitably allocate medical costs when neither parent has access to group health insurance and requires those parents to inform the IVD agency when and if such insurance does become available.
39. 45 CFR Sections 303.31 (b)(2) and 303.1 (c)(2). As a complement to this, in 1989, the regulations governing the development of each state's child support guidelines required that those guidelines address how the parties would "provide for the children's healthcare needs, through health insurance coverage or by other means." 45 CFR Section 202.56(c)(3). Thus, if health insurance is not available, some other means of dealing with the issue (e.g., sharing of actual costs) is to be provided.
40. Id. Federal law makes it clear that employers/insurers do not have to enroll a child who is not otherwise eligible for coverage so there will be occasions (e.g. the child has a pre-existing medical condition which makes him ineligible under the terms of the plan) when a child cannot access otherwise available coverage, 42 USC Sections 1396g(2)(A) and 1396g(3)(A).
41. COMMITTEE ON WAYS AND MEANS, UNITED STATES HOUSE OF REPRESENTATIVES, 1996 GREEN BOOK, WMCP 104-14, 104th Cong., 2d Sess., Table 9-17, pp. 608-609.
42. Id. Those states are Alabama, Delaware, District of Columbia, Florida, Illinois, Indiana, Kentucky, Mississippi, New York, Ohio, Puerto Rico, Virgin Islands, West Virginia, Wisconsin and Wyoming.
43. P. L. 104-193, Section 382, supra n.13, to be codified at 42 USC Section 666(a)(19) [emphasis added].
44. To be codified at 42 USC Section 666(a)(10).
45. To be codified at 42 USC Section 666(a)(10)(A)(I)(I). The change is that the state agency does not have to make a "best interests of the child" determination in deciding whether or not to seek a modification for a child receiving public assistance under Title IVA.
46. To be codified at 42 USC Section 666(a)(10)(A)(I)(II).
47. To be codified at 42 USC Section 666(a)(19).
48. To be codified at 29 USC 1169(a)(2)(B). ERISA plans must now honor orders issued through administrative process established by the state so long as the orders have the force and effect of law.
49. 29 USC Section 1169(a)(3).
50. Id. Section 1169(a)(4).
For a more detailed discussion of the art of drafting a QMSCO, see Shulman, QUALIFIED MEDICAL CHILD SUPPORT ORDERS: The New QDRO for Health Care, 8 American Journal of Family Law 49 (1994).
52. It is also worth noting that federal automation requirements also contemplate that states will have access to information about changes in the non-custodial parent's insurance situation instantaneously. 42 USC Sections 652(16) and 654(24). If the order has to then be amended, the whole purpose of automation is undercut.
53. P. L. 104-193, Section 382, supra n.13, to be codified at 42 USC Section 666(a)(19). Oddly, there is an exception to the requirement that the employer enroll the children for cases where the non-custodial parent contests. Since the requirement that the children be enrolled is contained in a child support order, it is hard to see why the non-custodial parent should be given the opportunity to object. It is also unclear where and how the parent can object. Certainly, he/she should be able to go to the court or administrative agency which entered the order. But this statute seems to contemplate that the objection would be made to the employer. Hopefully, federal regulations will deal with this problem.
54. A bill making technical corrections to the PRWOA is currently in Subcommittee in the House of Representatives. At this time, the bill has no ERISA provisions. That could change so some of the problems identified herein might be addressed by Congress this year.
However, at this time, that appears unlikely.
55. 42 USC Section 1396(a)(60).
56. Id. Section 1396g(a)(1).
57. Id. Section 1396g(b) defines "insurer" to include ERISA plans.
58. See, e.g., MICH. COMP. LAWS Section 552.626a(1); W.VA.CODE Section 33-15-4 and 33-16-10; WISC. STAT. ANN. Section 632.897(10)(a). The Wisconsin statute also specifies that the employer cannot set a different premium for children who do not live with the covered parent; are not claimed as dependents for tax purposes; and are non-marital or live outside the insurer's geographical area than the premium set for other children.
59. Id. Section 1396g(a)(3)(A).
60. Id. Section 1396g(a)(2)(A).
61. For an example of a state statute in this area, see MICH. COMPILED LAWS Section 21054w (1)(a).
62. Computer Specs, supra n.23.
63. 42 USC Section 1396g(a)(3)(B).
64. Id. Section 1396g(a)(2)(B).
65. Id. Section 1396g(b).
66. Custodial parents can also seek to have the children enrolled directly under these provisions.
67. For examples of states which give non-custodial parents the opportunity to act before the state can move to enforce a health insurance order see NEW MEXICO STAT. ANN Section 40-4C-5; OHIO REV. CODE Section 3111.241(B)(1); and MINN. STAT. Section 518.171(3).
68. Compare IDAHO CODE Section 32-1216(2)(a) (requiring service by certified mail) with OHIO REV. CODE Section 3211.241(D) ( allowing service by regular mail).
69. Idaho gives the employer 30 days, IDAHO REV. CODE 32-1216 (3). Massachusetts, by contrast, requires enrollment on receipt of the order, MASS. GEN. LAWS ch. 119A, Section 12(d).
70. See, e.g., IDAHO CODE Section 32-1216(3)(c); and RHODE ISLAND GEN. LAWS Section 15-5-16.2.5.
71. 42 USC Section 1396g(a)(3)(D).
73. MASS. GEN. LAWS ch. 119A, Section 12(e)(2).
74. See, e.g., NEW MEXICO STAT. ANN. Section 40-4C-6A.
75. 42 USC Sections 666(a)(1) and 666(b)(3)(A). The exceptions are when both parents agree in writing to an alternate arrangement and when one of the parties demonstrates (and the court or administrative agency entering the order agrees) that there is "good cause" for not entering into such an order, Id. Sections 666(b)(3)(A)(I) and (ii).
76. 45 CFR Section 303.100(f).
77. P. L. 104-193, Section 314, supra n.13, to be codified at 42 USC Section 666(b)(4)(A). See also, id. to be codified at 42 USC Section 666(b)(11).
78. Some states have already recognized the importance of this issue and have allowed the simultaneous issuance of cash and medical support orders to employers. See, e.g., MD. CODE and ANN. FAMILY LAW Section 12- 102(d)(1); and WIS. STAT. Section 767.25(c)(2).
79. P. L. 104-193, Section 314, supra n.13, to be codified at 42 USC Section 666(b)(6)(A)(ii).
80. Id. Section 324, to be codified at 42 USC Section 652(a)(11). These forms were to be developed by October 1 ,1996 and states were required to begin using them by March 1, 1997. Id. Section 324, to be codified at 42 USC Section 654(9)(E).
81. 62 Fed. Reg. 9193, February 28, 1997.
82. Some of the larger employers do object to having cash and medical support dealt with in the same order and will likely push for the proposed form to be changed. The problem is that in some companies payroll and benefits are handled separately and the offices may not even be in the same state. As a result, one order covering both issues served on the payroll department would require them to forward the order to the unserved benefits office. The employers do not want to be responsible for this communication.
83. If a non-custodial parent pockets reimbursements and the Medicaid agency has funded the service, that parent's income can be garnished and his/her state income tax refund intercepted, 42 USC Section 1396g(a)(6).Unfortunately, this is only available in Medicaid cases.
84. Id. Section 1396g(a)(5).
85. Id. Section 1396g(a)(3)(C).
86. Id. Section 1396g(b).
87. See 42 USC Section 659 (providing for garnishment of monies due from the United States and the District of Columbia for purposes of enforcing child support obligations) , 42 USC Section 661 (designating the entities responsible for issuing regulations in this area) and 42 USC Section 662 (defining the terms used in Section 659).
88. 60 Fed. Reg. 11019 (Feb. 27, 1995).
89. Executive Order 12953, Section 101(b) [emphasis added]. The Executive Order is fully set out as a note to 42 USCA Section 659 (Supp. 1996).
90. Executive Order, supra n.90, Section 301(b).
91. Id. Section 303.
92. Id. Section 304.
93. Id. Section 402(a)(I).
94. P. L. 104-193, Section 362, supra n.13. In Subsection (a) of this Section, old 42 USC Section 659 is revised and updated, and in Subsection (b) old 42 USC Sections 661 and 662 are repealed.
95. P. L. 104-193, Section 362(d), supra n.13.
96. Id. Section 362(a), to be codified at 42 USC Section 659(a). In the past, it was not clear whether state laws implementing income withholding required by 42 USC Sections 666(a) and (b) were applicable to federal employees , so the law now makes it clear that they do.
97. To be codified at 42 USC Section 659(c)(1).
98. To be codified at 42 USC Sections 659(c)(2)(A) and 42 USC Section 659(c)(2)(C).
99. To be codified at 42 USC Section 659(I)(2).
100. OFFICE OF CHILD SUPPORT ENFORCEMENT, INFORMATION MEMORANDUM 96-02 (May 29, 1996).
102. 42 USC Section 1396g (a)(1).
103. Id. Section 1396g(b).
104. Id. Section 1396(a)(60).
105. This is particularly true in interstate cases and intrastate cases where the children live a long distance from their non-custodial parent. For example, a father in California may have dependents coverage through a local HMO, but if the children are living in Massachusetts, this won't do them much good.
106. For more information on this program see NATIONAL ASSOCIATION OF CHILD ADVOCATES, BEST PRACTICE PROFILES (Fall 1996) available from NACA, 1522 K Street NW, Washington, D.C. 20005 and THE CHILDREN'S PARTNERSHIP, NEXT GENERATION (January 1997) available from The Children's Partnership, 1460 4th Street, Suite 306, Santa Monica, Ca. 90401.
107. Currently, the premium is $79 for the Blue Shield Plan and $72 for Kaiser Permanente. Since the cost of adding a child to an employment-related group plan is about $200 a month in California, this represents a considerable savings to the parent.
108. This could occur in a new or modified order or when an existing order containing a requirement that the non-custodial parent provide health care coverage is transferred to the local IVD agency for enforcement.
109. The state estimates that by 1988, the program will have generated cumulative Medicaid savings of $5.3 million through revenue savings and cost-avoidance.
110. For an excellent up-to-date summary see CHILDREN'S INSURANCE PROGRAMS GAIN NEW POPULARITY IN STATE INITIATIVES, vol 22 (April 1997) available from the Alpha Center, 1350 Connecticut Avenue N.W., Suite 1100, Washington, D.C. 20036.
111. For a more detailed description of these and other efforts see Hill, Bartlett, and Brostrom, STATE INITIATIVES TO COVER UNINSURED CHILDREN, 3 Future of Children 141 (Summer/Fall 1993).
112. This might occur if the state had set a specific number of participants or if the state funds available to the plan were limited and already committed to the existing enrollees.
113. Similar programs now operate in twenty-two other states. See Auerbach, INSURING CHILDREN, Washington Post, Health Section, April 1, 1997, pp.10-13, at p.12. These states are Alabama, California, Georgia, Idaho, Iowa, Kansas, Louisiana, Maryland, Massachusetts, Michigan, Missouri, Mississippi, Montana, North Carolina, North Dakota, Ohio, Oklahoma, South Dakota, Texas, Utah, West Virginia and Wyoming.
114. There is, however, a waiting list and advocates hope to see an additional 1 cent a pack tax increase on cigarettes to finance expansion to more children. See, NATIONAL ASSOCIATION OF CHILD ADVOCATES, STATE DEVELOPMENTS IN HEALTH CARE (Fall 1996) pp.3-4, available from the National Association of Child Advocates, 1522 K Street NW, Washington, D.C. 20005.
115. For a recent description of the program see Auerbach, supra n.112.
116. It might also be possible to waive the income limit to allow coverage of children who cannot otherwise access insurance and whose parent(s) wished to enroll them in the program and pay the premium.
117. Massachusetts has recently expanded its child-only program the Children's Medical Security Plan (CMSP) which covers children not eligible for Medicaid. In that state, there has been cooperation between the health department and the IVD agency for some time so it is likely that an integrated approach will emerge here as well.
118. Eventually, the county must pick up 40 percent of the cost but this commitment is phased in over time.
119. The Florida legislature recently authorized an expansion of this program so that 48,000 children can be covered this year.
120. Texas and New Hampshire are also interested in the Healthy Kids model. However, where the school district and the county are not co-extensive, this approach can be difficult, and some other unit (eg., health district) may have to be used.
121. Other states that have similar plans include Hawaii, Tennessee, Oregon and Washington.