[Federal Register Volume 64, Number 219 (Monday, November 15, 1999)]
[Proposed Rules]
[Pages 62074-62087]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-29401]
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DEPARTMENT OF HEALTH AND HUMAN SERVICES
Office of Child Support Enforcement
RIN 0970-AB97
45 CFR Part 303
National Medical Support Notice
AGENCY: Office of Child Support Enforcement (OCSE), Administration for
Children and Families, HHS.
ACTION: Notice of Proposed Rule Making.
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SUMMARY: This proposed regulation implements provisions of the Child
Support Performance and Incentives Act of 1998 (CSPIA), Public Law 105-
200, that require State child support enforcement agencies, under title
IV-D of the Social Security Act (the Act), to enforce the health care
coverage provision in a child support order, and to use the National
Medical Support Notice (NMSN) to aid enforcement.
DATES: Consideration will be given to written comments received by
January 14, 2000.
ADDRESSES: Address comments to: Administration for Children and
Families, Department of Health and Human Services, 370 L'Enfant
Promenade, SW., Washington DC 20447. Attention: Division of Policy and
Planning, Office of Child Support Enforcement. Comments will be
available for public inspection Monday through Friday, 8:00 A.M. to
4:30 P.M. on the fourth floor of the Department's offices at the
address mentioned above.
FOR FURTHER INFORMATION CONTACT: John Seneta, Division of Policy &
Planning, OCSE, tel: (202) 401-5154, fax: (202) 401-3444, e-mail:
jseneta@acf.dhhs.gov
SUPPLEMENTARY INFORMATION
Statutory Authority
This notice of proposed rulemaking is published under the authority
of sections 452(f) and 466(a)(19) of the Social Security Act (the Act),
42 U.S.C. 652(f) and 666(a)(19), as amended by section 401 of the Child
Support Performance and Incentive Act of 1998 (CSPIA), Public Law 105-
200, and technical amendments in section 4(b) of the Noncitizen Benefit
Clarification and other Technical Amendments Act of 1998, Public Law
105-306.
Section 401(b)(4) of CSPIA requires the Secretaries of Health and
Human Services (HHS) and Labor to publish interim regulations providing
for the NMSN not later than 10 months after the date of enactment of
CSPIA. The date of enactment was July 16, 1998 and 10 months from that
date is May 16, 1999. The Medical Child Support Working Group asked to
be involved in the development of the notice prior to the original
publication due date. In the interest of developing a proposed Notice
that best addresses the needs and concerns of the affected parties, DOL
and HHS solicited comments and suggestions regarding the Notice from
the Working Group at its public meetings of April 13, and May 12 and
13, 1999, that proved very helpful in the development of the Notice
that is proposed herein. In order to encourage greater public
participation in this rulemaking and reduce the possibility of
confusion, the agencies have decided to publish the Notice as a
Proposed Rule, rather than as an interim regulation. We believe that
this more closely comports with congressional intent to permit the
affected parties, including the Working Group, to comment on the Notice
before it becomes effective.
Also being published in the Federal Register today is a parallel
proposed regulation developed by the Department of Labor (DOL) under
section 609(a) of the Employee Retirement Income Security Act of 1974
(ERISA) (29 U.S.C. 1169(a)), adopting the NMSN. Under ERISA section
609(a)(5)(C), if the NMSN is appropriately completed, and satisfies the
conditions of ERISA section 609(a)(3) and (4), the NMSN is deemed to be
a ``qualified medical child support order'' as defined in section
609(a) of ERISA.
In this regulation, OCSE is implementing the provisions of CSPIA
that require States to have in effect laws that require procedures to
enforce the health care coverage provisions in child support orders
through the use of the NMSN. The NMSN notifies the noncustodial
parent's employer of the provision for health care coverage of the
child in a IV-D case.
Background
The enactment of the Child Support Enforcement Amendments of 1984,
Public Law 98-378, added a new section 452(f) to the Act that required
the Secretary to issue regulations to require State IV-D agencies to
secure medical support information, and to secure and enforce medical
support obligations whenever health care coverage is available to the
noncustodial parent at a reasonable cost. Initially these regulations
were placed in Subpart B at 45 CFR 306.50 and 51. Subsequently they
were redesignated and placed where they appear now at 45 CFR 303.30 and
31. Since the enactment of this legislation and the implementing
regulations, States have been making efforts to establish and enforce
medical support for children with limited success.
The Omnibus Budget Reconciliation Act of 1993 (OBRA), Public Law
103-66, was a significant piece of legislation that contained
provisions intended to remove some of the impediments to State IV-D
agency attempts to secure and enforce medical coverage for children in
IV-D cases. OBRA contained many improvements that facilitated obtaining
and enforcing medical coverage, including: prohibiting discriminatory
health care coverage practices; creating ``qualified medical child
support orders'' (QMCSOs) to obtain coverage from group health plans
subject to ERISA; and allowing employers to deduct the costs of health
insurance premiums from the employee/obligor's income. Some of the
medical support provisions of OBRA were included as Medicaid State plan
requirements under section 1908 of the Act [42 U.S.C.1396g-1] and
required States to enact laws governing employer and insurer compliance
with health care provisions of support orders. The QMCSO provisions are
contained in section 609 of ERISA (29 U.S.C. 1169).
Section 382 of the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 (PRWORA), Public Law 104-193, added a new
paragraph 19 to section 466(a) of the Act (466(a)(19)) that requires a
provision for health care coverage in all child support orders
established or enforced by IV-D agencies. Prior to enactment of PRWORA,
health care coverage was required for cases with an assignment of
medical support rights for public assistance cases under titles IV-A,
XIX, and IV-E, and, by regulation, individuals not receiving public
assistance could choose not to seek medical support. Despite improved
medical support requirements (such as procedures for including health
care coverage in all child support orders under title IV-D) and a focus
on enforcement of medical support by OCSE and the State IV-D programs,
the enforcement of medical support coverage for children under the IV-D
program has remained elusive.
Extensive consultations with State IV-D agencies, employers, HHS,
DOL, and advocates of medical support coverage, resulted in an array of
medical support provisions in CSPIA. These provisions were enacted in
order to further eliminate barriers that prevent meaningful
establishment and enforcement of medical child support coverage.
In addition to the requirements that are contained in this
regulation, CSPIA
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provides for the establishment of a Medical Child Support Working
Group. The Working Group is charged with submitting a report to the
Secretaries of Health and Human Services and Labor containing
recommendations regarding appropriate measures to address impediments
to the effective enforcement of medical support by IV-D agencies. This
report is due not later than January 2000. The Secretaries in turn will
jointly submit a report to Congress not later than two months after
receiving the Working Group's report. The Working Group includes 30
members representing: HHS and DOL, State child support directors, State
Medicaid directors, employers (including payroll professionals),
sponsors and administrators of group health plans (as defined in
section 607(1) of ERISA), children potentially eligible for medical
support, such as child advocacy organizations, State medical child
support programs, and organizations representing State child support
programs.
Section 401 of CSPIA modified section 452(f) of the Act to make it
consistent with the requirement in section 466(a)(19) of the Act, as
amended by section 382 of PRWORA, that medical support be included as
part of any child support order under title IV-D of the Act. Section
401 of CSPIA further strengthens the enforcement of medical support
coverage for children by requiring HHS and DOL to jointly develop a
NMSN to be issued by States to enforce the medical support obligations
of a non-custodial parent. The NMSN must comply with requirements of
section 609(a)(3) and (4) of ERISA, which pertain to informational
requirements and restrictions against requiring new types or forms of
benefits. In addition to complying with ERISA requirements and all
title IV-D requirements, the NMSN must include a severable employer
withholding notice informing the employer of: (1) applicable provisions
of State law requiring the employer to withhold any employee
contributions due under any group health plan in connection with
coverage required to be provided; (2) the duration of the withholding
requirement; (3) the applicability of limitations on any such
withholding under title III of the Consumer Credit Protection Act; (4)
the applicability of any prioritization required under State law
between amounts to be withheld for purposes of cash support and amounts
to be withheld for purposes of medical support, in cases where
available funds are insufficient for full withholding for both
purposes; and (5) the name and telephone number of the appropriate unit
or division to contact at the State agency regarding the NMSN.
We believe that employers will welcome the use of a standard form
that will be used by all State IV-D agencies as required in these
regulations. This will simplify processing for all concerned and most
importantly enhance health care coverage for children who are excluded
from their noncustodial parent's group health plan.
Section 466(a)(19) of the Act, as amended by section 401(c)(3) of
CSPIA, requires States to have in effect laws requiring the use of
procedures providing for IV-D agencies to use the NMSN to enforce child
support orders which include a provision for the health care coverage
of the child. Section 466(a)(19)(B) of the Act requires the use of the
NMSN in all cases where the noncustodial parent is required to provide
health care coverage for the child pursuant to the order and the
noncustodial parent's employer is known to the State agency. The
statute provides an exception, under section 466(a)(19)(B), to using
the NMSN if a court or administrative order stipulates alternative
health care coverage to the noncustodial parent's employment-based
coverage.
Under section 466(a)(19)(B)(i), States must use the NMSN to
transfer notice of the provision for health care coverage of the child
to employers, including State or local governments and churches.
Section 466(a)(19)(B)(ii) requires the employer within 20 business days
after the date of the NMSN, to transfer the NMSN, without the employer
withholding notice, to the appropriate plan which provides health care
coverage for which the child is eligible.
Upon notification by the plan administrator(s) that enrollment of
the child(ren) has been completed and withholding is required for
employee contributions to one or more plans under this notice, the
employer implements the withholding from the employee's income. The
employer withholds employee contributions within the limitations on
withholding in accordance with the amounts allowed by the State of the
employee's principal place of employment (which may equal or be less
than that allowed by the Federal Consumer Credit Protection Act (15
U.S.C., section 1673(b)), or the amounts allowed for medical support by
the child support order whichever is less. The employer also observes
the State law of the employee's principal place of employment for
prioritization purposes if withholding is required for both cash and
medical support payments.
Section 466(a)(19)(B)(iii) of the Act requires, in cases where the
noncustodial parent is a newly hired employee, that the State agency
send the NMSN, together with the income withholding notice pursuant to
section 466(b) of the Act, within 2 business days after the date the
newly hired employee is entered into the State Directory of New Hires,
pursuant to section 453A of the Act.
Under section 466(a)(19)(B)(iv) when the employment of a
noncustodial parent with any employer who has received an NMSN is
terminated, the employer is required to notify the State IV-D agency of
this termination. Finally, under paragraph (C), any liability of a
noncustodial parent employee to a group health plan for contributions
necessary for enrollment of a child is subject to appropriate
enforcement, unless the employee contests such enforcement based on a
mistake of fact.
States must implement use of the NMSN no later than the first day
of the first quarter beginning after the close of the first regular
State legislative session that begins after October 1, 2001. This
deadline provides States ample opportunity to enact implementing State
legislation after publication of final regulations, issuance of the
Medical Child Support Working Group's recommendations, and the
Secretaries' report to Congress.
Description of Regulatory Provisions
We are implementing the statutory requirement for the development
and use of the NMSN by adding a new section, 45 CFR 303.32, ``National
Medical Support Notice,'' to existing rules governing the Child Support
Enforcement program under title IV-D of the Act. This section restates
statutory requirements.
Section 303.32(a) requires the State to have laws requiring
procedures for the mandatory use of the NMSN in accordance with section
466(a)(19) of the Act.
Section 303.32(b) provides for an exception to the use of the NMSN.
The exception applies to cases with court or administrative orders that
stipulate alternative health care coverage.
Section 303.32(c) includes the mandatory procedures for enforcement
of health care coverage for the child through the use of the NMSN.
Section 303.32(c)(1) requires State IV-D agencies to use the NMSN
to provide notice of the provision for health care coverage of the
child(ren) to employers.
[[Page 62076]]
Section 303.32(c)(2) requires State agencies to send the NMSN to
the employer within 2 business days after the date of entry into the
State Directory of New Hires of an employee who is an obligor in a IV-D
case.
Section 303.32(c)(3) requires employers to transfer the NMSN to the
appropriate group health care plan providing any such health care
coverage for which the child(ren) is eligible (excluding the severable
employer withholding notice directing the employer to withhold any
mandatory contributions to the plan) within 20 business days after the
date of the NMSN.
Section 303.32(c)(4) requires employers to withhold any mandatory
employee contributions to the plan and send any employee contributions
withheld directly to the plan. If the employee contests such
withholding, we are proposing that employers initiate withholding until
such time as the employer receives notice that the contest is resolved.
Employers are specifically directed to transfer contributions to
the plan because employers may also be directed by a separate child
support withholding notice to forward support payments withheld from
the employee's wages to a State IV-D agency.
Section 303.32(c)(5) requires employers to notify the State agency
promptly whenever the employment of a noncustodial parent for whom the
employer received an NMSN is terminated. This is consistent with the
requirement for notification of termination in income withholding cases
pursuant to 45 CFR 303.100(e)(1)(x).
To comply with statutory requirements, section 303.32(d) requires
laws requiring the use of the NMSN to be enacted by States. The
requirements for NMSN use must be effective the later of October 1,
2001 or the effective date of implementing State law. Such State laws
must be effective no later than the first day of the first calendar
quarter beginning after the first session of the State legislature that
begins after October 1, 2001. For States that have 2-year legislative
sessions, each year of such session would be regarded as a separate
regular session.
Description of the National Medical Support Notice
In the development of this notice, we involved the Medical Child
Support Working Group. The Working Group provided substantive comments,
recommendations for changes, and a changed format that will be easy to
follow by all parties concerned.
A State IV-D agency will issue a two part NMSN to an employer who
maintains or contributes to a group health plan. Part A of the NMSN,
the Employer Withholding Notice, is modeled on the Federally-approved
standardized income withholding form that was issued to State IV-D
agencies by action transmittal (OCSE-AT-98-03) on January 27, 1998.
Employers have voiced approval of this form indicating that the
standardized uniform withholding form has greatly facilitated the
processing of child support income attachments.
Part A, the Employer Withholding Notice, includes information for,
and responsibilities of the employer. The ``Instructions to Employer''
segment of the form explains the responsibilities of the employer. The
issuing agency provides this information starting with the name and
address of the issuing agency, date of the notice, case number,
telephone number of the issuing agency, court name (if applicable),
date of the support order, and the support order number.
The issuing agency provides pertinent information with respect to
the employer, the employee/obligor, the custodial parent, and the child
or children also known as alternate recipients. The issuing agency
provides the employer's Federal EIN number (if known) and the
employer's name and address. Information on the employee/obligor is
also provided including the employee/obligor's name, social security
number, and mailing address. Information is provided on the custodial
parent, and the child or children (the children are also referred to as
alternate recipients). These include the names and address of the
custodial parent and children. If there is a danger of domestic
violence and abuse to the custodial parent and/or the children,
provision is made to substitute the address of the custodial parent and
children with name and address of an agency official. Finally, the
Notice includes a provision for the type of family group health care
coverage that is required by the order, e.g., basic, dental, vision,
prescription drug, mental health, and other.
The ``Employer Response'', attached to Part A, is to be completed
by the employer, as appropriate when either (1) the employer does not
offer or participate in plans providing family health care coverage or
the employee is among a class of employees that are not eligible for
family health coverage under any group health plan maintained by the
employer or to which the employer contributes, (2) coverage is
unavailable because the employee is no longer employed by the employer,
or (3) State or Federal withholding limitations and/or prioritization
preclude the withholding from the employee's income of the amount
necessary for coverage.
Under the proposed DOL regulation published today at FR Part B of
the NMSN, the Medical Support Notice, notifies the administrator of the
group health plan in which the named employee is enrolled or eligible
for enrollment, that the employee is obligated by a court or
administrative child support order to provide medical support coverage
for the named child(ren). Part B provides the information necessary for
the plan administrator to treat the notice as a ``qualified medical
child support order'' under section 609(a) of ERISA, and to enroll the
child(ren) as dependents in the group health plan. Part B of the NMSN
was also developed to comply with the requirements placed on group
health plans under State laws described in section 1908 of the Act, and
to accommodate the requirements on State agencies to use automated
processing of medical child support orders as well. Part B also
includes a ``Plan Administrator Response'' that is used by the plan
administrator to inform the Issuing Agency, that either the child has
been enrolled, or not enrolled with a reason, and other information
regarding coverage that is pertinent or lacking for enrollment. The
specific contents of Part B are explained in detail in the DOL
regulation published today.
In order to provide an opportunity for maximum review and public
comment on the National Medical Support Notice (NMSN), we have attached
the proposed NMSN (including instructions) as an Appendix. We will
revise this notice following the comment period on the NPRM and will
issue it to States through the ACF policy issuance system. We will not
re-publish this appendix as a part of the final rule. However, we will
make appropriate changes as a result of comments received.
Executive Order 12866
Executive Order 12866 requires that regulations be drafted to
ensure that they are consistent with the priorities and principles set
forth in the Executive Order. The Department has determined that this
proposed rule is consistent with these priorities and principles. The
changes in this proposed rule reiterate the language in the statute,
and do not add any nonstatutory requirements.
Regulatory Flexibility Analysis
The Regulatory Flexibility Act (Public Law 96-354) requires the
Federal
[[Page 62077]]
government to anticipate and reduce the impact of regulations and
paperwork requirements on small entities. The Secretary certifies that
this proposed rule will not have a significant economic impact on a
substantial number of small entities because the primary impact of
these regulations is on State governments.
Paperwork Reduction Act of 1995
Section 303.32(c)(1) contains an information collection
requirement. As required by the Paperwork Reduction Act of 1995 (44
U.S.C. 3507(d)), the Administration for Children and Families has
submitted a copy of this section to the Office of Management and Budget
(OMB) for its review.
Title: National Medical Support Notice.
Summary: The information collected by State title IV-D
agencies will be used to complete the National Medical Support Notice
(NMSN) which will be sent to employers of employee/obligors and used as
a means of enforcing the health care coverage provision in a child
support order. Primarily, the information State agencies will use to
complete the NMSN will be the information regarding appropriate persons
which is necessary for the enrollment of the child in employer related
health care coverage, such as the employee/obligor (name, SSN, mailing
address); employer's name/address; the name/address of the Alternate
Recipient who is the child; and the custodial parent's name and
address. The employer forwards the second part of the NMSN to the group
health plan administrator which contains the same individual
identifying information. The plan administrator requires this
information to determine whether to enroll the Alternate Recipient in
the group health plan. If necessary, the employer would also initiate
wage withholding from the employee's wages for the purpose of paying
premiums to the group health plan for enrollment of the child.
Description of the likely respondents: State and local
title IV-D agencies initiate the process of enforcing medical health
care coverage for the child by completing and sending the notice to
known employers of the noncustodial parents (employee/obligors).
Employers and plan administrators are on the receiving end of the NMSN.
Information collection........................................ (\1\)
Number of respondents......................................... 54
Responses per respondent...................................... 13,454
Average burden hours per response............................. .1666
---------
Total annual burden hours................................. 123,507
\1\ 45 CFR 303.32.
ACF will consider comments by the public on this proposed rule in:
Evaluating the accuracy of ACF's estimate of the burden of
the proposed collections of information, including the validity of the
methodology and assumption 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 this interim final regulation 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
regulation. Written comments to OMB for the 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: Ms. Wendy Taylor.
Unfunded Mandates Reform Act of 1995
Section 202 of the Unfunded Mandates Reform Act of 1995 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.
If a covered agency must prepare a budgetary impact statement,
section 205 further requires that it select the most cost effective and
least burdensome alternative that achieves the objectives of the rule
and is consistent with the statutory requirements. In addition, section
203 requires a plan for informing and advising any small governments
that may be significantly or uniquely impacted by the rule.
We have determined that the rule will not 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. Accordingly,
we have not prepared a budgetary impact statement, specifically
addressed the regulatory alternatives considered, or prepared a plan
for informing and advising any significantly or uniquely impacted small
governments.
Congressional Review
This rule is not a major rule as defined in 5 U.S.C., Chapter 8.
List of Subjects in 45 CFR Part 303
Child support, Grant programs/social programs, Reporting and
recordkeeping requirements.
(Catalog of Federal Domestic Assistance Program No 93.563, Child
Support Enforcement Program)
Dated: July 14, 1999.
Olivia A. Golden,
Assistant Secretary for Children and Families.
Approved: August 3, 1999.
Donna E. Shalala,
Secretary, Department of Health and Human Services.
For the reasons discussed above, we are proposing to amend 45 CFR
chapter III as follows:
PART 303--STANDARDS FOR PROGRAM OPERATIONS
1. The authority citation of part 303 continues to read as follows:
Authority: 42 U.S.C. 651 through 658, 660, 663, 664, 666, 667,
1302, 1396a(a)(25), 1396(d)(2), 1396b(o), 1396b(p) and 1396(k).
2. A new 303.32 is added to read as follows:
Sec. 303.32 National Medical Support Notice.
(a) Mandatory State laws. States must have laws, in accordance with
section 466(a)(19) of the Act, requiring procedures specified under
paragraph (c) of this section for the use of the National Medical
Support Notice (NMSN) to this section, to enforce the provision of
health care coverage for children of noncustodial parents who are
required to provide health care coverage through an employment-related
group health plan pursuant to a child support order and for whom the
employer is known to the State agency.
(b) Exception. States are not required to use the NMSN in cases
with court or administrative orders that stipulate alternative health
care coverage to employer-based coverage.
(c) Mandatory procedures. The State must have in effect and use
procedures that require:
(1) The State agency to use the NMSN to transfer notice of the
provision for health care coverage of the child(ren) to the employer.
(2) The State agency to send the NMSN to the employer within 2
business days after the date of entry of an employee who is an obligor
in a IV-D case in the State Directory of New Hires.
[[Page 62078]]
(3) Employers to transfer the NMSN to the appropriate group health
plan providing any such health care coverage for which the child(ren)
is eligible (excluding the severable employer withholding notice
directing the employer to withhold any mandatory employee contributions
to the plan) within 20 business days after the date of the NMSN.
(4) Employers to 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. If the employee contests
such withholding, the employer initiates withholding until such time as
the employer receives notice that the contest is resolved.
(5) Employers to notify the State agency promptly whenever the
noncustodial parent's employment is terminated in the same manner as
required for income withholding cases in accordance with
Sec. 303.100(e)(1)(x) of this part.
(d) Effective date. This section is effective October 1, 2001, or,
if later, the effective date of State laws described in paragraph (a)
of this section. Such State laws must be effective no later than the
close of the first day of the first calendar quarter that begins after
the close of the first regular session of the State legislature that
begins after October 1, 2001. For States with 2-year legislative
sessions, each year of such session would be regarded as a separate
regular session.
Note: The following appendix will not appear in the Code of
Federal Regulations.
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[FR Doc. 99-29401 Filed 11-12-99; 8:45 am]
BILLING CODE 4184-01-C
