June 2000 June 2000

The Medical Child Support

Working Group’s

Report to

The Medical Child Support

Working Group’s

Report to
Working Group Members and Staff

Medical Child Support Working Group Report Page i 

Medical Child Support

Working Group

Membership List

U.S. Department of Labor: 

♦ Robert J. Doyle, Director of 

Regulations and Interpretations, Pension 

and Welfare Benefits Association, 

Co-Chair 

♦ David Lurie, Office of Regulations and 

Interpretations, Pension and Welfare 

Benefits Association 

♦ Susan E. Rees, Staff Attorney, Plan 

Benefits Security Division, Office of the 

Solicitor 

U.S. Department of Health and 

Human Services: 

♦ David Gray Ross, Commissioner, 

Office of Child Support Enforcement, 

Co-Chair 

♦ Paul Legler, Assistant Commissioner, 

Office of Child Support Enforcement 

♦ Rachel Block, Deputy Director, Center for 

Medicaid and State Operations, Health 

Care Financing Administration 

♦ Linda Mellgren, Senior Social Science 

Analyst, Office of the Assistant Secretary 

for Planning and Evaluation 

State IV-D Directors and Medical 

Child Support Programs: 

♦ Sallie H. Hunt, Commissioner, Bureau of 

Child Support Enforcement, Health and 

Human Resources, West Virginia 

♦ Richard Harris, Director, Division of 

Child Support Enforcement, Department 

of Human Services, Mississippi 

♦ Lee Sapienza, Chief of Policy and 

Planning, Division of Child Support 

Enforcement, New York 

♦ Gaye L. McQueen, Child Support 

Enforcement Officer, Department of 

Social and Health Services, Washington 

State Medicaid/SCHIP Directors: 

♦ Mary C. Fontaine, Director, Benefit 

Coordination & Recoveries, Medicaid, 

Massachusetts 

♦ Kay M. Keeshan, Director, Third Party 

Division, Medicaid, Alabama 

♦ Robert D. Stampfly, Director, Managed 

Care Support Division, Medical Services 

Administration, Michigan 

Employers and Human Resource and 

Payroll Professionals: 

♦ Anthony J. Knettel, The ERISA Industry 

Committee 

♦ Cornelia Gamlem, Society for Human 

Resource Management 

♦ Rita Zeidner, American Payroll 

Association 

♦ Theodore R. Earl, Jr., John Hancock, Inc. 

Plan Administrators and Plan 

Sponsors of Group Health Plans: 

♦ Elizabeth Ysla Leight, Society of 

Professional Benefit Administrators 

♦ Howard Bard, National Coordinating 

Committee for Multi-Employer Plans 

♦ Terry Humo, Association of Private 

Pension & Welfare Plans 

♦ Lela Foremen, Communication Workers 

of America, AFL-CIO 

♦ Ellen (Nell) Hennessy, Actuarial Sciences 

Associates, Inc/American Bar Association 

Child Advocacy Organizations: 

♦ Nancy E. Ebb, Children’s Defense Fund 

♦ Paula Roberts, Center for Law and Social 

Policy 

♦ R. Ann Fallon, Attorney at Law, Whiting, 

Fallon & Ross 

♦ S. Kay Farley, National Center for State 

Courts 

♦ Jeffrey M. Johnson, Ph.D., National 

Center for Strategic Non-Profit Planning 

& Community Leadership 

♦ Cristina B. Firvida, National Women’s 

Law Center 

Organizations Representing State 

Child Support Programs: 

♦ Kelly D. Thompson, National Child 

Support Enforcement Association – 

resigned 

♦ Ruth Bell Clark, National Child Support 

Enforcement Association 
Working Group Members and Staff

Page ii Medical Child Support Working Group Report 

Working Group Staff

Samara Weinstein, Executive Director 

U.S. Department of Health and 

Human Services 

Office of Child Support Enforcement 

♦ Beverly Bunn 

♦ Andrew J. Hagan 

♦ Stephanie Epps 

♦ Susan Notar 

♦ Nehemiah Rucker 

Health Care Financing Administration 

♦ Marlene Jones 

♦ Sue Knefley 

Office of the Assistant Secretary for 

Management and Budget 

♦ Libbie Buchele 

♦ Audrey Smolkin 

♦ Caroline Washburn 

Office of the Assistant Secretary for 

Planning and Evaluation 

♦ Jennifer C. Pruszynski 

♦ Jennifer Tolbert 

U.S. Department of Labor 

Pension and Welfare Benefits 

Administration 

♦ Fred Wong 

♦ Ellen Goodwin 
Guide to Format of this Report

Medical Child Support Working Group Report Page iii 

!PRWORA 

Personal 

Responsibility and 

Work Opportunity 

Reconciliation Act 

Guide to Format of this

Report

!Chapters at a Glance 

The first page of each chapter contains a 

“chapter at a glance” box (see box for 

Chapter 1, page 1-1, as sample). This box 

lists the contents of the chapter, including 

page numbers, and presents the theme of the 

chapter. Although a detailed table of 

contents appears at the beginning of this 

Report, the list of contents at the beginning 

of each chapter will help readers locate 

sections in individual chapters quickly and 

easily. 

“”Quote Boxes 

Throughout the chapters, various quotes 

appear in quote boxes, as shown in the 

sample here. These quotes comment on and 

add to the discussion at hand. 

"Cross-References 

Cross-references to specific chapters, 

recommendations, and pages within this 

Report are highlighted in the margins as 

shown to the right. 

!Acronym Reminders 

While all acronyms are spelled out and 

defined in the list of acronyms at the 

beginning of this Report (see page v 

below), they are also spelled out and 

defined upon first usage. In addition, 

upon first use of an acronym in each 

chapter, an acronym reminder is provided in 

the margin as shown here. 

Recommendations

Recommendations are numbered in 

sequential order throughout the Report and 

are presented in boxes at the bottom of the 

sections in which they are discussed. The 

category/type of each recommendation 

appears in parentheses following the 

recommendation number. The body of the 

recommendation follows. A sample 

recommendation is shown at the bottom of 

this page. 

#Recommendation 1 (Federal Regulation)

The HHS should require each State to maximize the enrollment of children in 

appropriate health care coverage; the first recourse should be appropriate 

private coverage of either parent. (“Appropriate coverage” is defined in 

Recommendation 8.)

“Your task is, quite simply, to keep the 

kids in mind and to think broadly beyond

the scope of the work you all 

individually do to what's a good and 

workable solution to the issues that face 

you.... It's not just about the coverage; 

it's about better health outcomes for the 

people—for these kids.” 

~Kevin Thurm, Deputy Secretary, HHS 

# See page 

x for more 

information on.... 
Guide to Format of this Report

Page iv Medical Child Support Working Group Report 

$ Background Boxes 

Background information pertinent to the 

discussion at hand is presented in boxes, as 

shown in the sample to the right. 

% Definitions 

As necessary, selected terms or phrases are 

defined in the text in definition boxes, as 

shown in the sample below (“child supporteligible children”). These and additional 

definitions may also be found in the 

Glossary at the end of this Report. 

$ History of Federal Funding of the IV-D 

Program 

In 1950, without providing funding, Congress 

required welfare agencies to inform appropriate law 

enforcement officials when AFDC was furnished to 

a child who had been abandoned by a parent. The 

rationale was to encourage law enforcement 

officials to take action, including the filing of nonsupport proceedings against those who had 

abandoned their children.

% “Child Support-Eligible 

Children” 

As used in this report, child supporteligible children are children under the 

age of 19 whose parents are divorced, 

separated, or never-married (and not 

living together). Not all child supporteligible children live in single parent 

households, about 17 percent live in 

married step-parent families. In this 

report 21 million children living in 

single or stepparent households are 

considered to be eligible for child 

support. Additional child supporteligible children live with a related 

adult, a guardian or foster parent. Our 

data is not able to count these children. 

(See APPENDIX D: Health Care 

Coverage for Child Support-Eligible 

Children, page A-32). 
Guide to Format of this Report

Medical Child Support Working Group Report Page v 

Acronyms

AFDC Aid to Families with Dependent Children 

CCPA Consumer Credit Protection Act 

CSHN Children with Special Health Needs 

CSPIA Child Support Performance and Incentive Act of 1998 

COBRA Consolidated Omnibus Budget Reconciliation Act of 1985 

DOL Department of Labor 

HIPAA Health Insurance Portability and Accountability Act of 

1996 

HHS Department of Health and Human Services 

ERISA Employee Retirement Income Security Act of 1974 

FFP Federal Financial Participation 

GAO General Accounting Office 

HCFA Health Care Financing Administration 

HMO Health Maintenance Organization 

IV-D Program Federal/State Child Support Enforcement Program 

NAIC National Association of Insurance Commissioners 

NMSN National Medical Support Notice 

NPRM Notice of Proposed Rule Making 

OBRA ‘93 Omnibus Budget Reconciliation Act of 1993 

OCSE Federal Office of Child Support Enforcement 

OIG Office of the Inspector General 

PRWORA Personal Responsibility and Work Opportunity 

Reconciliation Act of 1996 

PLPW Poverty Level Pregnant Women Program 

PPO Preferred Provider Organization 

QDRO Qualified Domestic Relations Order 

QMCSO Qualified Medical Child Support Order 

SCHIP State Children’s Health Insurance Programs 

SDU State Disbursement Unit 

TANF Temporary Assistance for Needy Families 

TPA Third-party Contract Administrator 

UIFSA Uniform Interstate Family Support Act 

URESA Uniform Reciprocal Enforcement of Support Act 

WIC The Supplemental Feeding Program for Women, Infants 

and Children 

Acronyms Used in this Report 

The box below lists all of the acronyms used 

in this report. 
Table of Contents

Page vi Medical Child Support Working Group Report 

Table of Contents 

MEDICAL CHILD SUPPORT WORKING GROUP MEMBERSHIP LIST..........I 

GUIDE TO FORMAT OF THIS REPORT.................................................III 

PREFACE/COVER LETTER FROM CO-CHAIRS.......................................X 

EXECUTIVE SUMMARY......................................................................XI 

CHAPTER 1. LACK OF HEALTH CARE COVERAGE – HIGH RISK FOR 

CHILD SUPPORT-ELIGIBLE CHILDREN..............................................................1-1

CHILDREN’S HEALTH CARE COVERAGE IS CRITICAL ....................................................1-1 

There Is No Single Reason Why Children Do Not Have Health Care Coverage ....1-2

GOVERNMENT EFFORTS HAVE HELPED BUT MORE NEEDS TO BE DONE......................1-4 

CREATION OF THE MEDICAL CHILD SUPPORT WORKING GROUP ..................................1-7 

Legislative Mandate .................................................................................................1-8

ORGANIZATION OF THE REPORT..................................................................................1-10 

CHAPTER 2. PARTNERSHIP FOR A NEW MEDICAL CHILD SUPPORT 

PARADIGM..... .............................................................................................................2-1

INTRODUCTION..............................................................................................................2-1 

How Medical Support Enforcement Works (the Child Support Enforcement 

Perspective)..............................................................................................................2-2

Procedures Under Current Law for IV-D Implementation of Medical Support ..2-6 

How Medical Support Enforcement Works (the Employer and Plan Community 

Perspective)..............................................................................................................2-6

Current Law Employer and Plan Procedures Necessary for Implementation of 

Medical Support ...................................................................................................2-8 

PRIOR ASSUMPTIONS AND INADEQUATE SOLUTIONS.....................................................2-9 

ASSUMPTIONS FOR THE NEW MEDICAL SUPPORT PARADIGM .....................................2-17 

SUMMARY ...................................................................................................................2-20 

CHAPTER 3. TAKING THE FIRST STEP: ESTABLISHING HEALTH CARE 

COVERAGE IN CHILD SUPPORT ORDERS..........................................................3-1

STATE CHILD SUPPORT GUIDELINES .............................................................................3-1 

ROLE OF THE DECISION MAKER – ADMINISTRATIVE AGENCY, COURT, OTHER 

“TRIBUNAL”..................................................................................................................3-4 

Coverage Options – Need for Information...............................................................3-4

Decisionmaking Principles ......................................................................................3-6

Children with Special Needs ..................................................................................3-16

The Decision “Matrix” ..........................................................................................3-17

Establishment of Orders for Publicly-Funded or Other Alternative Health Care 

Coverage ................................................................................................................3-22

Public Payment for Private Coverage ................................................................3-23 

Role of the IV-D Agency.........................................................................................3-24

Enrollment Authority .........................................................................................3-25 
Table of Contents

Medical Child Support Working Group Report Page vii 

Contribution by the Noncustodial Parent ..............................................................3-26

Birthing Costs.........................................................................................................3-29

Apportioning Responsibility for Unreimbursed Health Care Expenses ................3-31

Drafting the Medical Support Provisions of a Child Support Order.....................3-34

CHAPTER 4. IMPLEMENTING A NEW TOOL: THE NATIONAL MEDICAL 

SUPPORT NOTICE AND RELATED ISSUES..........................................................4-1

NATIONAL MEDICAL SUPPORT NOTICE.........................................................................4-1 

Background ..............................................................................................................4-1

The Notice and ERISA..............................................................................................4-3

Domestic Violence Issues ....................................................................................4-4 

High-Volume Administrative Enforcement ..............................................................4-4

Timetable: NPRM, Final Rule, State Legislation.....................................................4-6

Overview of Notice...................................................................................................4-6

Working Group’s Discussion of the Notice..............................................................4-8

RECOMMENDATIONS OF THE WORKING GROUP ON MAKING THE NOTICE WORK BETTER

....................................................................................................................................4-10 

Program Implementation Issues.............................................................................4-10

COVERAGE FOR CHILDREN OF FEDERAL EMPLOYEES AND MILITARY PERSONNEL .....4-13 

CHAPTER 5. ANSWERING HARD QUESTIONS: PROVIDING GUIDANCE 

TO IV-D AGENCIES AND EMPLOYERS ON ENFORCEMENT ISSUES ..........5-1

INTRODUCTION..............................................................................................................5-1 

ENFORCEMENT OF HEALTH CARE PROVISIONS OF CHILD SUPPORT ORDERS ................5-2 

Enforcing Orders to Provide Family Health Coverage...........................................5-2

Enforcement Issues in Interstate Child Support Cases.........................................5-3 

Monitoring and Enforcing Custodial Parent’s Responsibility.................................5-4

CONSUMER CREDIT PROTECTION ACT (CCPA) LIMITS ................................................5-5 

Background ..............................................................................................................5-5

Applicability .............................................................................................................5-6

Amount of CCPA Limits...........................................................................................5-7

The Potential for Manipulating the CCPA Limits....................................................5-8

Health Care Coverage for the Child When the Withholding Limits are Breached..5-8

PRIORITY OF WITHHOLDING..........................................................................................5-9 

CHAPTER 6. MOVING TOWARDS SEAMLESS COVERAGE: IMPROVING 

COORDINATION AND COMMUNICATION AMONG PRIVATE AND PUBLIC 

HEALTH CARE COVERAGE ....................................................................................6-1

OUTREACH FOR MEDICAID AND THE STATE CHILDREN’S HEALTH INSURANCE PROGRAM

......................................................................................................................................6-3 

SCHIP BARRIERS .........................................................................................................6-4 

Crowd-Out Policies..................................................................................................6-4

Access to Health Care Coverage .............................................................................6-6

SCHIP/MEDICAID/IV-D INFORMATION EXCHANGE .....................................................6-8 

INCREASED EFFICIENCY IN THE COORDINATION OF PUBLIC AND PRIVATE COVERAGE6-12 

Automated Data Matches with Private Insurers....................................................6-13

Repeal Mandatory Pay and Chase.........................................................................6-14
Table of Contents

Page viii Medical Child Support Working Group Report 

ERISA ISSUES RELATED TO CHILDREN COVERED UNDER QMCSOS.........................6-17 

HIPAA and COBRA ...............................................................................................6-17

Circumstances Under Which Group Health Plans May Impose Preexisting 

Condition Exclusions..............................................................................................6-21

Coordination of ERISA Medical Child Support Provisions with Social Security Act 

Medical Child Support Provisions .........................................................................6-22

CHAPTER 7. THE QUESTION OF MONEY: PAYING FOR THE EXPANDED 

ROLE OF THE IV-D PROGRAM IN OBTAINING HEALTH CARE COVERAGE 

FOR CHILDREN...........................................................................................................7-1

INTRODUCTION..............................................................................................................7-1 

CURRENT IV-D FUNDING STRUCTURE..........................................................................7-3 

POLICY ISSUES RELATED TO IV-D FUNDING.................................................................7-4 

Enhanced Federal Financial Participation (FFP) ..................................................7-5

Medical Support Performance Incentive Measure...................................................7-6

Cross-Program Funding ........................................................................................7-10

CHAPTER 8. SHAPING THE FUTURE: STRATEGIES FOR ENSURING 

ONGOING IMPROVEMENTS ...................................................................................8-1

INTRODUCTION..............................................................................................................8-1 

FINDING NEW SOLUTIONS .............................................................................................8-2 

Using the New Hire Process to Collect Health Care Coverage Information ..........8-2

Learn More About What Works ...............................................................................8-4

Developing “Fill the Gap” Coverage......................................................................8-7

BETTER COORDINATION OF POLICIES AND PROGRAMS .................................................8-9 

Building Better Partnership for Health Policy Oversight......................................8-11

National Policy Coordination Group..................................................................8-11 

Federal Regulatory Coordination Group............................................................8-12 

Containing Health Care Cost.................................................................................8-13

Consumer Education and Preventive Health Care................................................8-13

REVIEW OF TAX POLICY..............................................................................................8-14 

CHAPTER 9. CONCLUSION/POSTSCRIPT ........................................................9-1

APPENDIX 

APPENDIX A: NEXT STEPS - LIST OF RECOMMENDATIONS ORGANIZED BY 

TYPE/CATEGORY.............................................................................................................. 1 

Federal Legislation ..................................................................................................... 1

Federal Regulation...................................................................................................... 6

Federal Guidance...................................................................................................... 10

Technical Assistance/Education................................................................................ 12

Best Practice ............................................................................................................. 14

Research and Demonstration.................................................................................... 18

Administrative Action................................................................................................ 21

APPENDIX B: GLOSSARY........................................................................................... 23 

APPENDIX C: LEGISLATION ........................................................................................ 28 

Legislative History of Major Medical Support Provisions ....................................... 28

APPENDIX D: HEALTH CARE COVERAGE FOR CHILD SUPPORT-ELIGIBLE CHILDREN. 32 
Table of Contents

Medical Child Support Working Group Report Page ix 

APPENDIX E: NATIONAL MEDICAL SUPPORT NOTICE ................................................ 37 

Technical Revision Recommendations...................................................................... 37

Technical Notice Comments...................................................................................... 39

Notice ........................................................................................................................ 44

APPENDIX F: WASHINGTON STATE MODEL NOTICE OF RELEASE FORM .................... 55 

APPENDIX G: MEETING SCHEDULE ........................................................................... 56 

APPENDIX H: MODEL JOINT MEDICAID/SCHIP APPLICATION FORM......................... 59 
Preface/Cover Letter

Page x Medical Child Support Working Group Report 

Preface/Cover Letter from

Co-Chairs

At a time when children’s health care 

coverage is the focus of much national 

attention, children who grow up in divorced, 

never-married, or separated families are at a 

greater risk than other children of not having 

health care coverage. Children without 

coverage have substantially less access to 

critical health care services, which are 

essential for their well-being and 

productivity. 

Although the child support enforcement 

program has been increasingly successful in 

obtaining health care coverage for children, 

changes in the labor market, family 

structure, health care delivery systems, and 

social welfare policy require new 

approaches to ensure that children obtain 

appropriate coverage—public and/or private. 

Recognizing the complexity of the issues 

involved and the willingness of interested 

parties to work together, Congress directed 

the joint establishment of the Medical Child 

Support Working Group by the Secretaries 

of Health and Human Services and Labor. 

The charge of the Working Group, which is 

comprised of thirty members who represent 

the broad range of interested and affected 

parties, was to submit a report to Secretary 

Shalala and Secretary Herman identifying 

the impediments to the effective 

enforcement of medical child support, and 

recommending solutions to these 

impediments. The Working Group’s Report 

is an important step in our efforts to increase 

health care coverage for these children. 

The recommendations contained in this 

Report establish a new model for the 

medical support enforcement system that 

puts the needs of children first. The goal in 

implementing this new model is to increase 

the number of children with private health 

care coverage and, for children who cannot 

obtain appropriate private coverage, to 

increase their enrollment in publicly-funded 

health care coverage. 

We appreciate the commitment of the 

members of the Working Group in their 

efforts to ensure that children in this nation 

are not without health care coverage merely 

because their parents do not reside together, 

and we look forward to working with our 

partners to make this new vision of medical 

support a reality. 

David Gray Ross 

Commissioner, 

Office of Child Support 

Enforcement, 

Administration for 

Children and Families, 

HHS 

Robert J. Doyle 

Director of 

Regulations & 

Interpretations, 

Pension & Welfare 

Benefits 

Administration, DOL 
Executive Summary

Medical Child Support Working Group Report Page xi 

Executive Summary

Opening

For a child, health care is critical. Yet, in 

the United States today, there are close to 

over 10 million children without health care 

coverage. For children who grow up in 

divorced, separated, or never-married 

families, the risk of not having health care 

coverage is great. Of the 21 million children 

who are eligible for child support 

enforcement services, approximately 3 

million are without health care coverage. 

These children have substantially less access 

to health care services, including preventive 

care that ensures childhood immunizations, 

vision and hearing screening, and dental 

care. Health care services are also far more 

likely to be delayed due to cost. Unmet 

health care needs reduce a child’s ability to 

grow into a healthy and productive adult. 

There is no single reason why children do 

not have the health care coverage they 

require. Children, particularly those 

impacted by the consequences of a family 

breakup, have not been held harmless from 

large societal changes: the rising cost of 

health insurance, the move towards new 

health insurance models (such as Health 

Maintenance Organizations) that limit 

service area and choice of provider, changes 

in the labor market, the transformation of the 

American welfare system, and changes in 

family structure. 

Over time, the Federal and State 

governments have responded to the need for 

health care coverage for children in two 

ways. First, they have created publiclysubsidized programs such as Medicaid and, 

most recently, the State Children’s Health 

Insurance Program (SCHIP). Both 

programs are need based, primarily serving 

families with incomes under 200 percent of 

poverty. Second, the establishment and 

enforcement of medical child support was 

added to the responsibilities of the national 

Child Support Enforcement Program 

established under Part D, Title IV of the 

Social Security Act. States are required to 

include provisions for health care coverage 

in State child support guidelines and the 

IV-D program is required to pursue private 

health care coverage when such coverage is 

available through a noncustodial parent at a 

reasonable cost. 

Over the past five years a number of 

legislative changes have strengthened 

medical child support enforcement and 

removed some of the impediments to 

providing children with health care 

coverage. The Omnibus Budget 

Reconciliation Act of 1993 (OBRA ’93) 

created the Qualified Medical Child Support 

Order (QMCSO) and required State laws 

that prohibit insurers from discriminating in 
Executive Summary

Page xii Medical Child Support Working Group Report 

the provision of health insurance when 

children are born out of wedlock or are 

outside the insurer’s service area. The 

Personal Responsibility and Work 

Opportunity Reconciliation Act of 1996 

(PRWORA) required a provision for health 

care coverage in all child support orders and 

directed the child support enforcement 

agency to notify an employer of the 

noncustodial parent’s medical child support 

obligation. 

Despite such reforms, getting and keeping 

health care coverage for child supporteligible children remains complicated and 

resource intensive. New strategies and 

policies are required to make the system 

easier and more cost effective for parents, 

employers, health care plan administrators 

and the government. The goal is both to 

gain access to better coverage for more of 

these children and ensure health care 

coverage for all. 

Medical Child Support Working

Group -CSPIA & Charge

Congress recognized the scope of the 

problem and the eagerness of various sectors 

to address these issues by creating the 

Medical Child Support Working Group as 

part of the Child Support Performance and 

Incentive Act of 1998 (CSPIA). Jointly 

established by the Secretary of Health and 

Human Services and the Secretary of Labor, 

the Working Group was charged with 

identifying barriers to effective medical 

support enforcement and developing 

recommendations that address the following 

six areas: 

♦ Assess the National Medical Support 

Notice 

♦ Identify the Priority of Withholding 

from an Employee’s Income, Including 

Medical Support Obligations 

♦ Coordinate Medical Child Support with 

Medicaid/SCHIP 

♦ Examine Alternates to a Medical 

Support Model Focused Exclusively on 

the Noncustodial Parent’s EmployerProvided Health Plan 

♦ Evaluate the Standard for “Reasonable 

Cost” in Federal Law 

♦ Recommend Other Measures to 

Eliminate Impediments to Medical 

Support Enforcement 

Working Group Membership -

Represents Wide Range Of

Sectors

The Working Group is a powerful example 

of very different worlds coming together, 

learning each other’s languages, developing 

a greater understanding of legitimate 

competing concerns, and reaching consensus 

on real solutions to complex issues. 

The Working Group includes thirty 

members with representatives from the U.S. 

Department of Labor (DOL), the U.S. 

Department of Health and Human Services 

(HHS), State IV-D Child Support Directors 
Executive Summary

Medical Child Support Working Group Report Page xiii 

and State Medical Child Support Programs, 

State Medicaid Directors and SCHIP 

programs, employers, including small 

business, trade or industry representatives 

and human resource and payroll 

professionals, plan administrators and 

sponsors of group health plans, child 

advocacy organizations, and organizations 

representing State child support programs. 

The Working Group’s greatest challenge 

was balancing the concerns and interests of 

the various stakeholders—Federal 

representatives, State IV-D/Child Support 

Enforcement, State Medicaid and SCHIP, 

employers, insurers, plan administrators, 

child advocates, private attorneys, and 

representatives of the courts. 

Working Group’s Principles

The Working Group met eight times since 

its first meeting in March 1999 and came to 

consensus on 76 recommendations. Based 

on testimony and research, the Working 

Group formulated a package of 

recommendations with children in the 

center, based on the idea that the system and 

structure should work toward what is best 

for the child. The Working Group was 

guided by a set of principles, including: 

Increase the Number of Children 

in Single-Parent Households with 

Health Care Coverage 

It is in the best interest of both children and 

the nation that the maximum number of 

children have access to health care coverage. 

Lack of such coverage affects children’s 

current and future health and their ability to 

become productive citizens. 

Appropriate Private Health Care 

Coverage Comes First 

Parents share primary responsibility for 

meeting their children’s needs. When one or 

both parents can provide comprehensive, 

accessible, and affordable health care 

coverage that coverage should be provided 

to the child. To the maximum extent 

possible, public dollars through enrollment 

in Medicaid/SCHIP should not replace 

private insurance but rather should serve as 

the payer of last resort where private health 

care coverage is unaffordable, unavailable, 

or not comprehensive enough. Public 

coverage is not intended to relieve able 

parents of their responsibility to provide 

health care for their children. 

Both Parents are Responsible for 

Medical Support – Preference to 

the Custodial Parent (if all is 

equal) as the Source 

Coverage available to both parents should be 

considered in setting a medical support 

obligation. Twenty-seven States recognize 

that both parents may have access to private 
Executive Summary

Page xiv Medical Child Support Working Group Report 

insurance and direct the decision maker to 

consider both parents as a potential source. 

However, nearly half of the States’ child 

support guidelines do not direct the decision 

maker to consider coverage available to the 

custodial parent and, as a result, children 

may be missing out on potential coverage. 

These recommendations change the child 

support enforcement’s medical support 

focus, which is now almost exclusively on 

the noncustodial parent. 

Affordable Coverage 

In deciding whether to pursue coverage, the 

cost of coverage is an important 

consideration. However, the current Federal 

definition of “reasonable” health 

insurance—that it is available through an 

employer—is not necessarily reasonable. 

The Working Group explored alternative 

State and Federal definitions, including the 

SCHIP guidance that the cost of SCHIP 

premiums should not exceed five percent of 

a family’s gross income, and the applicable 

Consumer Credit Protection Act (CCPA) 

limits. The recommendations address 

concerns that the cost of private health care 

coverage could significantly lower the 

amount of cash support available to meet the 

child’s basic needs and the child is eligible 

for some other form of health care coverage. 

Accessible Coverage 

When private health care coverage is 

available to a child, the child support 

enforcement agency should consider the 

geographic accessibility of covered services 

before it decides to pursue the coverage. 

Given, in particular, the large number of 

interstate child support cases, the Working 

Group concluded that children should not be 

enrolled in any limited provider plan whose 

services/providers are not accessible to 

them, unless the plan can provide financial 

reimbursement for alternate service 

providers. In its recommendations, the 

Working Group considers coverage by 

Health Maintenance Organizations (HMOs), 

and other plans which limit providers, 

accessible if the provider may be reached 

within 30 minutes or 30 miles, but allows 

States to adopt an alternative standard. 

Comprehensive and Seamless 

Coverage 

The child support enforcement program 

should work in close conjunction with 

Medicaid and the SCHIP to ensure that 

children who have access to private 

coverage obtain such coverage and those 

who need publicly subsidized coverage are 

covered by Medicaid or SCHIP. 

Overview of Recommendations

The Working Group spent considerable time 

deliberating, listening to testimony, studying 

research, and meeting in subcommittees. 

The Working Group’s deliberations led to 

76 recommendations. While many are 
Executive Summary

Medical Child Support Working Group Report Page xv 

practical and technical, others are 

visionary—a dramatic shift to a new 

paradigm—necessitating fundamental 

changes to State and Federal government’s 

management and operations of medical child 

support enforcement. Some of the 

recommendations are Federal mandates, 

others are “best practices” to be shared with 

States, employers, and others. The 

implementing strategy for each 

recommendation falls within one or more of 

the following categories: 

♦ Federal Statute/Legislation 

♦ Federal Regulation/Guidance 

♦ Best Practice 

♦ Technical Assistance and Education 

♦ Research, Evaluation, and 

Demonstration 

Considering the complex interplay of trends 

in health care delivery, labor market, and 

family structure, the Working Group has 

formulated a comprehensive strategy that 

overhauls the current medical support 

system for the country’s 21 million child 

support-eligible children. Enactment or 

adoption of these recommendations will 

increase the number of children with private 

health care coverage and increase access to 

publicly-funded health care coverage for 

children who cannot obtain private 

coverage. Throughout, the Working Group 

recommends a broader, more proactive role 

and responsibility for IV-D agencies in 

ensuring that children have health care 

coverage. As a necessary companion to 

these mandates, the Working Group 

recommends immediate enhanced funding to 

IV-D programs for medical support 

enforcement. Although the enhanced 

funding is time-limited, the 

recommendations also address research and 

future funding. 

The solutions developed by the Working 

Group are most easily considered in two 

broad categories: recommendations that 

ensure seamless health care coverage for all 

children and recommendations that 

streamline medical support enforcement. 

Below is a sampling of the Working 

Group’s 76 recommendations: 

Seamless Coverage for All 

Children 

♦ State child support guidelines are based 

upon outdated assumptions and 

therefore fail to maximize private family 

health coverage enrollment for child 

support-eligible children. Even when 

State child support guidelines direct the 

decision maker to look at coverage 

available to both parents, this is not 

always the case. Therefore, the 

Working Group makes 

recommendations that require States to 

adopt medical child support guidelines 

that require the decision maker to 

explore health care coverage available to 

both parents. 

♦ The Working Group developed a 

“decision matrix” that provides 

guidance to decision makers when 
Executive Summary

Page xvi Medical Child Support Working Group Report 

deciding which health care coverage is 

the most appropriate—affordable, 

accessible, comprehensive—to order. 

This matrix considers private insurance 

available to both parents and grants 

decision makers flexibility to order 

parents to seek public coverage where 

no private health care plan is found to be 

appropriate. These important 

recommendations provide structured and 

equitable treatment to all children. 

♦ The Working Group recommends that 

the Federal regulation that deems all 

employment-related or group-based 

coverage to be reasonable in cost should 

be replaced with a standard based on the 

cost of coverage relative to income of 

the parent who provides the coverage. 

If the cost of providing private coverage 

does not exceed five percent of the gross 

income of the parent who provides 

coverage, then the cost should be 

deemed reasonable. 

♦ The Working Group makes 

recommendations to improve 

coordination between IV-D and 

Medicaid and SCHIP, including adding 

IV-D as an agency that can engage in 

presumptive eligibility for Medicaid 

enrollment. 

♦ The decision maker needs information 

about health care plans that are available 

to both parents to determine where there 

is access to private health care coverage, 

and how to allocate costs and draft the 

medical support order. Therefore, the 

Working Group recommends that States 

develop discovery mechanisms that 

require parents to disclose information 

about health care coverage to ensure the 

best available health care choice is 

ordered. In addition, the Working 

Group recommends further study of 

automated sources that would provide 

improved information sharing and data 

exchange. 

♦ The Working Group recommends that 

SCHIP eligibility not be denied where a 

child is enrolled in private insurance but 

the health care benefits are not 

geographically accessible. 

Streamline Process for 

Enforcement 

♦ During its deliberations, the Working 

Group provided significant feedback 

and input on the National Medical 

Support Notice. The suggested changes 

make the Notice more “user friendly” 

for IV-D personnel, employers, and plan 

administrators. The Notice of Proposed 

Rule Making (NPRM) on the Notice, 

proposed in November 1999, provides a 

uniform tool for States to inform 

employers to enroll noncustodial 

parents’ children in an employersponsored group health plan. The 

standardized form has two parts. After 

an employer receives the entire Notice, 

the employer retains Part A and sends 

Part B to the appropriate group health 

plan. In addition, the Working Group 

provides recommendations to improve 

the implementation and use of the 

Notice through education and outreach 

strategies. 

♦ The Working Group makes 

recommendations on the Medical 

Support Incentive and funding for these 

new medical support activities. 

Enhanced Federal Financial 

Participation (FFP) to jump-start these 

medical support activities is the key. In 

addition, the Working Group 

recommends that two years be afforded 

to the Medical Incentive Workgroup to 

finalize the measure, using this time to 

obtain data not currently available. The 

incentive would be in place in the third 

year and States would begin collecting 

and reporting the data necessary to 

calculate the incentive. Full 

implementation of the medical support 

performance measure would begin at the 
Executive Summary

Medical Child Support Working Group Report Page xvii 

end of five years, at which time the 

enhanced FFP would end. 

♦ The Working Group recommends that 

the priority of child support be: cash 

support, then health care premiums and 

current medical support, then arrears, 

with flexibility. 

♦ The Working Group recommends that 

State child support enforcement 

agencies should not pursue recoupment 

of pregnancy and birth-related costs in 

Medicaid cases. 

♦ The Working group recommends 

research examining potential cost 

savings to Medicaid as a result of the 

greater role of IV-D in accessing private 

health insurance and a special grant 

project testing the use of innovative 

health care delivery models for child 

support-eligible children, such as the 

Sacramento IV-D Kids program. 

♦ The Working Group recommends 

amending relevant laws to eliminate—or 

at least reduce—barriers. In addition to 

looking at the Employee Retirement 

Income Security Act of 1974 (ERISA), 

the Consolidated Omnibus Budget 

Reconciliation Act of 1985 (COBRA), 

the Health Insurance Portability and 

Accountability Act of 1996 (HIPAA), 

and the Social Security Act, there are 

important recommendations to review 

tax policy in several areas to make the 

Internal Revenue Code more consonant 

with health care policy. 

Organization of Report

This Report will assist policy makers in 

developing technical and substantive 

changes to statutes and regulations. It will 

provide best practice information to States 

and employers. 

The Report is organized into nine chapters. 

The first two chapters provide an overview 

and background. Chapter 1 addresses the 

scope of the problem and Chapter 2 provides 

an overview of the current system from the 

perspective of the Child Support 

Enforcement Program (IV-D), as well as 

from the perspective of the employer and 

plan community. This Chapter lays out not 

only the requirements and suppositions built 

into current law but also offers a new 

paradigm for ensuring health care coverage 

for all child support-eligible children. 

A critical step in child support is 

establishing the child support order. 

Chapter 3 offers a detailed analysis and 

comprehensive reform of both how health 

care is included in a child support obligation 

and how that order is drafted. Chapter 4 

discusses the enforcement tool for IV-D 

medical support orders, the National 

Medical Support Notice. Chapter 5 is a 

broader discussion of enforcement of the 

health care provisions in a child support 

order. Chapter 6 is a macro discussion of 

system coordination. Funding of child 

support activities directly related to medical 

support can be found in Chapter 7. Chapter 

8 identifies additional strategies and 

research required to ensure ongoing 

improvements in assuring health care 

coverage for children in single parent 
Executive Summary

Page xviii Medical Child Support Working Group Report 

families. Finally, Chapter 9 provides a brief 

Postscript/Conclusion to the Report. 

Future

The Working Group’s recommendations are 

designed to create an easier, more cost 

effective, and comprehensive medical child 

support enforcement system. Suggested 

strategies and laws will move our society a 

long way down the road to ensuring that 

children are protected from the health care 

consequences of family dissolution. Finally, 

although it is the Working Group’s goal that 

this Report frame the focus and future 

direction of medical child support 

enforcement within the IV-D program, it is 

our hope that the consensus built here will 

also provide a model for sorting through the 

complex interplay of competing interests 

and move as a society to ensure health and 

well-being to all America’s children. 
CHAPTER 1

Medical Child Support Working Group Report Page 1-1 

CHAPTER 1. Lack of

Health Care Coverage –

High Risk for Child

Support-Eligible Children

Children’s Health Care Coverage

is Critical

Access to health care services is a complex 

issue and the focus of frequent debate by 

scholars, policy makers, headline writers 

and the general public. As a society, we 

continue to struggle with the delivery of 

adequate medical care to all citizens. While 

opinions and approaches vary, there is 

universal accord on one issue: for children, 

health care is critical. 

Children without health care coverage have 

substantially less access to health care 

services, including preventive care that 

ensures childhood immunizations are up to 

date, vision and hearing screening and 

corrections have occurred, and routine 

dental care has been provided.1

 Care for 

uninsured children is also far more likely to 

be delayed due to cost.2

 Unmet health care 

needs reduce children’s ability to learn and 

to grow into healthy and productive adults. 

Making sure that children stay healthy is an 

important goal for all segments of society. 

Healthy children are important to employers 

because sick children reduce employee 

productivity. Healthy children are important 

to the health care industry because they 

increase profitability. Healthy children are 

important to public health programs and 

providers because improving child health is 

part of their basic mission. Healthy children 

are important to the child support 

community because it is responsible for 

helping to improve the lives of children who 

live apart from one of their parents. And 

!CHAPTER 1 AT A GLANCE

CHILDREN’S HEALTH CARE COVERAGE IS CRITICAL, 1-1 

There Is No Single Reason Why Children Do Not Have Health Care Coverage, 1-2

GOVERNMENT EFFORTS HAVE HELPED BUT MORE NEEDS TO BE DONE, 1-4 

CREATION OF THE MEDICAL CHILD SUPPORT WORKING GROUP, 1-7 

Legislative Mandate, 1-8

ORGANIZATION OF THE REPORT, 1-10 

Theme

Children who grow up in divorced, separated, or never-married families are at risk for not 

having health care coverage. Private health care coverage is highly related to income and 

many single-parent households have lower incomes than two-parent households. Even if 

income is not an issue, it is usually more difficult for parents to coordinate resource 

investment in their children when they live apart. Recognizing these risks, Congress 

established the Medical Child Support Working Group (the “Working Group”) to make 

recommendations for improving health care coverage for children. 
CHAPTER 1

Page 1-2 Medical Child Support Working Group Report 

most important, healthy children are 

important to parents because they love their 

children and want them to have the best life 

possible. Healthy children are important for 

all of society, because they are our future.

There Is No Single Reason Why 

Children Do Not Have Health Care 

Coverage 

Many of the issues related to the lack of 

health care coverage for children are 

structural. That is, they are related to larger 

changes in our society. For decades, the 

cost of health care has been rising at rates 

higher than inflation. These rising health 

care coverage costs have made private 

family health coverage more expensive for 

both employer and employee. In response to 

rising health care costs, our society has 

moved from a health care insurance model 

where there was usually a choice of 

providers (often referred to as fee-forservice plans) to extensive use of health care 

maintenance plans and other types of plans 

that put limitations on the choice of 

provider. 

In recognition of the reliance that American 

society has on private group health care 

coverage, there have also been many 

legislative and regulatory interventions to 

try to make the system work better for 

employers and insurers, as well as for 

employees and their dependents. These 

efforts have affected the tax code, regulated 

employers, made changes in benefit 

packages and insurance industry practices, 

and offered coverage protections to certain 

classes of employees and dependents. All of 

these efforts have had the laudatory goal of 

improving health care coverage. However, 

taken in their totality, these legislative and 

regulatory changes have not always been 

consistent with each other, have sometimes 

created confusion among both the regulators 

and the regulated, and may have 

discouraged participation by some 

employers and some employees in group 

health care coverage. These efforts may 

also have had the unintended consequence 

of increasing health care costs. 

“I would ask you to remember our focus 

is uninsured children. But children do 

not buy health insurance. Parents buy 

health insurance for their children, and 

they buy it with the help of employers 

and through employers. Granted, the 

children are also covered through the 

government, but the government is the 

conduit of money from employers and 

parents in order to pay for that health 

coverage. Either way you look at it, it's 

the parent and the employer, through 

taxes or directly, that pays for health 

coverage. And to the extent that healthcare coverage is affordable, there's a 

direct relation to the extent that there 

will be coverage for the uninsured 

children.” 

~ Terry Humo, General Counsel, 

Intermountain Administrators, Inc. 
CHAPTER 1

Medical Child Support Working Group Report Page 1-3 

Changes in the labor market have affected 

health care coverage as well. It is less likely 

today for workers to stay in the same job for 

long periods of time. There are fewer bluecollar jobs with generous benefit packages 

for low-skilled workers. More workers are 

working part-time, on a temporary basis, on 

a contract basis, or are self employed. This 

may mean that workers do not qualify for 

health benefits because they work too few 

hours or have not worked long enough.3

 

Individuals whose low level of skills and/or 

education makes it difficult to move out of 

the low-wage segments of the labor market 

are least likely to have coverage. These 

workers often find that their employers are 

less likely to offer health care coverage or 

that, if offered, they cannot afford to take 

advantage of the coverage.4

The changing structure of the family has 

also had an impact on children’s health care 

coverage. High rates of divorce and nonmarital child-bearing have meant that an 

increasing number and proportion of 

children live with only one of their parents. 

Recent studies have shown that children 

who live in families with two employed 

parents are more likely to have health care 

coverage than children who live in oneparent families, even if that parent is 

employed.5

 Studies have shown that it is 

often difficult for parents who live apart to 

work together on behalf of their children.6

 

After divorce or a break-up of a romantic 

relationship, one parent may move a long 

distance from the other and their children, 

one or both may get remarried and have 

multiple family responsibilities, and often 

acrimony continues to exist from the breakup of the relationship. All of this makes it 

more difficult for parents to work together 

for the sake of their mutual children.7

 

Additionally, single-parent households often 

have low incomes. Children in lowerincome households are less likely to have 

private health care coverage and more likely 

to rely on public coverage than middle- or 

upper-income children.8

 (See Child 

Support-Eligible Children box.) 

There are also changes in the structure of 

single-parent households. For example, they 

% “Child Support-Eligible Children” 

As used in this report, child supporteligible children are children under the age 

of 19 whose parents are divorced, 

separated, or never-married (and not living

together). Not all child support-eligible 

children live in single parent households, 

about 17 percent live in married stepparent families. In this report 21 million 

children living in single or stepparent 

households are considered to be eligible 

for child support. Additional child supporteligible children live with a related adult, a 

guardian or foster parent. Our data is not 

able to count these children. (See 

APPENDIX D: Health Care Coverage for 

Child Support-Eligible Children, page 

A-32). 
CHAPTER 1

Page 1-4 Medical Child Support Working Group Report 

are not limited to female-headed households. 

While mothers are still more likely to have 

sole custody, approximately 15 percent of 

all custodial parents are fathers.9

 The 

structure of single-parent households has 

also been affected by the fact that more 

parents have shared legal custody for their 

children. This means that it is the right of 

both parents to be involved in important 

decisions, like health care, even when the 

children reside primarily with one parent. In 

addition, some parents are deciding to each 

take primary physical responsibility for one 

or more of their shared children, and some 

states are no longer using the term 

“custody,” but instead are allocating 

“parenting time” between the mother and 

father.10 These changes all affect children’s 

access to health care coverage. 

Government Efforts Have Helped

But More Needs to Be Done

Over time, Federal and State governments 

have responded to the need for health care 

coverage for uninsured children in two 

ways. First, Congress authorized publiclysubsidized health care coverage through the 

Medicaid program in 1965 and then through 

the State Children’s Health Insurance 

Program (SCHIP) in 1999. Both Medicaid 

and SCHIP are need based programs, 

primarily serving families with incomes 

under 200 percent of poverty. 

Approximately 61 percent of the children in 

these programs live in single-parent 

households.11 Second, in 1984 State child 

support enforcement (“IV-D”) programs12

were given the responsibility to include 

medical support establishment and 

enforcement as part of their child support 

efforts. States were required to include 

provisions for health care coverage in their 

child support guidelines and the IV-D 

programs were required to pursue private 

health care coverage when such coverage 

was available through a noncustodial parent 

at a reasonable cost.13 All 21 million 

children under age 19 not living with both 

their biological or adoptive parents are 

potentially affected by State child support 

guidelines.14 About 13.5 million children 

are part of families receiving services 

through the IV-D program.15

In 1987 and 1989, the Office of the 

Inspector General (OIG), Health and Human 

Services (HHS) published two studies on 

medical child support that indicated there 

was room for substantial improvement in 

child support enforcement program efforts 

to obtain private health care coverage from 

noncustodial parents for their 

Medicaid-eligible children. These studies 

indicated that only 24 percent of child 

support orders (for Medicaid-eligible 

children) included provisions requiring 

medical support. These studies also 

indicated that as of 1989, in 48 percent of 
CHAPTER 1

Medical Child Support Working Group Report Page 1-5 

reviewed cases without a medical support 

provision, fathers actually had access to 

dependent coverage.16

In a soon to be released follow-up report to 

assess the child support enforcement 

program’s progress in obtaining medical 

support for Medicaid-eligible children, the 

OIG found that as of 1998, 93 percent of 

child support orders had provisions 

requiring medical support for dependent 

children. In addition, the OIG found that 

undetected dependent coverage available in 

Medicaid-eligible child support cases from 

the noncustodial parent through employment 

had been reduced from the 48 percent noted 

in 1989 to approximately 30 percent. 

Finally, the study notes that the change in 

health care coverage service delivery—from 

primarily fee-for-service to primarily 

managed-care—presents new issues for the 

cost-recovery strategies to be used when 

Medicaid-eligible children also have access 

to private health care coverage.17

Past efforts have made a difference. Eightysix percent of child support-eligible children 

have private or public health care coverage 

or both.18 Still, more needs to be done given 

the critical importance of access to health 

care for children. In addition to the issue of 

undetected health care coverage identified in 

the OIG report discussed above, two 

recently released Federal government 

reports indicate that other critical issues are 

lack of access to employment-based health 

care by some employees and the cost of 

health care coverage, especially for lowerwage employees. 

In 1998 the General Accounting Office 

(GAO) issued a report on the availability of 

employment-based health insurance. This 

report indicates that while most workers 

have access to employer-based health care 

coverage, a substantial minority, 28 percent, 

do not. Lack of access to coverage is 

affected by the size of the employer, the 

type of industry, the status of the employees, 

geographic location, and the cost of 

coverage relative to employee wage levels 

and size of firm.19

In the second report, OIG examined the 

availability of private health care coverage 

for children receiving Medicaid benefits. 

This single-State, small-scale study found 

that health care coverage was not being 

provided by 45 percent of noncustodial 

parents because it was not affordable or not 

available. The report concluded that the 

State should consider requiring noncustodial 

parents to contribute towards the cost of 

Medicaid premiums or to a (lower-cost) 

statewide health insurance plan for children 

that the State should establish.20 Clearly, for 

some children, alternatives to employerbased health care coverage are still needed. 
CHAPTER 1

Page 1-6 Medical Child Support Working Group Report 

$ The National Child Support Enforcement (IV-D) Program 

In 1975, Congress added Part D to Title IV of the Social Security Act, thereby creating the 

child support enforcement, or “IV-D” program. Although the program has been expanded 

and enhanced many times over the last 25 years, its goals remain to ensure that both 

parents financially and emotionally support children and to help reduce welfare 

expenditures. The IV-D program locates noncustodial parents; establishes paternity; 

establishes and modifies child support orders, including medical support provisions; 

collects and distributes child support; and enforces medical support provisions in child 

support orders.21

The child support enforcement system is built on a series of partnerships among Federal, 

State, and local governments, and the judiciary, as well as cooperative relationships with 

employers and social service agencies. State and Federal legislation establishes the basic 

framework, while courts, State offices of child support enforcement, the Federal Office of 

Child Support Enforcement (OCSE), and other public agencies work together to serve the 

needs of America’s children. 

OCSE sets program standards and policy, evaluates States’ performance, offers technical 

assistance and training to States, and audits State program activities. The Federal 

government also pays the predominant share of the cost of funding the program. 

Each State has a child support enforcement agency (also called “IV-D agency”). These 

agencies are housed in varying locations at the election of State government, including the 

State human or social services department, the Office of the Attorney General, or the State 

Revenue Department. Some State IV-D agencies provide localized services by operating 

State-run offices throughout the State. Other States provide local services through contracts 

with local government entities (e.g., counties, district attorneys) or private contractors. 

Still other States have a hybrid system of local offices, with some operated by the State and 

others operated by local government/contractors. 

There is also substantial variation between States in what authority is responsible for 

establishing and enforcing child support orders—including orders for medical support. 

Whether a court or an administrative agency issues the order, the decision maker must 

apply the State’s child support guidelines and issue an order for income withholding. 

Eligibility for IV-D Services 

All families may apply for child support services.22 Families that are receiving Temporary 

Assistance for Needy Families (TANF) must cooperate with the State child support agency 

to establish paternity, collect child support, and obtain health care benefits except for “good 

cause” reasons, such as serious threat of physical violence. There is a similar requirement 

for Medicaid, except that Medicaid-eligible children cannot be denied for failure to 

cooperate, and pregnant women eligible under the poverty level eligibility group are not 

required to cooperate as a condition of eligibility. Families who do not receive public 

assistance receive services upon application. While the application fee is minimal, States 

are permitted to recover costs and thus the applicant may be responsible for additional costs 

or fees. 
CHAPTER 1

Medical Child Support Working Group Report Page 1-7 

In 1996, approximately three million 

children not living with both of their 

biological or adoptive parents had no health 

care coverage throughout the year. Some of 

these children had no private health care 

coverage available through either their 

mother’s or father’s employment. Others 

had private health care coverage available, 

but neither the parents nor the local child 

support enforcement program were able to 

break through the barriers that make it 

difficult to get health care coverage for these 

children. Still others were eligible for 

publicly-sponsored coverage, but their 

parents did not know how to apply for 

coverage or that such coverage was even 

available. Yet other children had coverage 

for only part of the year23 and they, too, 

needed help filling the coverage gap. 

New strategies and new approaches are 

needed to ensure that children are held 

harmless from the potential adverse health 

care consequences of family break-up. All 

21 million child support-eligible children 

will be affected by the recommendations 

presented in this Report. For these children, 

getting and keeping health care coverage is 

complicated and resource intensive. The 

Working Group believes that the 

recommendations in this Report will make 

getting children into health care coverage 

easier and more cost-effective for parents, 

employers, plan administrators, insurers and 

government. If fully implemented, these 

recommendations will result in more

children having the best private health care 

coverage available through their parents and 

fewer children having no health care 

coverage at all. 

Creation of the Medical Child

Support Working Group

Congress recognized both the nature of the 

problems and the willingness of the various 

communities to deal with them in a 

coordinated fashion. To encourage these 

efforts, it created the Medical Child Support 

Working Group (“Working Group”) as part 

of Pub. L. 105-200, the Child Support 

Performance and Incentive Act of 1998 

(“CSPIA”).24 Jointly established by the 

Secretary of Health and Human Services and 

the Secretary of Labor, the Working Group 

includes representatives of the Federal 

government, employers, health plan 

administrators, the health insurance industry, 

“Your task is, quite simply, to keep 

the kids in mind and to think broadly 

beyond the scope of the work you all 

individually do to what's a good and 

workable solution to the issues that 

face you.... It's not just about the 

coverage; it's about better health 

outcomes for the people—for these 

kids.” 

~ Kevin Thurm, Deputy Secretary, HHS 

May 12, 1999 
CHAPTER 1

Page 1-8 Medical Child Support Working Group Report 

child support professionals, SCHIP and 

State Medicaid programs, unions, courts, 

and advocates for parents and children. 

These representatives committed themselves 

to work together to develop solutions that 

expand health care coverage for children and 

that are sensitive to the needs of all the 

stakeholders in the support enforcement 

arena. 

Legislative Mandate 

Congress charged the Working Group with 

developing specific recommendations that 

address the six areas outlined below. The 

Working Group was charged with 

identifying impediments to effective 

enforcement of medical support by State 

agencies administering the programs 

operated pursuant to Part D of Title IV of 

the Social Security Act. 

❶ Notice 

Assess the form and content of the National 

Medical Support Notice (the “Notice,” or 

NMSN), issued under interim regulations. 

❷ Withholding Priorities 

Propose measures that would establish the 

priority of wage withholding for current 

child support, medical support, arrearages, 

and the employee’s portion of any health 

care coverage premium, in light of consumer 

protection statutes. 

❸ Coordination with 

Medicaid/SCHIPs 

Recommend appropriate procedures for 

coordinating the provision, enforcement, and 

transition of health care coverage under 

State programs. 

❹ Alternatives to Health Care 

Coverage Through the 

Noncustodial Parent 

Recommend measures to increase the 

availability of alternate types of medical 

support, in addition to health care coverage 

offered through the noncustodial parent’s 

health plan and unrelated to the noncustodial 

parent’s employer. These could include 

establishing a noncustodial parent’s 

responsibility to share the cost of premiums, 

co-payments, deductibles, or payments for 

services not covered under a child’s existing 

health coverage. 

❺ Reasonable Cost 

Recommend whether reasonable cost should 

remain a consideration (under §452(f) of the 

Social Security Act). 

The statute requires HHS to issue 

regulations that require States to include 

medical support as a part of any child 

support order and enforce medical support 

whenever health care coverage is available 

to the noncustodial parent at a reasonable 

cost. 
CHAPTER 1

Medical Child Support Working Group Report Page 1-9 

❻ Other Measures/Impediments 

Recommend appropriate measures to 

eliminate other impediments to the effective 

enforcement of medical support orders. 

As the list above shows, the CSPIA 

legislation provided a very specific mandate 

for the Working Group. This mandate 

focused activities on improving the 

enforcement of medical support by State 

IV-D agencies and provided a list of specific 

issues that should be addressed by the 

Working Group’s deliberations. The 

Working Group responded to this charge by 

framing their recommendations to improve 

medical support enforcement within the 

context of a broader vision. 

This vision incorporated as its target 

population all 21 million children under age 

19 potentially eligible for child support 

services, not just those currently receiving 

services through the IV-D system. State and 

Federal child support rules and activities 

affect children whose parents do not use the 

IV-D child support system as well as those 

who do. For example, a child support order 

established as part of a divorce action might 

be enforced in the IV-D system. It is also 

important to recognize that families move in 

and out of the public child support 

enforcement system. For instance, any 

parent not on welfare who applies for IV-D 

child support services can terminate receipt 

of those services at any time. 

The Working Group concluded that 

“enforcement of medical support” required 

securing health care coverage for as many 

child support-eligible children as possible. 

This would include establishing medical 

support when private health coverage is 

available and appropriate, and securing 

public health care coverage when private 

coverage is not an option. Getting and 

maintaining health care coverage for all 

child support-eligible children was the 

ultimate mission of the Working Group’s 

activities. (See $ Mission Statement of 

the Medical Child Support Working 

Group box.)

The Working Group drew upon the expertise 

of its members, brought in outside speakers 

$ Mission Statement of the Medical 

Child Support Working Group 

The mission of the Medical Child Support 

Working Group is to identify and address 

impediments to the effective 

establishment and enforcement of medical 

child support and the successful 

promotion of health care coverage for 

children who are receiving or are eligible 

for child support enforcement services 

under Title IV Part D of the Social 

Security Act. 

Adopted by the Working Group May 12, 

1999. 
CHAPTER 1

Page 1-10 Medical Child Support Working Group Report 

and experts, had access to staff at the 

Departments of HHS and Labor, shared 

research and policy papers and reports, and 

relied on the laws and policies that States 

have already developed and implemented in 

framing its recommendations. This Report 

presents an examination of expanding health 

care coverage for children from the 

perspectives and concerns of all the 

stakeholders, and offers recommendations 

that the Working Group believes will help 

expand health care coverage options for all 

21 million children at special risk because of 

their family circumstances. 

Overall, the Working Group agreed that 

although public family health coverage is 

increasingly available to children who do 

not have private coverage, child support 

orders should include—and the child 

support enforcement program should try to 

secure—appropriate private insurance 

whenever possible. This Report thus 

recommends reforms that will increase 

children’s access to private insurance and 

will expedite processing of medical support 

orders. However, since private coverage is 

frequently unavailable or insufficient, this 

Report also recommends reforms that will 

improve the delivery of publicly-provided 

health care coverage. 

Organization of the Report

Chapter organization, as well as the “theme” 

of each chapter, is summarized below. 

Chapter 1: Lack of Health Care Coverage – 

High Risk for Child Support-Eligible 

Children 

Children who grow up in divorced, 

separated, or never-married families are at 

risk for not having health care coverage. 

Private health care coverage is highly related 

to income and many single-parent 

households have lower incomes than twoparent households. Even if income is not an 

issue, it is usually more difficult for parents 

to coordinate resource investment in their 

children when they live apart. Recognizing 

these risks, Congress established the 

Medical Child Support Working Group (the 

“Working Group”) to make 

recommendations for improving health care 

coverage for children. 

Chapter 2: Partnership for a New Medical 

Child Support Paradigm 

The Medical Support Working Group offers 

a new paradigm for ensuring health care 

coverage for children. Many of the old 

notions of how to get children into coverage 

needed to be examined and discarded in 

light of the complex interplay of trends in 

health care, labor market characteristics, 

public program eligibility and participation, 
CHAPTER 1

Medical Child Support Working Group Report Page 1-11 

and family structure changes. The new 

paradigm looks to the private health care 

coverage resources available from both 

parents and to the availability of public 

health care coverage when private coverage 

is not available; it also gives the IV-D 

program responsibility for coordination of 

information between the providers of public 

and private health care and parents. Only by 

working in partnership will coverage be 

expanded and maintained. 

Chapter 3: Taking the First Step: 

Establishing Health Care Coverage in Child 

Support Orders 

The place to start reform is at the beginning, 

with order establishment. State child 

support guidelines are required to address 

how health care coverage will be provided, 

and it is important that each order include 

the health care coverage that is best for the 

child. The guidelines presented in this 

chapter lay out a matrix that directs the 

decision maker to consider the entire range 

of coverage options available to the child, 

including private coverage from either 

parent and, when appropriate, public 

coverage. In determining which coverage is 

best, the decision maker should consider not 

only availability, but other factors that 

influence the likelihood that the child will be 

appropriately and consistently insured, such 

as accessibility, comprehensiveness, and 

affordability. When the child is ordered into 

the appropriate coverage from the start, it 

will not only benefit the child, but will also 

reduce administrative and enforcement 

activity on the part of the IV-D agency, the 

insurer, and the parents. 

Chapter 4: Implementing a New Tool: The 

National Medical Support Notice and 

Related Issues 

The National Medical Support Notice is 

intended to provide a standardized means of 

communication between State child support 

enforcement agencies, employers, and 

administrators of group health plans 

regarding the medical support obligations of 

noncustodial parents. The Notice will 

facilitate the process of enrolling children in 

the group health plans for which their 

noncustodial parents are eligible. While the 

Notice that has been proposed would go a 

long way towards improving medical 

support enforcement, there are changes that 

can be made that will further simplify and 

streamline the process and make it less 

burdensome to all the parties involved. 

Steps also should be taken to make the 

Notice applicable to the Federal civilian and 

military health care plans. 

Chapter 5: Answering Hard Questions: 

Providing Guidance to IV-D Agencies and 

Employers on Enforcement Issues 
CHAPTER 1

Page 1-12 Medical Child Support Working Group Report 

Because circumstances of families change, 

orders often seem out of date before their 

provisions are even put into place. 

Sometimes orders have to be changed, but 

often the issues can be solved by having 

reasonable and realistic enforcement rules 

that help IV-D agencies and employers 

apply the provisions of award over time 

even though individual fact patterns have 

changed. This chapter includes 

recommendations for two of the most 

difficult enforcement issues—the Consumer 

Credit Protection Act limitation on wage 

garnishment and the Priority of 

Withholding—as well as recommendations 

for other enforcement issues. 

Chapter 6: Moving Towards Seamless 

Coverage: Improving Coordination and 

Communication Among Private and Public 

Health Care Coverage 

Under the current system it is very easy for 

children to have periods in which no health 

care coverage is available. The extent to 

which this happens could be decreased by 

building feedback loops into the information 

flow between IV-D agencies and the public 

health care providers, Medicaid and SCHIP. 

Additionally, IV-D, Medicaid, and SCHIP 

agencies need to be working from a 

common understanding when obtaining 

private or public health care coverage or 

both are in the best interest of the child. 

IV-D should work with Medicaid and 

SCHIP, as well as with private insurers, to 

assure that the child is enrolled in 

appropriate health care coverage. 

Chapter 7: The Question of Money: Paying 

for the Expanded Role of the IV-D Program 

in Obtaining Health Care Coverage for 

Children 

To improve the establishment, 

implementation, and enforcement of medical 

child support, the Working Group has made 

recommendations that will considerably 

enhance the responsibilities of child support 

enforcement agencies. IV-D agencies may 

need to undertake significant restructuring in 

order to incorporate new options, and new 

tools, into their core functions. Without 

sufficient resources, the Working Group's 

recommendations cannot be implemented 

and many of the identified barriers to 

medical child support enforcement will 

remain. This chapter lays out a Federal 

funding scheme to support, and ultimately 

reward, successful implementation of these 

recommendations by IV-D agencies. 

Chapter 8: Shaping the Future: Strategies 

for Ensuring Ongoing Improvements 

To give children the opportunity for health 

care coverage will require the development 

of new strategies that keep up with the 

changes in the labor force, health care, 

family structure, and public programs. 
CHAPTER 1

Medical Child Support Working Group Report Page 1-13 

Research and demonstration activities can 

help improve coordination of coverage, fill 

gaps, and identify new and better ways to 

get coverage to children. Collaborations 

within and among Federal and State 

agencies can help contain costs, identify 

problems, and make mid-course corrections. 

Like the old paradigm for Medical Support, 

the new ideas presented in this Report will 

become obsolete; knowledge development 

and coordinated efforts will keep our joint 

efforts relevant to changing conditions. 

Chapter 9: Conclusion/Postscript 

Appendix 

Endnotes 

 

1

 Hoffman, Catherine. Uninsured in America: A 

Chart Book. The Kaiser Commission on 

Medicaid and the Uninsured (June 1998), 40. 

See also Weissman, J.S., C. Gatonis, and A.M. 

Epstein. “Rates of Avoidable Hospitalization by 

Insurance Status in Massachusetts and 

Maryland.” JAMA (1992) 268: 2388-94. 2 Child Health Facts: National and State Profiles 

of Coverage. The Kaiser Commission on 

Medicaid and the Uninsured, Figure 10. 

http://www.kff.org/content/archive/2105/childch

art.html#fig10

3

 O’Brien, Ellen and Judith Feder. EmploymentBased Health Insurance Coverage and Its 

Decline: The Growing Plight of Low-Wage 

Workers. The Kaiser Commission on Medicaid 

and the Uninsured (May 1999), 18. Also see 

Employment Based health Insurance: Medium 

and Large Employers Can Purchase Coverage, 

but Some Workers are Not Eligible, HEHS-98-

184, General Accounting Office, Washington , 

D.C. 07/27/98. 

4 Employment Based health Insurance: Medium 

and Large Employers Can Purchase Coverage, 

but Some Workers are Not Eligible, GAO, 

HEHS-98-184, General Accounting Office, 

Washington , D.C. 07/27/98. 

 

5

 Weinick, Robin and Alan C. Monheit. 

“Children’s Health Insurance and Family 

Structure.” Medical Care Research and Review, 

56:1 (March 1999), 66. 

6

 Doherty, William, Edward Kouneski, and 

Martha Farrell Erickson, Responsible 

Fatherhood: An Overview and Conceptual 

Framework, Report prepared for the Department 

of Health and Human Services under contract 

HHS -100-93-0012, Washington, D.C., 1993; 

Furstenberg, Frank and Andrew Cherlin, Divided 

Families, What happens to Children when 

Parents Part, Cambridge, Mass: Harvard 

University Press (1991); The Future of Children: 

Children and Divorce 4 (1), Spring 1994, Center 

for the Future of Children, The David and 

Lucille Packard Foundation; Weitzman, Lenore, 

The Divorce Revolution: The Unexpected Social 

and Economic Consequences for Women and 

Children in America, New York: The Free Press 

(1985). 

7

 Weinick and Monheit, 56. 

8

 U.S. Department of Commerce, Bureau of the 

Census. “Children Without Health Insurance.” 

Census Brief CENBR/98-1 (March 1998). 

9

 Lyon, Matthew. “Characteristics of Families 

Using Title IV-D Services in 1995.” U.S. 

Department of Health and Human Services, 

Office of the Assistant Secretary for Planning 

and Evaluation (May 1999), Table 1. 

10 Connecting with Your Kids: A Guide to 

Establishing, Modifying and Enforcing 

Parenting Time in Colorado, Denver: Colorado 

Foundation for Families and Children (1999). 

11 See APPENDIX D: Health Care Coverage for 

Child Support-Eligible Children, page A-32. 

12 In 1975, Congress created the child 

support enforcement program with the 

passage of Title IV-D of the Social Security 

Act, hence the reference to the “IV-D” 

program. This program provides a 

Federally-funded and State-administered 

system through which families may 

establish, enforce, and modify child support 

obligations, including medical support. 

Families receiving TANF benefits are 

required to cooperate with State or local 

officials to secure support for their children. 

Other parents may apply for these services. 

A more detailed discussion of the IV-D 

program and its responsibilities with regard 

to securing medical support is contained in 

Chapter 2. 

13 42 U.S.C. §652(f)(1999).
CHAPTER 1

Page 1-14 Medical Child Support Working Group Report 

 

14 See data tabulations in APPENDIX D: Health 

Care Coverage for Child Support-Eligible 

Children, page A-32. 

15 Lyon (1999), Table 1. 

16 Child Support Enforcement/Absent Parent 

Medical Liability, Office of the Inspector 

General, Department of Health and Human 

Services (September 1987) and Coordination of 

Third Party Liability: Information Between 

Child Support Enforcement and Medicaid, 

Office of the Inspector General, Department of 

Health and Human Services (December 1989). 

17 Medical Support for Dependents Receiving 

Child Support, Office of the Inspector General, 

Department of Health and Human Services 

(forthcoming, June 2000). 

18 See data tabulations in APPENDIX D: Health 

Care Coverage for Child Support-Eligible 

Children, page A-32. 

19 Employment Based health Insurance: Medium 

and Large Employers Can Purchase Coverage, 

but Some Workers are Not Eligible, GAO, 

HEHS-98-184, General Accounting Office, 

Washington , D.C. 07/27/98. 

20 Review of Availability of Health Insurance for 

Title IVD Children, A-01-97-02506, Office of 

the Inspector General, Department of Health and 

Human Services, Washington, D.C. (June 1998). 

21. 42 U.S.C. §§651 et seq. (1999). 22. 42 U.S.C. §654 (1999). 23 Wheaton, Laura, “Noncustodial Fathers: To 

What Extent Do they Have Access to 

Employment Based Health Care Coverage?” 

The Urban Institute (forthcoming, June 2000). 

Prepared under contract HHS-100-95-0021 for 

the Department of Health and Human Services. 

24 Pub. L. 105-200. 
CHAPTER 2

Medical Child Support Working Group Report Page 2-1 

CHAPTER 2. Partnership

for a New Medical Child

Support Paradigm

Introduction

Parents, as well as private and public 

stakeholders, must cooperate to make sure 

that health care coverage is available to all 

children. Among the “players” in this 

complex process are Federal, State, and 

local child support and health agencies; the 

U.S. Department of Labor (DOL); judges; 

court administrators; attorneys; parents’ and 

children’s advocates; employers; health plan 

administrators; members of the payroll and 

human resource communities; insurance 

industry representatives; and labor unions. 

Thus, laws, policies, and procedures 

designed to remove impediments to medical 

support enforcement must emphasize 

coordination and cooperation among all of 

these individuals and entities. Given the 

complexity of the issues and the legitimate, 

competing concerns of the stakeholders, 

reform is challenging but necessary if health 

!CHAPTER 2 AT A GLANCE

INTRODUCTION, 2-1 

How Medical Support Enforcement Works (the Child Support Enforcement 

Perspective), 2-2

Procedures Under Current Law for IV-D Implementation of Medical Support, 2-6 

How Medical Support Enforcement Works (the Employer and Plan Community 

Perspective), 2-6

Current Law Employer and Plan Procedures Necessary for Implementation of 

Medical Support, 2-8 

PRIOR ASSUMPTIONS AND INADEQUATE SOLUTIONS, 2-9 

ASSUMPTIONS FOR THE NEW MEDICAL SUPPORT PARADIGM, 2-17 

SUMMARY, 2-20 

Theme

The Medical Support Working Group offers a new paradigm for ensuring health care 

coverage for children. Many of the old notions of how to get children into coverage 

needed to be examined and discarded in light of the complex interplay of trends in health 

care, labor market characteristics, public program eligibility and participation, and family 

structure changes. The new paradigm looks to the private health care coverage resources 

available from both parents and to the availability of public health care coverage when 

private coverage is not available; it also gives the IV-D program responsibility for 

coordination of information between the providers of public and private health care and 

parents. Only by working in partnership will coverage be expanded and maintained. 

“The Child Support Enforcement 

Program will put children first by 

helping both parents assume 

responsibility for the economic and 

social well-being, health and 

stability of their children.” 

~ Child Support Enforcement 

Strategic Plan, with Outcome 

Measures for FY 2000-2004 
CHAPTER 2

Page 2-2 Medical Child Support Working Group Report 

care coverage for child support-eligible 

children is to be maximized. 

This chapter describes the medical child 

support enforcement mechanisms currently 

in place. While several recently enacted 

laws will change some of these procedures,1

some of these recent provisions are not yet 

effective and therefore not reflected in this 

discussion. This chapter does, however, 

describe the way the system will work after 

implementation of many of these new 

provisions. 

How Medical Support 

Enforcement Works (the Child 

Support Enforcement Perspective) 

The pursuit of private health care coverage 

for child support-eligible children has been a 

requirement of the child support 

enforcement program since Congress passed 

the Child Support Amendments of 1984. 

This provision required that the Secretary of 

HHS issue regulations requiring that States 

petition for medical child support in all 

IV-D cases in which such coverage is 

available at reasonable cost. In the 

regulations, HHS defines reasonable cost as 

any health care coverage available through 

the obligor’s employment.2

 Regulations 

also require that State child support 

guidelines take into account children’s 

health care needs when a child support order 

is established. Every State has enacted a 

child support guideline that presumptively 

determines how parents’ financial 

obligations are set.3

 Although the approach 

is left to the State and varies widely, these 

guidelines generally address how the child’s 

health care needs are to be met. 

Many of the early legislative efforts were 

designed to assist in reducing the cost of 

providing publicly-funded health care 

coverage through the Medicaid program. 

All Medicaid beneficiaries applying on 

behalf of children with a parent living 

elsewhere were required to assign their 

medical support rights to the State and 

cooperate with the child support 

enforcement program. (This was later 

modified to exclude pregnant and postpartum mothers). Child support and 

Medicaid agencies were allowed to enter 

into cooperative agreements to pursue 

medical support assigned to the State, and 

child support agencies were required to 

$ The Child Support Enforcement 

Perspective 

The child support enforcement perspective 

encompasses not just the Federal and State 

child support enforcement stakeholders 

but also public programs—such as TANF, 

Medicaid, and SCHIP—that refer families 

to child support or whose clients are 

affected by medical support coverage, as 

well as the courts and attorneys who are 

involved in setting and enforcing support 

orders. 
CHAPTER 2

Medical Child Support Working Group Report Page 2-3 

notify Medicaid agencies when private 

family health coverage was obtained or 

discontinued for a Medicaid-eligible 

person.4

In recent years, important legislative 

changes have been made to strengthen 

medical support enforcement. The Omnibus 

Budget Reconciliation Act of 1993 (OBRA 

‘93) amended the Employee Retirement 

Income Security Act of 1974 (ERISA), 

creating the Qualified Medical Child 

Support Order (QMCSO). This amendment 

clarified that child support orders requiring 

the provision of health care coverage could 

be enforced under ERISA-covered group 

health plans. Such enforcement is 

applicable to child support orders with 

medical support provisions that are enforced 

directly by the IV-D agencies and the 

custodial parent. OBRA ‘93 also amended 

Title XIX of the Social Security Act to 

require States to have specific laws that 

would enhance the eligibility of many 

children for health coverage under their 

parents’ health plans. The State laws 

impose requirements on insurers and 

employers designed to increase enrollment 

opportunities for children, facilitate the 

filing of claims by custodial parents, and 

establish new payment disbursement 

criteria. In addition, OBRA ’93 afforded 

State Title XIX agencies the authority to 

garnish wages, salary, and other income, and 

also to withhold State tax refunds from a 

parent obligated under a medical support 

order who has received reimbursement from 

a third party but has not reimbursed the 

other parent or the service provider. 

The Personal Responsibility and Work 

Opportunity Reconciliation Act of 1996 

(PRWORA) also mandated changes in 

medical support enforcement. PRWORA 

requires every IV-D child support order to 

include a provision for health care coverage, 

not just to petition for inclusion, as under 

previous law. This provision had the effect 

of requiring that medical support be 

established and enforced in all orders, not 

just when a Medicaid assignment was in 

effect. Prior to PRWORA, medical support 

in non-Medicaid cases was only enforced 

with the consent of the custodial parent. 

PRWORA also added a provision to help 

avoid lapses in children’s family health 

coverage.5

 States must notify the new 

employer of a noncustodial parent about any 

existing medical support orders.6

 Upon 

receipt of a notice from the IV-D agency, 

the new employer must enroll qualified 

children in its health plan, unless the 

noncustodial parent contests the notice. 

Orders issued to ERISA-covered plans are 

also subject to QMCSO requirements.7
CHAPTER 2

Page 2-4 Medical Child Support Working Group Report 

$ What is The Employee Retirement Income Security Act of 1974 (ERISA)? 

ERISA regulates most group health plans that are established or maintained by an employer, an employee 

organization, or jointly by both. However, ERISA does not cover those plans established or maintained by 

governmental entities or churches for their employees. Title I of ERISA8 imposes various duties and obligations 

on covered plans and their “fiduciaries” (such as the plan administrators). The administrators of covered plans 

must provide to participants and beneficiaries certain information regarding their plans. Each plan also must 

provide internal procedures for determination of benefit claims. Those individuals who manage covered plans 

(such as the administrators), and other fiduciaries with respect to those plans, must meet certain standards of 

conduct in performing their duties. The Pension and Welfare Benefits Administration of the Department of 

Labor has principal jurisdiction over these provisions. 

Of particular importance to State IV-D agencies is ERISA’s preemption of State laws. Subject to certain 

exceptions (such as the exception related to “qualified medical child support orders” described below) the 

provisions of ERISA supersede, or preempt, any State laws that “relate to” any ERISA-covered plan. Unless one 

of the exceptions applies, ERISA-covered plans are not required to follow (or may be precluded from following) 

such State law. For these purposes, the term “State law” includes all laws, decisions, rules, regulations, or other 

State action having the effect of law in any State. 

The broad preemption of State law contained in ERISA serves several important functions. Primary among these 

is to ensure that employee benefit plans are subject to a single, consistent set of rules. Particularly with respect to 

employers who operate in more than one State and collectively bargained plans whose participants work in 

different States, differing, and sometimes conflicting, State regulations could make plan design and 

administration extremely burdensome. A single set of Federal rules has greatly eased the creation and adoption 

of benefit plans across the country. However, Congress has also recognized that the broad preemption of State 

laws may, in some instances, cause problems with respect to areas that have traditionally been the province of the 

States, such as insurance regulation and domestic relations law. Accordingly, several exceptions to preemption 

have been included in ERISA. 

One exception to ERISA preemption is for the application of State insurance laws. In relation to this, it is 

important to understand that some group health plans (“self-insured plans”) provide benefits either from the 

plan’s or from the sponsor’s general assets. Other health plans (“insured plans”) provide benefits through the 

purchase of insurance (this generally includes situations in which a plan contracts with a managed care 

organization for the provision of benefits). Under the preemption exception for State insurance laws, insurance 

contracts purchased by ERISA-covered plans (and the insurance companies that sell them) remain subject to 

most State insurance laws, such as those that mandate the provision of particular benefits. Therefore, certain 

State laws may continue to affect ERISA-covered plans through the insurance contracts they purchase. For 

purposes of this exception, however, an employee benefit plan will not be deemed an insurer. 

Congress later added other important exceptions to ERISA preemption. First, in response to ambiguity regarding 

the applicability of State domestic relations orders to ERISA-covered plans, Congress amended ERISA in 1984 

(the Retirement Equity Act of 1984 [REA]) to permit the division of pension plan benefits in certain 

circumstances. Specifically, REA requires plans to pay benefits in accordance with “qualified domestic relations 

orders,” or QDROs. The REA amendments were limited to pension plans. Then, in response to similar issues 

regarding the applicability of medical child support orders to ERISA-covered group health plans, Congress 

amended ERISA in 1993 (OBRA 93) by adding §609(a), which requires group health plans to provide benefits in 

accordance with certain State court and administrative orders that provide for health coverage of children of plan 

participants (QMCSOs). The QMCSO provisions were modeled on the QDRO provisions. 

Section 609(a) has been amended several times, most recently by CSPIA and the Balanced Budget Act of 1997 

(BBA) in an effort to bring the QMCSO requirements into accord with the standards of Title IV-D of the Social 

Security Act. For instance, the BBA amended §609(a) to provide that a notice that is issued through an 

administrative process established under State law, and that has the force and the effect of law, and that provides 

for medical support for a child of a participant in a group health plan as described in §609(a) would be a 

QMCSO, provided that the other requirements of §609(a) are met. CSPIA further mandated the joint 

development of the NMSN that will result in a uniform notice that will be used by all states and local child 

support enforcement agencies, and that plan administrators must deem a QMCSO when it is appropriately 

completed. This will assist the States in automating their processes, as well as assuring plan administrators that 

the Notice they receive from IV-D agencies will be uniform in structure and content, reducing the confusion that 

currently exists regarding the adequacy of the notices used by such agencies. States are mandated to begin using 

the NMSN by October 1, 2001. 
CHAPTER 2

Medical Child Support Working Group Report Page 2-5 

!CSPIA

Child Support

Performance and

Incentive Act of 1998

!NMSN 

National Medical 

Support Notice 

Making changes in ERISA consistent with 

PRWORA, the Balanced Budget Act 

provided that the name and address of a 

State or local official could substitute for the 

address of a child named in a QMCSO, and 

that administrative notices issued by child 

support enforcement agencies to enforce 

medical support provisions of child support 

orders could be recognized as QMCSOs.9

CSPIA made additional changes to the 

medical support provisions of Title IV-D. 

These provisions eliminated the requirement 

that States pass laws to ensure the 

continuation of coverage due to employment 

changes, instituting instead the use of the 

NMSN to be implemented through 

regulations issued by HHS and DOL. The 

development and mandated use of the 

Notice was intended to make medical child 

support enforcement more amenable to the 

highly automated processes being developed 

for use for other child support enforcement 

actions. Federal laws that relate to the child 

support enforcement agencies’ medical 

support responsibilities are contained in 

various sections of Titles IV and XIX of the 

Social Security Act.14

Federal requirements currently in effect 

relating to medical child support are 

presented below. 

$ What is a Qualified Medical Child Support Order (QMCSO)? 

In order to be “qualified” (i.e., to be a QMCSO) within the meaning of §609(a) of 

ERISA, a medical child support order must clearly specify: (1) the name and last known 

mailing address (if any) of the participant and the name and mailing address of each child 

covered by the order; (2) a reasonable description of the type of coverage to be provided, 

or the manner in which the coverage will be determined; and (3) the period to which the 

order applies.10 A qualified medical child support order cannot require a group health 

plan to provide any type or form of benefit, or any option, not otherwise provided under 

the plan, except to the extent necessary to comply with a State law described in §1908 of 

the Social Security Act.11

Section 1908 of the Social Security Act, which, like the QMCSO provisions, was enacted 

as part of OBRA ’93, specifies certain laws that States are required to enact in order to 

qualify for Medicaid matching funds. The §1908 laws generally increase the availability 

of family health coverage to children. For example, some of these laws prohibit an 

insurer (defined to include all group health plans) from denying enrollment of a child 

under the coverage of the child’s parent on the ground that the child was born out of 

wedlock, is not claimed as a dependent on the parent’s tax return, or does not reside with 

the parent or in the insurer’s service area.12 Others set rules for insurers and employers to 

follow when a parent is ordered by a court or administrative agency to provide health 

coverage for a child and the parent is eligible for health coverage through that insurer or 

employer.13 Congress also amended ERISA so that preemption of the §1908 State laws is 

explicitly lifted to the extent they apply to a QMCSO.
CHAPTER 2

Page 2-6 Medical Child Support Working Group Report 

Procedures Under Current Law for IV-D 

Implementation of Medical Support 

❶ Establishing a Medical Support 

Order 

♦ Require disclosure of health care 

coverage in all support proceedings. 

♦ Include a provision for health care 

coverage in every order. 

♦ Consider the availability of health care 

coverage from noncustodial parents. 

♦ Ensure that health care coverage must 

be provided regardless of restrictions 

such as seasonal enrollments, residence 

of the child, or marital status of the 

parents. 

♦ Determine, if participant not enrolled 

and not specified in the order, in which 

benefit plan to enroll participant. 

❷ Enforcing Medical Support 

♦ Develop system for monitoring whether 

or not employer-based health care 

coverage as ordered by the court or 

administrative agency is obtained by the 

noncustodial parent. 

♦ Enforce health care coverage by 

administrative notice. 

♦ Ensure that the administrative notice is 

immediately issued upon an order being 

entered that requires coverage and 

thereafter, anytime a noncustodial parent 

employer becomes known (for example, 

through a New Hire lead, employment 

verification, etc.). 

♦ Monitor and enforce employer 

compliance with the administrative 

notice. 

❸ Communicating Availability of 

Health Care Coverage 

♦ Establish procedure for the State to 

communicate the availability of health 

care coverage through the noncustodial 

parent’s employer (that is, name and 

address of insurance carrier, type of 

coverage, group number, and policy 

number) to the Temporary Assistance to 

Needy Families (TANF) and Medicaid 

programs for public assistance-related 

cases and to the custodial parent. 

How Medical Support 

Enforcement Works (the Employer 

and Plan Community Perspective) 

Private health coverage through an 

employment-based group health plan is a 

significant benefit available to many 

employees. Employers often make health 

care coverage available as part of a package 

of benefits offered to some or all of its 

employees. This benefit package helps 

employers compete for and retain the 

workers they need. Cost and 

competitiveness are twin factors that help 

$ The Employer and Plan 

Community Perspective 

The employer and plan community 

perspective includes the U.S. 

Department of Labor, employers, 

and other entities such as health 

plan administrators and payroll 

administrators, insurance industry 

representatives and regulators, and 

labor unions. 
CHAPTER 2

Medical Child Support Working Group Report Page 2-7 

" For more

information on

HIPAA and COBRA,

see CHAPTER 6,

page 6-17.

employers decide what benefits to make 

available to their employees. Employers 

generally have discretion in deciding 

whether to establish a group health plan and 

in designing various aspects of the plan, 

such as eligibility and participation 

requirements and types of available benefits. 

Most group health plans maintained by 

private employers for their employees are 

subject to the provisions of ERISA. 

Contracts between plans and insurers 

(including Health Maintenance 

Organizations [HMOs]) may be governed by 

State insurance regulators. 

Because of the broad scope of ERISA 

“preemption,” whether a group health plan 

is subject to ERISA will determine the 

extent to which the plan will be subject to 

various State laws, including those related to 

medical child support, and whether 

enforcement of a medical support obligation 

requires a QMCSO. ERISA also contains 

certain provisions related to continuation 

and portability of health coverage that were 

added by the Consolidated Omnibus Budget 

Reconciliation Act of 1985 (COBRA) and 

the Health Insurance Portability and 

Accountability Act of 1996 (HIPAA), 

respectively. COBRA and HIPAA also 

added corresponding provisions to the 

Internal Revenue Code and the Public 

Health Services Act.15

Under the current medical support system, 

the IV-D program’s point-of-contact is the 

employer, but it is generally the plan 

administrator who makes the determination 

of whether a medical support order is 

qualified under ERISA and notifies the 

employee, the custodial parent, and the IV-D 

agency accordingly. 

An employer who maintains a group health 

plan generally has discretion in designating 

the party that will act as its plan 

administrator.16 In some cases, the 

employer may act as plan administrator. In 

other cases, an unrelated party may act as 

plan administrator. The latter is common in 

plans established pursuant to a collective 

bargaining agreement. In addition, the plan 

may employ a third-party contract 

administrator (TPA) to carry out the 

administrative functions of the plan. 

ERISA-covered group health plans must 

provide benefits under any medical child 

support order, including the new NMSN, 

that meets QMCSO requirements. Such an 

order must be submitted to the plan 

administrator to determine whether it is 

“qualified.” Each such plan also must have 

reasonable written procedures available to 

all parties for determining whether medical 

child support orders are qualified, and for 

administering the provision of benefits in 

accordance with such orders. Upon receipt 

of a medical support order, the plan 
CHAPTER 2

Page 2-8 Medical Child Support Working Group Report 

administrator must promptly notify the 

participant and each child named in the 

order that the order has been received and 

indicate the process that will be used to 

determine if the order is qualified. Within a 

reasonable time after receipt, the 

administrator must determine whether the 

order is qualified and notify the participant 

and each child named in the order of its 

determination. 

It is important to note that qualification as a 

QMCSO is not limited to orders that are 

established or enforced under the Title IV-D 

program nor to orders issued in the State 

where the employer normally does business. 

Plans have to provide the same benefits 

pursuant to any child support order that 

meets the ERISA definition of qualified. 

This means that plans (sometimes through 

their sponsoring employers) receive medical 

support orders (including administrative 

notices based on an underlying support 

order) from IV-D agencies, from private 

lawyers acting on behalf of clients, from 

noncustodial parents who want to enroll 

their children in their health benefit plan, 

and from custodial parents directly in 

situations where the noncustodial parent is 

unwilling to enroll the child(ren) as directed 

in the order. Because population mobility is 

high, the order or administrative notice may 

be issued in a State different from the one 

where the worker and employer currently 

have residence. 

After an order is determined to be qualified, 

the administrator then notifies the employer 

or the employer’s payroll agent of the 

premium amount to be withheld from the 

employee’s wages or salary. 

The Federal laws that relate to the 

employer’s and plan’s medical support 

responsibilities are contained in ERISA, 

Titles IV and XIX of the Social Security 

Act, the Public Health Services Act and 

Internal Revenue Code.17 Understanding 

how these provisions and procedures all fit 

together is difficult and the varied 

requirements of ERISA,18 COBRA,19 and 

HIPAA20 can easily confuse employers, plan 

administrators, child support agencies, 

courts, private attorneys, and parents trying 

to implement medical child support orders. 

Key provisions and procedures relating to 

medical child support, which the employer 

and plan community must implement in 

order to comply with Federal law, are 

presented below. 

Current Law Employer and Plan 

Procedures Necessary for 

Implementation of Medical Support 

❶ Employer Responsibility21

♦ Provide information under private 

discovery or at the request of the IV-D 

agency about the employee’s eligibility 

" See

insert box

“NMSN or

QMCSO:

What’s the

Difference?,”

page 4-3.
CHAPTER 2

Medical Child Support Working Group Report Page 2-9 

for or enrollment in dependent health 

care coverage. 

♦ For any qualified order, deduct 

premiums from employee’s pay (not to 

exceed the Consumer Credit Protection 

Act [CCPA] limits). 

❷ Plan Administrator 

Responsibility22

♦ If not provided as part of the discovery 

process when establishing an order, 

provide information under private 

discovery, or at the request of the IV-D 

agency, about the employee’s eligibility 

for or enrollment in dependent/family 

health care coverage. 

♦ Upon receipt of a medical child support 

order, promptly notify the participant 

and each child named in the order (and 

the IV-D agency if appropriate) that the 

order has been received and indicate the 

process that will be used to determine if 

the order is qualified. 

♦ Within a reasonable time after receipt, 

determine whether the order is qualified 

and notify the participant/employee and 

each child named in the order (and the 

IV-D agency if appropriate) of its 

determination. 

♦ Provide immediate coverage without 

regard to “enrollment season” 

restrictions or other factors, such as born 

out of wedlock, not claimed as 

dependent for income tax purposes, not 

living with parent, living outside 

insurer’s service area. 

♦ Provide a method for custodial parent to 

enroll the covered children in the plan 

(if noncustodial parent refuses to enroll), 

to obtain benefits, file claims directly, 

and receive payments. 

♦ Make benefit payments to custodial 

parent, or child, if they paid expenses. 

♦ To not terminate coverage unless the 

order is not in effect or dependent child 

is being enrolled in another plan. 

Prior Assumptions and

Inadequate Solutions

The Working Group looked at the 

assumptions that underlie the current 

medical support model and identified five 

outdated assumptions about private 

dependent health coverage that appear to 

limit the development of a system that can 

ensure health care coverage for all child 

support-eligible children. These 

assumptions are: 

❶ Custodial parents are not employed, 

therefore, only noncustodial parents can 

provide employer-based health care 

coverage.

❷ Noncustodial parents are employed at 

the same job for most of their working 

lives; therefore, once established, health 

care coverage will be stable. 

❸ Employer-provided dependent health 

care coverage is free or nearly free to 

employees; therefore, the cost of 

employer-provided dependent health 

care is reasonable. 

❹ Private family health coverage is fully 

portable, that is, it can provide health 

care coverage for the children even 

when children and the parent with 

coverage live far apart. Accordingly, 

the type of coverage offered and the 

geographic location of parent and child 

do not have to be taken into account. 

❺ The majority of children receiving 

publicly-funded health care (Medicaid 

and SCHIP) have noncustodial parents 

who could provide private health care 

coverage as an alternative to public 
CHAPTER 2

Page 2-10 Medical Child Support Working Group Report 

funded care; therefore pursuit of private 

health care coverage will reduce the 

number of children on Medicaid and 

SCHIP. 

❶ Prior Assumption #1: Custodial 

Parents Are Not Employed and Do 

Not Have Access to Health Care 

Coverage 

In contemporary society, most custodial 

parents participate in the paid labor force—

by choice, financial necessity, or the 

imposition of public policy—and thus may 

have access to family health coverage. In 

1995, over three-fourths of all custodial 

parents were employed during the year and 

48 percent were employed for a full year, on 

a full-time basis.23 Because private, 

employer-based insurance is the 

predominant form of health care coverage in 

the United States,24 when parents are 

employed they are more likely to have 

private health care coverage. For example, 

households with two employed parents are 

more likely to have family health coverage 

than two-parent households with only one 

employed parent, presumably because 

having two workers increases the likelihood 

of at least one parent having employmentbased health care coverage.25 But when the 

custodial parent is employed, children in 

single-parent households also have access to 

family health coverage. On average, over 

half of all children in employed singleparent households are covered by dependent 

health care coverage and an additional onequarter are offered health care coverage but 

have not enrolled.26 In single-parent 

households with incomes over 200 percent 

of poverty, more than 60 percent of children 

are covered by family health coverage 

provided by the custodial parent.27 As 

custodial parents’ full-time, full-year 

participation in the workforce increases, 

their access to dependent health care 

coverage also increases. 

❷ Prior Assumption #2: 

Employment and Health Care 

Coverage are Stable 

Some custodial and noncustodial parents 

have seasonal employment, part-time 

employment or frequently move from job to 

job. Even regular full-time employees 

typically change jobs as their children grow 

up. In 1998, median employee tenure (the 

number of years workers have been with 

their current employer) was approximately 

three and a half years.28 Estimates of job 

turn-over within the IV-D noncustodial 

parent population are even more frequent. 

For example, in one study, the median 

length of time for a wage assignment was 11 

months. Termination of employment is the 

usual basis for termination of a wageassignment.29 Obviously, stability of 

employment affects stability of health care 

coverage as well. In a review of custodial 

parents’ reports of health care coverage by 

the noncustodial parent, of the 2.5 million 

noncustodial fathers who provided health 
CHAPTER 2

Medical Child Support Working Group Report Page 2-11 

care coverage in at least one month of the 

year, about two-fifths, or 42 percent, 

provided coverage in all months.30 Of the 

remaining, about one-fifth lost insurance 

during the year, one-fifth gained insurance 

during the year, and one-fifth were in and 

out of coverage several times.31 This 

coverage churning reduces access for the 

children and increases administrative burden 

for the IV-D agencies. 

❸ Prior Assumption #3: Dependent 

Coverage is Available and Costs 

are Reasonable 

The majority of employers offer dependent 

health care coverage to their employees, but 

eligibility often is limited based on length of 

employment, hours worked, or employment 

status.32 Health care coverage is typically 

available only to permanent, full-time, yearround employees. Part-time and temporary 

employees are usually not extended benefits 

under the employer’s health care plan.33 

Low-wage workers are most likely to be 

part-time, temporary workers, which makes 

them ineligible for coverage. Indeed, data 

show that low-wage employees are not 

offered family health coverage as often as 

higher-income employees.34 In 1996, 42 

percent of workers who earned less than 

$7.00 an hour had access to employersponsored family health coverage, while 90 

percent of those who were paid more than 

$15.00 per hour benefited from employersponsored health care plans.35 (See graph, 

Percent of Workers with Employer 

Coverage by Wage, 1996.) 

Ct1:\feb99\aspe\JP-Insurance-2.pp - 7

Percent of Workers with Employer 

Coverage by Wage, 1996

Source: O’Brien and Feder 1998

73%

42%

67%

82%

90%

0%

20%

40%

60%

80%

100%

Overall < $7 per Hour $7-10 per

Hour

$10-15 per

Hour

> $15 per

Hour

Hourly Wage
CHAPTER 2

Page 2-12 Medical Child Support Working Group Report 

When family coverage is offered, employees 

may not enroll their children because—even 

when subsidized by the employer—the 

employee’s share of the premium may be 

too high relative to income. This is 

particularly true for low-wage employees.36 

According to an HHS analysis of Consumer 

Expenditure data, the employee’s 

contribution to health care coverage cost 

represents less than two percent of after tax 

income for families with incomes of more 

than $30,000 but nine percent of after-tax 

income for families with income of less than 

$10,000 per year.37 (See graph, Average 

Health Care Expenditures as a Percent of 

Income, 1997.) Because of rising health 

care costs, employers have tended to reduce 

coverage or to increase the amount of the 

employee’s contribution. For example, from 

1988 to 1996 the per capita cost for 

employers to obtain employee coverage rose 

by eight percent, while employee 

contributions to those costs increased by 18 

percent.38 During the same time period, the 

median earnings of American households 

increased less than two percent.39 Such 

trends put health care coverage enrollment 

for low-income parents in competition with 

earnings needed for food, clothing, shelter, 

and, if a noncustodial parent, payment of 

child support. 

Custodial and noncustodial parents of child 

support-eligible children fall 

Ct1:\feb99\aspe\JP-Insurance-2.pp - 8

Average Health Care Expenditures as a 

Percent of Income, 1997

8.81%

6.52%

5.04% 3.90%

1.78%

9.94%

6.22%

5.72%

4.25%

2.01%

2.45%

2.72%

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Total C omplete

Reporting

Less than

$10,000

$10,000 to

$14,999

$15,000 to

$19,999

$20,000 to

$29,999

$30,000 and

over

Other Health Care Expenditures as a % of the Average Income After Taxes

Health Insurance as a % of the Average Income After Taxes

Source: 1997 Consumer Expenditure Survey
CHAPTER 2

Medical Child Support Working Group Report Page 2-13 

disproportionately into the income 

categories of individuals who have less 

access to employer-based health care 

coverage and less ability to pay for 

coverage, even if offered. As “Percent of 

Workers with Employer Coverage by Wage, 

1996” graph indicates, over one half of 

individuals making less than $7.00 an hour, 

or below $14,500 per year, do not have 

employer-based coverage, and a third of 

individuals earning between $14,500 and 

$20,000 do not have coverage. Almost 45 

percent of all custodial parents have incomes 

below $20,000. For custodial parents in the 

IV-D system that proportion is even higher–

about 55 percent.40 While noncustodial 

parents have slightly higher incomes, a 

significant minority, about 38 percent, have 

incomes below $20,000 per year. While it is 

not possible to know from existing survey 

data which noncustodial fathers are 

associated with children in the IV-D system, 

an examination of noncustodial and 

custodial parent characteristics, such as race 

and ethnicity, marital status, and education 

would lead to an expectation that, like the 

custodial parents in the IVD system, the 

IV-D client noncustodial parents are also 

slightly poorer than the typical noncustodial 

parent.41

❹ Prior Assumption #4 : Distance 

Doesn’t Matter 

One of the pervasive problems of the child 

support enforcement system has been how to 

handle interstate cases.42 But the interstate 

perspective does not just affect collection of 

cash support; it also affects the provision of 

health care coverage. Between 25 and 30 

percent of all noncustodial parents live in a 

different State from their children.43 An 

additional 20 percent of fathers live in the 

same State, but not the same county or city 

as their children.44 When health care 

coverage was primarily offered through feefor-service plans, this long-distance 

relationship complicated establishing and 

enforcing medical support, but it did not by 

“IV-D agencies have the ability to help 

families identify the best choices for health 

care coverage. This coverage should include 

using a case triage as follows, see what kind of

insurance would work best for your family: 

♦ which parent has family health insurance 

at no cost; if none, then 

♦ which parent has family health insurance 

at the lowest cost or determine if the 

custodial parent wishes to provide 

insurance coverage and if she/he is willing 

to pay a higher premium to ensure stability

of coverage......; if none, then 

♦ are these parents eligible for Medicaid or 

CHIP coverage for the children; if no, 

then 

♦ use a medical support schedule which 

divides the cost of heath care between the 

parents. 

~ Geraldine Jensen, National President, ACES
CHAPTER 2

Page 2-14 Medical Child Support Working Group Report 

$ What is Medicaid? 

Overview 

Medicaid, the largest health insurer in the United States, provided health coverage for 20.8 

million children in 1998. Annual Medicaid expenditures for American children (including 

premium payment for prepaid health care) were $26.2 billion, an average of nearly $1260 per 

enrolled child.45 Approximately 40 percent of children who are eligible for IV-D services 

participate in the Medicaid program.46

Medicaid Eligibility 

There are several mandatory and optional Medicaid eligibility pathways for children and lowincome families. The primary mandatory pathways for children include: coverage for infants 

under age one (and pregnant women) with family income at or below 133 percent of the 

Federal poverty level (some States are required to cover children in this group up to 185 

percent of the Federal poverty level because they were already providing coverage at the 

higher level); coverage for children age one to six with family income at or below 133 percent 

of the Federal poverty level; and coverage for children born after September 30, 1983 who 

have not attained age 19 with family income at or below 100 percent of the Federal poverty 

level. States can expand coverage under these groups to children in families with higher 

income; this is possible under authority which allows them to disregard more income in the 

eligibility determination than is the case under the usual rules. 

The primary pathway for coverage of low-income families with dependent children (including 

two-parent families) is the so-called “§1931 eligibility group” (§1931 of the Social Security 

Act). Coverage under this group is linked to certain requirements the State had in effect on 

July 16, 1996 under the former Aid to Families with Dependent Children (AFDC) program. 

The State has the option to use certain less restrictive requirements, such as less restrictive 

financial requirements, than were in effect on July 16, 1996. 

Families that lose coverage under §1931 because of hours of work or income from 

employment (or loss of the earned income disregard) must be provided extended Medicaid 

benefits (“transitional Medicaid”) for six months. A second six-month period of coverage 

must be provided to any family who received transitional Medicaid during the initial sixmonth period, as long as the family meets certain reporting requirements and has earned 

income (minus necessary child care expenses) that does not exceed 185 percent of the Federal 

poverty level for the size of the family. To be eligible for transitional Medicaid, a family 

must have received Medicaid under §1931 in three out of the preceding six months before 

becoming ineligible under this category. 

In addition, States must provide Medicaid coverage to all pregnant women, infants, and 

children up to six years of age, as long as their family incomes are at or below 133 percent of 

the Federal poverty level for a family of three.47 In 2000, this cut-off point was $18,819.50.48 

Some States cover all children under age 19 to higher percentages of poverty.49

Medicaid eligibility is not affected by an individual’s enrollment in private health care 

coverage. When there is private coverage, individuals can still receive service through the 

Medicaid program, however, the Medicaid program is the payer of last resort. That is, the 

private health care coverage is responsible for payment of services. Medicaid only pays for 

those services not covered under the private plan.
CHAPTER 2

Medical Child Support Working Group Report Page 2-15 

itself affect the accessibility of that coverage 

for the children. The custodial parent could 

take the children to any doctor and the 

doctor, parent. or Medicaid agency would be 

reimbursed for the cost of care. 

Changes over the last decade in the way 

health care is provided have made 

“distance” a larger issue. In 1996, only 27 

percent of enrollees in employer health care 

plans were enrolled in conventional or feefor-service coverage. About one-third of 

enrollees were enrolled in HMOs and 

slightly more than 40 percent were enrolled 

in other managed care plans that had some 

provider choice limitations.50 In these plans, 

“out-of-network” providers could be used, 

but with higher cost sharing or lower level 

of coverage. These trends reduce the utility 

of having the out-of-State or out-of-area 

noncustodial parent be the preferred parent 

to obtain private health care coverage. To 

complicate the story, these trends vary 

significantly across the country. For 

example, 68 percent of enrollees in 

California are in HMO plans, while only 12 

percent of enrollees in North Dakota have 

HMO coverage.51

❺ Prior Assumption #5: Most 

MEDICAID/SCHIP Enrolled 

Children Could Have Private 

Coverage 

There is not much difference in the 

availability of employment-based health 

care coverage for custodial and noncustodial 

parents when employment and income are 

taken into account. As full-time 

employment increases and income rises, 

private health care coverage becomes more 

available and more affordable. To the extent 

that noncustodial parents have more fulltime employment and higher incomes than 

custodial parents, they are likely as a group 

to have more access to affordable private 

health care coverage. However, to the 

extent that some custodial and noncustodial 

parents share similar barriers related to 

employability, such as inadequate education, 

low job skills, or substance abuse problems, 

their lack of access to private health care 

coverage will be similar. 

A recent HHS study looked at the potential 

for noncustodial parents (only fathers) to 

provide private health care coverage for 

their children. The ability of the 

noncustodial parent to provide for such 

coverage was found to be largely dependent 

on the individual’s income.52 Nearly half of 

the noncustodial parents who do not provide 

coverage for their children do not have 

access to employer-sponsored dependent 

health care coverage, are self-employed, not 

employed, or incarcerated.53 Access to 

dependent coverage is greater for fathers 

who have incomes at 200 percent of poverty 

or above; only one-third of these fathers do 

not have access. 
CHAPTER 2

Page 2-16 Medical Child Support Working Group Report 

$ Medicaid and Child Support Enforcement 

As a condition of eligibility, individuals applying for medical assistance must cooperate with 

the State in establishing paternity and obtaining medical support and payments and in 

identifying and providing information to assist the State in pursuing third parties who may be 

liable for payment. In situations where a parent is filing for Medicaid on behalf of themselves 

and a child, it is a condition of the parent’s eligibility that the parent cooperate in establishing 

paternity and obtaining medical support.54 However, in cases where a parent (or legal guardian) 

is filing only on behalf of a child and not for him or herself, it is not a condition of the child’s 

eligibility for the parent to cooperate. 

There are two circumstances in which exceptions to the cooperation requirements may be made. 

A woman eligible for Medicaid under the poverty level pregnant woman category does not have 

to cooperate in establishing paternity and obtaining medical support payments from the father 

of an unborn child or a child born out of wedlock. In addition, if the State determines that an 

individual has good cause for refusing to provide the information sought, the applicant is not 

required to disclose the required information. 

$ What is the State Children’s Health Insurance Programs (SCHIP)? 

Concerned that many low-income families did not qualify for Medicaid and could not afford 

private insurance, Congress established the State Children’s Health Insurance Program (SCHIP) 

in 1997.55 SCHIP is the single largest expansion of family health coverage for children since the 

enactment of Medicaid. This program allows States to provide free or affordable health care 

coverage to uninsured children in families whose incomes are too high to qualify for Medicaid 

but too low to afford private coverage.56 SCHIP is not intended to replace private insurance but 

rather to serve as the provider of last resort, where private health care coverage is unaffordable 

or unavailable. 

The Federal government provides matching funds for SCHIP programs, and States have 

flexibility to structure the program to meet local needs. A State can expand its coverage for 

uninsured, low-income children by using its Medicaid program to provide services to SCHIPeligible children or establishing a separate child’s health care coverage program, or do both. 

SCHIPs, like Medicaid, are not fully utilized by all eligible children. However, State reported 

enrollment data for the Federal Fiscal Year 1999 show that SCHIP is making a significant 

contribution toward the goal of reducing the number of uninsured children in the United Sates. 

As of September 1999, nearly two million children were served by SCHIP: close to 700,000 

children were served by State expansions of existing Medicaid programs and over 1.2 million 

children have been covered through separate SCHIP funded child health programs.57 

Enrollment remains a top priority. Almost 75 percent of the 3 million uninsured child supporteligible children have family incomes below 200 percent of poverty, making them potentially 

eligible for SCHIP or Medicaid.58

Eligibility

In general, children are eligible to participate in SCHIP if their family income exceeds the 

maximum limit for Medicaid coverage in their State, but is at or below 200 percent of the 

Federal poverty level. In some States, eligibility extends beyond this to 350 percent.59 States 

can impose premiums or require co-payments and deductibles from parents of children in the 

SCHIP program, so long as the total amount required does not exceed five percent of the 

families’ monthly gross income.60
CHAPTER 2

Medical Child Support Working Group Report Page 2-17 

However, the picture is much bleaker for 

fathers with incomes below 200 percent of 

poverty; almost three-fourths of these 

fathers have no access to dependent health 

care coverage. The study estimates that over 

four million noncustodial parents, three 

million low-income fathers, and one million 

fathers with incomes over 200 percent of 

poverty, have no access to employerprovided dependent coverage.61 These 

fathers are likely to be the noncustodial 

parents of children enrolled in or eligible for 

Medicaid and SCHIP. 

Assumptions for the New Medical

Support Paradigm

When old assumptions do not fit the facts, 

new ones need to be formulated. Based on 

the extensive information the Working 

Group heard, read, and discussed, a set of 

new underlying assumptions about access to 

health care coverage emerged. 

❶ New Assumption #1 

Because both custodial and noncustodial 

parents are likely to be employed, both 

parents should be looked to for the 

possibility of private health care coverage. 

When both parents are considered, children 

have a better chance of getting private 

coverage. 

❷ New Assumption #2 

Lack of job stability affects a parent’s ability 

to provide health care coverage. Pursuing 

private coverage from parents who have a 

history of frequent job changes can increase 

administrative costs for both IV-D agencies 

and employers without children being better 

off. Stability of employment should be a 

factor in considering whether to pursue 

private health care coverage. 

❸ New Assumption #3 

Dependent health care coverage is incomesensitive. Relative to income, it is much 

more expensive for low-and moderateincome parents to carry coverage than for 

middle- and upper-income families. Unless 

coverage is offered at no or very low cost, 

neither custodial nor noncustodial parents 

whose income is at or near the poverty line 

should be required to provide private health 

care coverage. 

❹ New Assumption #4 

Accessibility to coverage needs to be 

considered as part of the decisionmaking 

process. If children do not have geographic 

access to the dependent health care coverage 

available from their noncustodial parent, 

purchase of such coverage should not be 

required. 
CHAPTER 2

Page 2-18 Medical Child Support Working Group Report 

❺ New Assumption #5 

Not all child support-eligible children will 

have access to private family health 

coverage because many noncustodial parents 

have the same type of access limitations to 

private health care coverage as low- and 

moderate-income custodial parents. Private 

health care coverage should be pursued 

when it is available to determine if it could 

expand coverage options. But when private 

coverage is not available or appropriate, 

other means of coverage, such as Medicaid, 

SCHIP, or other group plans should be 

pursued. 

A chart of the major components of the new 

paradigm that encompasses the 

recommendations of the Working Group is 

presented on the following page. 

In the new medical support model, private 

health care coverage remains central and 

employers remain key stakeholders to 

accessing private health care coverage for 

children. The IV-D child support agencies 

and courts would consider health care 

coverage that is available to both the 

custodial parent and the noncustodial parent. 

The new model would consider the stability 

of parent’s employment and family health 

coverage so that administrative efforts by all 

stakeholders would be commensurate with 

the gain in health care coverage for children. 

The new model also would look at the 

relationship between premium cost and 

gross income to determine if employmentbased coverage is reasonable in cost. 

Children’s ability to actually receive 

services through private coverage would be 

an important consideration. Where private 

insurance is unavailable or unreasonable 

given the financial resources of the parents, 

State child support enforcement agencies 

would advise families that they may qualify 

for public health care coverage (or help 

them obtain such benefits). The lack of 

reciprocal referrals are a critical failing 

within the present system. Private health 

care coverage currently is sought when 

children are in publicly-funded health care 

programs, but when private health care 

coverage is not available, families are not 

usually informed about their children’s 

eligibility for publicly-funded health care. 

“Determine which parent has the better health 

plan, ... sign up the child for that health plan 

and then apportion costs according to the 

parent's ability to pay. If only one parent has 

a health plan, sign up the child for that health 

plan, and then apportion costs accordingly. If 

neither parent has a health plan, you might 

consider what we've learned California 

has....[a] new health plans just for kids.... If 

you don't find two parents with plans or even 

one parent with a plan, in California you can 

sign up your child in a low-cost plan.” 

~David Levy, President, Children's Rights 

Council 
CHAPTER 2

Medical Child Support Working Group Report Page 2-19 

The Working Group’s New Paradigm 

Increase the Number 

of Children in SingleParent Households 

with Health Care 

Coverage 

It is in the best interest of both children and the nation that the 

maximum number of children have access to health care 

coverage. Lack of such coverage affects children’s current and 

future health and their ability to be productive citizens. 

Moreover, when lack of care leads to poor health, the short- and 

long-term costs to employers, insurers, and publicly-funded 

health programs such as Medicaid and Medicare increases. 

Appropriate Private 

Dependent Health 

Care Coverage Comes 

First 

Parents share primary responsibility for meeting their children’s 

needs. When one or both parents can provide comprehensive, 

accessible, and affordable health care coverage that coverage 

should be provided to the child. 

Look to Both Parents 

as a Source of 

Coverage 

Coverage available to both parents should be considered in 

setting a medical support obligation. If only the custodial parent 

has coverage, that coverage should be ordered and the 

noncustodial parent should contribute toward the cost of such 

coverage. When both parents are potentially able to provide 

coverage, the coverage available through the custodial parent 

(with a contribution toward the cost by the noncustodial parent) 

should normally be preferred as it: 1) is most likely to be 

accessible to the child; 2) involves less difficulty in claims 

processing for the custodial parent, the provider, and the insurer; 

and 3) minimizes the enforcement difficulties of the child 

support agency or private attorney responsible for the case. 

Affordable Coverage 

In deciding whether to pursue private coverage, the cost of 

coverage should be considered. To the maximum extent 

possible, public dollars (through, for example, enrollment in 

Medicaid/SCHIPs) should be the payment of last resort. 

However, private insurance should not be ordered when its cost 

significantly lowers the amount of cash support available to 

meet the child’s basic needs and the child is eligible for some 

other form of coverage. 

Accessible Coverage 

When private health care coverage is available to a child, the 

child support enforcement agency should consider the 

accessibility of covered services before it decides to pursue the 

coverage. Children should not be enrolled in any plan whose 

services/providers are not accessible to them, unless the plan 

can provide financial reimbursement for services rendered by 

alternate providers. 

Seamless Coverage 

The child support (IV-D) program should work in close 

conjunction with Medicaid/SCHIPs to ensure that children who 

have access to private coverage obtain such coverage, and those 

who are eligible for publicly-subsidized coverage are covered 

by Medicaid or SCHIPs. 
CHAPTER 2

Page 2-20 Medical Child Support Working Group Report 

Summary

Twenty-one million children will be affected 

by this new medical child support model. 

Once implemented, the new model will 

improve the ability of mothers and fathers to 

fulfill their shared responsibility of 

providing for their children’s health care 

needs. It will assist private attorneys, courts, 

and the IV-D system to identify all coverage 

options and to enroll children in the most 

appropriate private or public health care 

coverage. The new model will also improve 

the efficiency with which the IV-D system, 

employers, and plan administrators can get 

children enrolled in private coverage to 

ensure that lapses in coverage are 

minimized. Lastly, the new model will 

provide for better coordination between the 

IV-D system and publicly-funded health 

programs, so that children without private 

coverage can be enrolled in Medicaid or 

SCHIP. The goal of the new model is clear: 

To increase private health care coverage and 

to reduce the number of children with no 

coverage without a significant increase in 

cost for parents, health services providers, 

employers, insurance companies, and the 

American taxpayer. 

Endnotes

 

1

 Personal Responsibility and Work Opportunity 

Reconciliation Act (PRWORA), Pub. L. 104-193 

and the Child Support Performance and 

Incentive Act (CSPIA), Pub. L. 105-200. 

2.45 CFR sections 302.80, 303.30 and 

303.31 (1990). 

 

3

 42 U.S.C. §667(b) (1998). The State 

guideline applies to all orders for child 

support whether or not the custodial parent 

is receiving services under the IV-D 

Program. 

4

 45 CFR 303.30 and 303.3. 

5

 42 U.S.C. §652(f) (1999). 

6.42 U.S.C. §666(a)(19) (1999). 

7.29 U.S.C. §1169(a). 

8.29 U.S.C. §1001 et. seq 

9

 Pub. L. 105-33, §5611 and §5613. Note that 

recognition as a QMCSO requires that the order 

satisfies the requirements of §609(a). 

10 29 U.S.C. §1169(a)(3). 

11 29 U.S.C. §1169(a)(4). 

12 42 U.S.C. §1396g(a)(1). 

13 42 U.S.C. §1396g(a)(2) and (3). 

14.Pub.L.105-33. 15.Pub.L. 99-272 (COBRA) and Pub.L. 104-191 

(HIPAA). For full citations to these Acts, see 

U.S.C. Tables volumes. 

16 29 U.S.C. §1002(16). 

17 The provisions of ERISA are located at 29 

U.S.C. §1001 et. seq.; Title IV of the Social 

Security Act at 42 U.S.C. §601 et. seq.; Title 

XIX of the Social Security Act at 42 U.S.C. 

§1396 et. seq.; the Public Health Service Act at 

42 U.S.C. §300 et. seq.; and the Internal 

Revenue Code at 26 U.S.C. 

18 Pub. L. 93-406, 88 Stat. 829, which generally 

appears as 29 U.S.C. 1001 et. seq. For full 

classification of this Act, consult U.S.C. Tables 

volumes. 

19 Pub. L. 99-272, 100 Stat. 327 at 4001. 

20 Pub. L. 104-191, 110 Stat. 1992, codified in 

various sections of the U.S. Code. 

21 Under Social Security Act, §466(a)(19). 

22 Under ERISA, §609(a). 

23 Scoon-Rogers, Lydia. “Child Support for 

Custodial Mothers and Fathers: 1995.” Census 

Bureau Current Population Reports (March 

1999), 60-196. 

24. The U.S. Census Bureau reports that 63.3 

percent of all children were covered by 

employment-based health plans in 1998 (U.S. 

Department of Commerce, Bureau of the Census, 

Health Insurance Coverage: 1998, Table 6). 

25 Weinick, Robin and Alan C. Monheit. 

“Children’s Health Insurance and Family 

Structure.” Medical Care Research and Review, 

56:1 (March 1999), 66. 

26 Weinick and Monheit, 66. 

27 Wheaton, Laura. “Noncustodial Fathers: To 

What Extent do They Have Access to Health 
CHAPTER 2

Medical Child Support Working Group Report Page 2-21 

 

Care Coverage?” The Urban Institute (2000), 

27. 

28 Bureau of Labor Statistics, Employee Tenure 

in 1998. See 

http://www.bls.gov/news.release/tenure.nws.htm

29 Gordon, Anne. Income Withholding, Medical 

Support, and Services to Non-AFDC Cases after 

the Child Support Amendments of 1984, Volume 

1, Mathematica Policy Research, Inc. (1991). 

Under Contract with the Department of Health 

and Human Services/Office of Child Support 

Enforcement. 

30 Gordon (1991). 

31 Wheaton (2000), 39. 

32.See O’Brien, Ellen and Judith Feder. 

Employment-Based Health Insurance Coverage 

and Its Decline: The Growing Plight of LowWage Workers. The Kaiser Commission on 

Medicaid and the Uninsured (May 1999). 

33. United States Government Accounting Office, 

Report to Congressional Committees, 

Employment Based Health Insurance (July 

1998), GAO/HEHS-98-184, Table 3. (Eligibility 

rate of part time employees was about 31 

percent, in contrast to a rate of more than 80 

percent for full-time workers in 1997.) 

34.United States Government Accounting Office, 

Report to Congressional Committees, 

Employment Based Health Insurance (July 

1998), Table 2. 

35.O’Brien, Ellen and Judith Feder, How Well 

Does the Employment-Based Health Insurance 

System Work for Low-Income Families? Kaiser 

Commission on Medicaid and the Uninsured 

(September 1998), 4. 

36 O’Brien and Feder (1999), 5.

37 Unpublished estimates by the U.S. Department 

of Health and Human Services, Office of the 

Assistant Secretary for Planning and Evaluation, 

using the 1997 Consumer Expenditure Survey. 

38.O’Brien and Feder (1998), 5. 

39 McNeil, John. Changes in Median Household 

Income: 1969 to 1996. U.S. Bureau of the 

Census (July 1998), 23-196, Table 5b. 

http://www.census.gove/hhes/incom/mednhld/t5

b.html

40 Lyon, Matthew. “Characteristics of Families 

Using Title IV-D Services in 1995.” U.S. 

Department of Health and Human Services, 

Office of the Assistant Secretary for Planning 

and Evaluation (May 1999), Table 1. 

41 Sorensen, Elaine and Laura Wheaton, Income 

and Demographic Characteristics of NonResident Fathers in 1993, The Urban Institute, 

(forthcoming June 2000). Prepared under 

 

contract with the Department of Health and 

Human Services, HHS 100-95-0021. Note that 

information on custodial parents from the Lyon 

analysis includes both custodial mothers and 

custodial fathers, while information on 

noncustodial parents from the Sorensen and 

Wheaton report is available for fathers only. 

42 U.S. Commission on Interstate Child Support, 

“Supporting Our Children: A Blueprint for 

Reform.” 

43 See, for example, Lyon (1999), 4; U.S. 

Commission on Interstate Child Support, 

“Supporting Our Children: A Blueprint for 

Reform,” xii; and Wheaton (2000), 19. 

44 Wheaton (2000), 15. 

45.HCFA, Office of the Actuary, President’s FY 

2001 Budget Baseline 

46 1996 March-April Match File Current 

Population Survey. See data tabulations in 

APPENDIX D: Health Care Coverage for Child 

Support-Eligible Children, page A-32. 

47 42 U.S.C. §1396a(10)(A)(i)(III) (1999). 

48.Annual update of the Department of Health 

and Human Services poverty guidelines for CY 

2000–As published in the Federal Register, Vol. 

65, No. 31, February 15, 2000, 7555-7557. 

49.They may cover children in families with 

incomes up to 185 percent of the poverty level 

for a family of three. 42 U.S.C. §§1396a; 1396r6(b)(3)(B)(iii)(III) (1999). This level was 

$26,177.50 in 2000. Annual Update of the HHS 

Poverty Guidelines, published in the Federal 

Register 2/15/00. 

50 Levitt, Larry, Janet Lundy, and Srija 

Srinivasan. Trends and Indicators in the 

Changing Health Care Marketplace Chartbook. 

The Kaiser Family Foundations (August 1998), 

18. 

51 Levitt, Lunday, and Srinivasan, 21. 

52.Wheaton (2000), 34. 53.Wheaton (2000), 36. 54.Section 1912(a)(1). 55.42 U.S.C. §1397aa et seq. (1999). 56.42 U.S.C. §1396aa (1999). 57.U.S. Department of Health and Human 

Services, State Children’s Family health 

coverage Program Annual Enrollment Report 

(Fiscal Year 1999) (January 2000). 58.1996 March-April Match File Current 

Population Survey. See data tabulations in 

APPENDIX D: Health Care Coverage for Child 

Support-Eligible Children, page A-32. 

59 New Jersey’s separate SCHIP program 

includes eligibility up to 350 percent of the 

Federal poverty level. In Connecticut, Missouri, 
CHAPTER 2

Page 2-22 Medical Child Support Working Group Report 

 

New Hampshire, Rhode Island, and Vermont 

SCHIP extends eligibility to 300 percent of the 

Federal poverty level. 

60.42 U.S.C. §1397bb (1999). 61 Wheaton (2000), 36. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-1 

CHAPTER 3.

Taking the First Step:

Establishing Health Care

Coverage in Child

Support Orders

State Child Support Guidelines

As discussed in the introduction to this 

Report, the current medical child support 

model is based on a number of outdated 

assumptions. They include: (1) mothers are 

not in the paid labor force, (2) fathers are 

employed at the same job for most of their 

working lives, and (3) employers provide 

free or nearly free dependent health care 

coverage to their employees. Because 

presumptive State child support guidelines 

may be based upon these erroneous 

assumptions, they fail to maximize private 

family health coverage enrollment for 

children in single-parent households. 

The first assumption, that mothers are not in 

the paid labor force, is clearly incorrect, as is 

testified to both by most people’s experience 

!CHAPTER 3 AT A GLANCE

STATE CHILD SUPPORT GUIDELINES, 3-1 

ROLE OF THE DECISION MAKER – ADMINISTRATIVE AGENCY, COURT, OTHER 

“TRIBUNAL,” 3-4 

Coverage Options – Need for Information, 3-4

Decisionmaking Principles, 3-6

Children with Special Needs, 3-16

The Decision “Matrix,” 3-17

Establishment of Orders for Publicly-Funded or Other Alternative Health Care 

Coverage, 3-22

Public Payment for Private Coverage, 3-23 

Role of the IV-D Agency, 3-24

Enrollment Authority, 3-25 

Contribution by the Noncustodial Parent, 3-26

Birthing Costs, 3-29

Apportioning Responsibility for Unreimbursed Health Care Expenses, 3-31

Drafting the Medical Support Provisions of a Child Support Order, 3-34

Theme

The place to start reform is at the beginning, with order establishment. State child support 

guidelines are required to address how health care coverage will be provided, and it is 

important that each order include the health care coverage that is best for the child. The 

guidelines presented in this chapter lay out a matrix that directs the decision maker to 

consider the entire range of coverage options available to the child, including private 

coverage from either parent and, when appropriate, public coverage. In determining 

which coverage is best, the decision maker should consider not only availability, but other 

factors that influence the likelihood that the child will be appropriately and consistently 

insured, such as accessibility, comprehensiveness, and affordability. When the child is 

ordered into the appropriate coverage from the start, it will not only benefit the child, but 

will also reduce administrative and enforcement activity on the part of the IV-D agency, the 

insurer, and the parents. 
CHAPTER 3

Page 3-2 Medical Child Support Working Group Report 

as well as by government and academic 

studies. In the majority of households, both 

parents participate in the workforce. Thus, 

either parent may have access to 

employment-based family health care 

coverage. 

In families with a formal child support 

order, 16 percent of these agreements order 

the custodial family to provide coverage and 

37 percent order the noncustodial parent to 

provide it.1

 Among all custodial mother 

families, with or without a court order for 

support, 35 percent of the custodial parent 

families actually provide health care 

coverage for the child support-eligible 

children. The noncustodial parent, or 

someone else outside the household, 

provides health care coverage for 24 percent 

of these families.2

Yet the Working Group found that only 27 

States’ child support guidelines direct the 

decision maker to consider both parents as 

potential sources of health care coverage.3

 

Within these States, recognizing the 

custodial parent’s employer as a potential 

source of insurance has clearly paid off. 

The remaining States’ child support 

guidelines do not require consideration of 

coverage available to the custodial parent. 

In the worst case scenario in these States, 

children may not be enrolled in family 

health coverage at all. If no coverage is 

available through the noncustodial parent, 

and if the noncustodial parent has not been 

ordered to contribute to the cost of coverage 

under the custodial parent’s plan, then the 

children may remain uncovered, as the cost 

of coverage is often prohibitive for the 

custodial parent alone. In other instances, 

the children in these States may indeed have 

family health coverage, but they may not be 

enrolled in the family health coverage plan 

that best meets their needs because the 

custodial parent’s coverage has not been 

considered. 

For these reasons, the Working Group 

recommends amendment of Federal 

regulations to require States to revise their 

child support guidelines so that decision 

makers are required to explore health care 

coverage available to both parents.4

“[W] hat I want to press home is [that] 

the great [child support] legislation 

that's [been] enacted by the Congress of 

the United States just happens to 

[be]...best practices that have been 

tested, that have been validated, and that

have been proven reliable by other 

states. So what about this—what some of

you may think to be a revolutionary 

thought—involving custodial parents in 

medical support: we found that there are 

some 27 States that are enforcing 

medical support against both the 

biological parents.” 

~Richard Harris, Director, Division of 

Child Support Enforcement, Mississippi 
CHAPTER 3

Medical Child Support Working Group Report Page 3-3 

The Working Group also found that even 

when the State’s child support guidelines 

direct the decision maker to look at coverage 

available to both parents, IV-D programs 

focus almost exclusively on the noncustodial 

parent. This is because Federal child 

support statutes and regulations assume that 

the noncustodial parent is the only possible 

source of coverage mandated, as well as 

because the historical mission of the IV-D 

program was to establish and enforce 

obligations against noncustodial parents.5

 

Some States reported that they did not 

pursue custodial parent coverage because 

they believed it was not a proper IV-D 

program activity. This practice has to 

change in order to maximize the number of 

children who receive private coverage. 

For this reason, the Working Group also 

recommends that Federal regulations at 45 

CFR §303.31 be amended to make it clear 

that IV-D agencies can and should consider 

health care coverage available to either 

parent when they establish or modify a 

medical child support order. #See 

Recommendation 1.

Ensuring that IV-D agencies consider health 

care coverage available to either parent 

when they establish or modify a medical 

child support award is, however, just a first 

step. It is also necessary to set clear 

guidelines regarding allocation of the costs 

between the parents. When the custodial 

parent provides and pays for the children’s 

health care coverage, the noncustodial 

parent should share the cost of any required 

premiums. The child support order should 

require the noncustodial parent to do so, and 

the amount of the child support payment 

should increase accordingly. On the other 

hand, when the noncustodial parent provides 

and pays for the children’s health care 

coverage, the cash support obligation may 

need to be adjusted (and in many cases 

already is) to reflect the cost of the 

coverage. 

Towards this end, the Working Group 

recommends that child support guidelines 

include formulas for determining how the 

amount of the cash support award should 

increase or decrease in order to account for 

health care premiums, and child support 

orders should clearly specify how such 

amounts are to be allocated between the 

parents. Specifically, HHS should amend 45 

#Recommendation 1 (Federal Regulation) 

The HHS should require each State to maximize the enrollment of children in 

appropriate health care coverage; the first recourse should be appropriate 

private coverage of either parent. (“Appropriate coverage” is defined in 

Recommendation 8.)
CHAPTER 3

Page 3-4 Medical Child Support Working Group Report 

CFR §302.56 to require that State child 

support guidelines include clear methods of 

adjusting child support awards to reflect the 

manner in which the parents will share the 

cost of premiums associated with the 

children’s health care coverage.6

At this time, States use different approaches 

to allocate health care costs between the 

parents. Nineteen States and the District of 

Columbia7

 deduct the premium cost from 

the income of the parent who provides the 

coverage before calculating the amount of 

the child support obligation. Twenty- nine 

States8

 calculate the basic child support 

obligation and then they add some or all of 

the children’s family health coverage cost to 

the support award if the custodial parent is 

providing coverage, or they deduct the 

amount from the child support obligation if 

the noncustodial parent is providing 

coverage. Two States9

 treat family health 

coverage costs as a reason to deviate from 

the presumptive amount determined under 

the child support guidelines. 

Furthermore, the 29 States that allocate 

premium costs between the parents and 

add/subtract the amount from the basic cash 

award vary substantially in how costs are 

allocated. In four of these States, for 

example, the parent providing the coverage 

bears the entire cost.10 In other States, the 

cost is split fifty-fifty.11 In still others, the 

cost is prorated.12 Where an allocation takes 

place, most States include only the marginal 

cost of covering the children, while the rest 

allocate the entire cost of family coverage.13

Clearly, there is currently no agreement 

between States as to a “best practice” 

regarding adjusting child support obligations 

to include health care premiums, so at this 

time the Working Group is not 

recommending a national standard for 

allocating premium costs. #See

Recommendation 2.

Role of the Decision Maker –

Administrative Agency, Court,

Other “Tribunal”

Coverage Options – Need for 

Information 

The decision maker needs information about 

health care plans that are available to both 

parents in order to: (1) determine whether 

either has reasonable access to private health 

care coverage that is accessible to the child, 

#Recommendation 2 (Federal Regulation) 

Each State’s child support guidelines should show how the cost of health 

care coverage will be allocated between the parents. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-5 

(2) allocate costs, and (3) draft the medical 

support order. The parents themselves are 

the best source of this information. 

Recognizing this, Alabama and New York 

enacted statutes that require both parents in 

all child support proceedings to provide 

information about any group health plans 

available to them.14

The Working Group recommends that HHS 

amend 45 CFR §303.31 to oblige all States 

to require each parent to disclose 

information about available private group 

health care coverage as a part of the State 

child support guidelines. #See

Recommendation 3. 

Furthermore, while IV-D agencies currently 

have the authority to request information 

about health care coverage available or 

potentially available to a parent from 

employers,15 many agencies are either not 

aware of this or they do not understand the 

potential value of gathering family health 

coverage information before a support order 

is established or modified. 

Section 466(c) of the Social Security Act 

permits IV-D agencies to request 

information from employers and engage in 

individual case discovery. This will help 

States learn which employers offer 

dependent coverage to at least some of their 

employees and which do not. As State child 

support agencies obtain this information, 

they can begin (or continue) to build their 

own databases. They can supplement this 

information with data from other sources, 

such as Temporary Disability Insurance 

carriers or the Medicaid agency. States 

should be encouraged to do this so that they 

can begin to determine when they should 

request further information and when such a 

request would be futile. For example, if the 

State database shows that Corporation ABC 

does not provide dependent coverage to any 

of its employees, the IV-D agency would not 

request health care information from 

#Recommendation 3 (Federal Regulation) 

Each State should develop mechanisms that require both parents to disclose 

information about actual and potential private health care coverage in order 

to help the decision maker determine whether private coverage is available to 

either parent. 

#Recommendation 4 (Federal Regulation) 

States should use existing automated databases providing information about 

private health care coverage available through employers or use insurers’ 

databases. Such databases need not contain information about the types of 

benefits offered, only whether dependent coverage is offered by an employer. 

For further details about the development of or modification to such 

databases, see Recommendation 64. 
CHAPTER 3

Page 3-6 Medical Child Support Working Group Report 

!NMSN

National Medical

Support Notice

Corporation ABC. #See

Recommendation 4.

For this reason, in addition to 

recommending that States require parents to 

disclose family health coverage information, 

the Working Group also recommends that 

the Federal Office of Child Support 

Enforcement (OCSE) inform State child 

support agencies that they need to request 

health coverage information from 

employers. This disclosure of coverage 

information by employers and plan 

administrators is particularly important since 

many employers offer more than one plan to 

their employees,16 and the decision maker 

must be familiar with all of the available 

options in order to determine the best health 

care choice for the children. 

In addition, DOL should make it clear to 

plan administrators that they must provide 

information on ERISA-covered health care 

plans when it is requested for the purpose of 

drafting a QMCSO, including completing a 

NMSN.17 The Working Group suggests that 

DOL include this information in the booklet 

that is proposed in Recommendation 32. 

#See Recommendation 5.

Decisionmaking Principles 

There are three basic principles that should 

be considered when making decisions about 

coverage options for children’s health care: 

♦ Coverage should be comprehensive. 

♦ Coverage should be accessible and 

stable. 

♦ Coverage should be affordable. 

Because continuity of care is very important, 

existing family health coverage should be 

maintained—regardless of which parent 

provides it—if it is comprehensive, 

affordable, and reasonably accessible. In 

Massachusetts, the law provides that if the 

custodial parent is currently providing 

coverage at a lower cost, or if the custodial 

parent prefers to maintain the coverage, 

irrespective of cost, the decision maker 

should not move the child to the 

noncustodial parent’s coverage.18

The decision maker, however, should have 

#Recommendation 5 (Federal Guidance) 

To further expand the ability of IV-D agencies to obtain information about 

actual and potential health care coverage available to both parents, OCSE 

should inform these agencies that §466(c)(1)(C) gives the agencies the 

authority to request health care benefits information from employers before 

they establish a medical support order. In conjunction with this, the DOL 

should inform plan administrators subject to ERISA that they must respond 

to such IV-D requests when they are made for the purpose of drafting a 

Qualified Medical Child Support Order (QMCSO). (See Recommendation 29.) 
CHAPTER 3

Medical Child Support Working Group Report Page 3-7 

authority to order a change of coverage if 

that is in the best interest of the child. If, for 

example, the noncustodial parent has 

coverage that is accessible to the child and is 

available at no cost, while the custodial 

parent’s coverage is very expensive, there is 

good reason to change. If the custodial 

parent’s coverage is maintained, there will 

be less money available to meet the child’s 

other basic needs. In such a case, then, the 

child would probably benefit from a change 

in coverage. #See Recommendation 6.

Central to this decisionmaking process 

regarding the appropriateness of coverage is 

a determination of comprehensive coverage. 

States need to establish a definition of 

comprehensive coverage that will be used to 

evaluate insurance options. 

Some plans are so limited, for example, that 

they do not meet the child’s basic needs. 

Ordering such limited coverage may make 

the child ineligible for the State’s CHIP, 

since SCHIP is limited to children with no 

coverage.19 The Working Group determined 

that to be considered comprehensive, 

coverage must include at least medical and 

hospital coverage; provide for preventive, 

emergency, acute, and chronic care; and 

impose reasonable deductibles and copayments. When comparing different plans 

to determine which is most comprehensive, 

the decision maker should consider basic 

dental coverage, orthodontics, eyeglasses, 

mental health services, and substance abuse 

treatment, and how such benefits meet each 

child’s unique needs. When both parents 

have access to private coverage, an 

established definition of comprehensive

coverage will provide States with a standard 

for determining which of the available plans 

is superior. 

In addition to ensuring that the most 

comprehensive coverage is ordered, decision 

makers must also ensure that the selected 

health care will be geographically accessible

to the child—if it is not accessible, it is 

useless. Fee-for-service coverage is usually 

portable and does not raise access issues, but 

HMO and Preferred Provider Organization 

(PPO) coverage is frequently available only 

in limited geographic areas. Alternatively, 

#Recommendation 6 (Federal Legislation) 

If the child is presently enrolled in either parent’s private health care 

coverage and the coverage is accessible to the child, that coverage should 

be maintained. If, however, one of the parents has more appropriate 

coverage (as determined in accord with Recommendation 8 through 

Recommendation 11) and either parent requests that the child be enrolled in 

this plan, the decision maker shall determine whether or not to maintain the 

existing coverage based upon the best interests of the child. 

" See 

discussion of 

wrap around in

CHAPTER 8, 

page 8-5. 
CHAPTER 3

Page 3-8 Medical Child Support Working Group Report 

reimbursement for the utilization of out-ofnetwork providers may result in a lesser 

reimbursement payment and/or higher 

deductible and copayments. When the child 

lives in a different community from the 

parent who is ordered to provide coverage, 

the child may only be able to utilize the 

coverage for emergency services. These 

problems are minimal if the HMO has 

agreements with providers outside its 

service area. Such agreements allow the 

child to use alternate providers if the child 

lives outside its service area but in an area 

covered by one of these agreements. 

However, in the absence of such 

agreements, serious problems arise. 

Children have theoretical coverage, but that 

coverage is useless because it is 

geographically inaccessible. Moreover, 

children may be in an even worse position 

than uninsured children—the “uninsured” 

children may be eligible for SCHIP, while 

these theoretically “insured” children are 

not. 

A standard for determining geographic 

accessibility should be established so that 

access to a provider is not an unreasonable 

distance. The decision maker should 

determine if the primary care is available 

within 30 minutes or 30 miles of the child’s 

residence. In lieu of a 30 minute/30 mile 

standard, an alternative standard may be 

adopted, such as those used by States that 

contract with a Medicaid managed care plan 

or that regulate managed care provider 

networks. 

HCFA has issued guidance for organizations 

that contract with Medicare and Medicaid.20 

As a general rule, the primary care services 

and commonly used specialty and referral 

services are to be available within 30 

minutes driving time from any point in the 

service area. Longer travel times may be 

permissible when residents in part or all of 

the service area customarily travel greater 

distances to obtain that service (e.g., in rural 

areas, or when there is only one provider of 

a given type in a broad region). Other 

factors to be considered are the means of 

transportation. In areas where low-income 

residents rely heavily on public 

transportation, the organization is to ensure 

that providers are accessible through these 

means. 

Child support-eligible children face unique 

barriers in terms of access to health care 

coverage. One such barrier, as highlighted 

in Chapter 2 of this report, is that much of 

the health care coverage available to parents 

through their employers is provided through 

managed care organizations that limit the 

choice of service providers by geographic 

location or by a limited network of 

providers. If a noncustodial parent provides 

medical support through a restricted 

insurance plan, such as an HMO, available 

# See 

“Prior 

Assumptions and 

Inadequate 

Solutions” in 

CHAPTER 2, 

page 2-9. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-9 

services may be inadequate when the 

covered child does not reside within or near 

the applicable service area (usually only 

emergency care is covered outside of the 

service area). The Working Group found 

that coordination agreements between plans 

that permit covered children to receive 

benefits outside the insurer’s ordinary 

service area are a useful tool in expanding 

the health care coverage options that a 

decision maker may consider when 

establishing the medical support provisions 

of a child support order. Therefore, the 

Working Group recommends that the 

National Association of Insurance 

Commissioners (NAIC) encourage 

insurance providers to enter into 

coordination agreements. #See

Recommendation 7.

In addition to taking geographic 

accessibility factors into account, a 

determination of accessibility must also take 

into account the stability of coverage. Many 

parents have access to dependent health care 

coverage at the time an order is entered but 

lose coverage shortly thereafter. Similarly, 

parents with seasonal employment (such as 

summer camp staff), those whose hours of 

employment vary at different times of the 

year (such as construction workers and 

fishermen), and those who frequently 

change jobs can afford to help pay for 

family health coverage at some times of the 

year but not at others. The decision maker 

may thus order available coverage only to 

find that it is no longer available or 

affordable by the time the paperwork is 

completed. This is an exercise in futility 

and should be avoided when possible. 

When determining accessible coverage, 

then, the decision maker should consider the 

likelihood that coverage will be stable for at 

least one year. In short, decision makers 

should not order private coverage when it 

will not be available for an extended period 

of time, or when it is geographically 

inaccessible to the child.21 #See

Recommendation 8.

#Recommendation 7 (Best Practice) 

DOL and HHS should request the NAIC to encourage insurance providers 

with limited coverage areas to enter coordination agreements under which 

children who are covered under a geographically inaccessible plan can 

obtain services from a plan that is geographically accessible to them. Child 

support enforcement should publicize the availability of such plans and 

encourage States to take into account the possibility that out-of-area 

coverage may be available when assessing whether a particular plan is 

accessible to the child. 
CHAPTER 3

Page 3-10 Medical Child Support Working Group Report 

Decision makers must also address whether 

coverage is affordable. The definition of 

affordability must be considered in terms of 

reasonable cost. IV-D agencies are required 

to pursue private family health coverage 

whenever it is available at reasonable cost. 

#Recommendation 8 (Federal Regulation) 

If a child is not enrolled in private coverage, the decision maker shall 

determine whether one or both parents are able to obtain appropriate 

coverage for the child based on three factors: (1) comprehensiveness of the 

plan, (2) access to services, and (3) affordability. Each factor should be 

assessed individually and then considered together in accord with 

Recommendation 13. 

If a child has special needs, the decision maker should consider this 

circumstance in conjunction with the needs of the primary plan member and 

other dependents (see Recommendation 12).

Coverage is comprehensive if it includes at least medical and hospital 

coverage; provides for preventive, emergency, acute, and chronic care; and 

imposes reasonable deductibles and co-payments. In determining which 

coverage is more comprehensive when both parents have such coverage, the 

decision maker should consider the following: basic dental coverage, 

orthodontics, eyeglasses, mental health services, and substance abuse 

treatment. 

Coverage is accessible if the covered children can obtain services from a 

plan provider with reasonable effort by the custodial parent. When the only 

health care option available through the noncustodial parent is a plan that 

limits service coverage to providers within a defined geographic area, the 

decision maker should determine whether the child lives within the plan’s 

service area. If the child does not live within the plan’s service area, the 

decision maker should determine whether the plan has a reciprocal 

agreement that permits the child to receive coverage at no greater cost than 

if the child resided in the plan’s service area. The decision maker should 

also determine if primary care is available within the lesser of 30 minutes or 

30 miles of the child’s residence. If primary care services are not available 

within these constraints, the coverage should be deemed inaccessible. In 

lieu of the 30 miles/30 minutes standard, States may adopt an alternative 

standard for time and distance, such as the standard that the State uses to 

administer programs such as Medicaid managed care services or to regulate 

managed care provider networks. 

In determining accessibility, the decision maker should also assess whether 

one can reasonably expect the coverage to remain effective for at least one 

year, based on the employment history of the parent who is to provide the 

coverage. 

Reasonable cost should be assessed based on Recommendation 9 through 

Recommendation 11. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-11 

!GAO

General

Accounting Office

Federal regulations state that “health 

insurance is considered reasonable in cost if 

it is employment-related or other group 

health insurance.”22 The definition deeming 

employment-related coverage to be per se

reasonable in cost was first promulgated in 

1985. It was justified by a 1983 study by 

the National Center for Health Services 

Research, which found that employers paid 

72 percent of the premium cost for lowwage employees. OCSE thus concluded that 

“most employment-related or other group 

health insurance is inexpensive to the 

employee/absent parent.”23

States have questioned the validity of this 

premise, however, since at least 1988.24 

And now, years later, there is even more 

reason to question the factual premise upon 

which this definition was based. The 

number of employers who offer completely 

subsidized dependent’s coverage to their 

employees has significantly decreased. 

The GAO estimates that in 1980, 51 percent 

of employers who offered family coverage 

fully subsidized the cost, but by 1993, only 

21 percent of employers fully subsidized the 

cost.25 Recent research shows that lowwage workers, who are the primary 

constituency of the IV-D program, are 

concentrated in certain “low-wage” firms 

where employee contributions to the cost of 

the premium are higher than in other firms.26 

Furthermore, the required employee 

contribution for health care coverage 

represents a much larger share of family 

income for low-income workers.27

The size of the typical premium is not 

small.28 The average percentage of the 

premium paid by the employee for family 

coverage ranges from 32 to 36 percent based 

on the plan type.29 Employees at larger 

companies pay a considerably lesser 

percentage of their family health coverage 

premium costs than employees in smaller 

companies.30

The estimates shown in the “Annual 

Premiums & Employee Contributions for 

Active Employees for Family Coverage, 

1996” table suggest that on average, 

employee contributions to family health care 

coverage premiums are equal to 45 to 52 

percent of the typical cash child support 

Annual Premiums & Employee 

Contributions for Active Employees for 

Family Coverage, 1996* 

Type of Plan Average 

Premium 

Average 

Employee 

Contribution 

PPO (Preferred 

Provider 

Organization) 

$5,377 $1,936 

POS (Point-ofService Plan) $5,477 $1,862 

HMO (Health 

Maintenance 

Organization) 

$5,071 $1,673 

Indemnity Plan/ 

Conventional 

Coverage 

$5,388 $1,724 

*Source: Employee Benefits Research 

Institute, EBRI Databook on Employee 

Benefits (1997). 
CHAPTER 3

Page 3-12 Medical Child Support Working Group Report 

payment.31 Since the cost of health 

insurance coverage can be such a large part 

of the child support order, requiring such 

coverage has implications for the amount of 

cash payments the child receives and the 

size of the noncustodial parent’s obligation, 

depending on how a State takes the cost of 

health care coverage into account. A State 

may reduce the cash obligation by the 

amount of health insurance cost, adjust the 

calculation of the noncustodial parent’s 

income based on health insurance costs, or 

simply add a health insurance requirement 

with no adjustment to cash award. 

Clearly, employee contributions to insurance 

premiums impose a significant financial 

burden on the parent who is providing the 

dependent coverage. States have long 

recognized this in their State child support 

guidelines. Every State provides a 

mechanism to adjust the amount of the child 

support obligation when a parent provides 

health care coverage for his children.32 If 

the custodial parent provides the coverage, 

the cash support award will probably 

increase, to reflect some contribution from 

the noncustodial parent toward the cost. If 

the noncustodial parent provides the 

coverage, the cash support award will 

probably decrease, to reflect the fact that 

that parent is subsidizing the cost of 

coverage through a separate deduction from 

wages toward the premium. 

For more than a decade, States have worried 

about the effect of these adjustments in cash 

support, especially when the noncustodial 

parent is ordered to provide health care 

coverage.33 If the premium associated with 

the coverage is too high, cash support will 

be substantially reduced, leaving the 

custodial parent without enough money to 

supply the child’s basic needs. If cash 

support is not adjusted downward, however, 

poorer noncustodial parents will pay an 

unreasonably high portion of their income as 

support. If these parents cannot meet their 

own basic needs, they have little incentive to 

work and support their children, which may 

actually reduce the amount of child support 

they pay.34

Some States have addressed this problem by 

developing policies that look at the actual 

cost of providing insurance relative to the 

obligated parent’s income. If cost exceeds a 

certain percentage of that parent’s income, 

coverage is not ordered. For example, 

Washington State does not require the 

decision maker to order the noncustodial 

parent to pay coverage if the premiums are 

more than 25 percent of the noncustodial 

parent’s basic child support obligation.35 In 

other States, the decision maker exercises 

discretion when the cost is too high, even if 

the coverage is employment-related. For 

example, Colorado does not require the 

decision maker to order coverage if the 
CHAPTER 3

Medical Child Support Working Group Report Page 3-13 

premium exceeds 20 percent of the 

noncustodial parent’s gross income.36

Other States compare the cost of family 

health coverage to the amount of the cash 

support award. For example, Maine does 

not require the decision maker to order 

coverage if the cost exceeds 15 percent of 

the parent’s cash support obligation37 and 

Montana has a similar rule if the cost 

exceeds 25 percent of the cash support 

obligation.38 The Working Group also noted 

that the SCHIP program directs that 

contribution by the parent toward the cost of 

this health care coverage should not exceed 

five percent of a family’s gross income. 

The Working Group looked at these State 

policies in developing a new definition of 

reasonable cost. The Working Group began 

with the Maine/Montana approach, which 

calculates reasonable cost relative to the 

cash support award. The Working Group 

rejected this as a national guideline, 

however, because a significant number of 

States (12) use a child support guideline that 

calculates a cash support obligation only for 

the noncustodial parent. These States have 

no ability to calculate a support obligation 

for the custodial parent. If the custodial 

parent were to be the one ordered to provide 

coverage, there would be no way to adjust 

that parent’s obligation in those States. 

The Working Group also considered the 

amount of cash support owed under various 

State guidelines and concluded that using 

the Percentage of Support Obligation model 

would exacerbate existing inequities. There 

is enormous variation in different States’ 

treatment of similarly-situated families. For 

a low-income family with a combined 

income of $14,400 per year, for example, 

the noncustodial parent’s typical child 

support payment ranges from nothing in 

Connecticut to $327 in Indiana.39 If the 

Federal government adopted a 25 percent of 

cash support standard, the Connecticut 

father would have no obligation, while the 

Indiana father would owe an additional $82, 

for a total obligation of $409. It is clear that 

this approach would compound existing 

inequities. 

For this reason, the Working Group 

concluded that affordability should be 

determined with reference to the gross 

income of the parent providing the coverage. 

Even in States that use the Percentage of 

Income model, the gross income of both 

parents can be determined. Moreover, this 

approach does not exacerbate the 

inequalities that would be created if 

affordability were determined based on the 

Percentage of Support Obligation model. 

The Working Group also debated the 

relative merits of the higher standard used 

by Washington and a percentage similar to 
CHAPTER 3

Page 3-14 Medical Child Support Working Group Report 

that embodied in the SCHIP formula. The 

Working Group was concerned about the 

effects of reducing the amount of cash 

support when the noncustodial parent 

provides coverage, given the importance of 

maintaining sufficient cash support, 

especially at lower income ranges where 

large numbers of families are affected by 

welfare reform. Time limits and work 

requirements combine to move many 

families from public assistance to low-wage 

jobs and encourage others to avoid using the 

public assistance system. These families 

need cash support to meet their children’s 

other essential needs. 

In addition, the Working Group was 

concerned that a combination of cash 

support and a health care premium equal to 

25 percent of the child support obligation 

could be high enough to send the obligation 

over Federal wage withholding limits. 

When this happens, employers are left trying 

to figure out what to do, IV-D agencies have 

to go back and modify orders, and children 

lose coverage. The Working Group selected 

a nonvariable percentage of income that 

applied throughout the country and, in most 

cases, that would keep the largest number of 

orders within withholding limits.40

Consequently, the Working Group 

concluded that the best approach was to use 

the five percent of gross income standard, 

which is based on the standard used in the 

SCHIP program. The Working Group was 

persuaded that the SCHIP standard struck a 

reasonable balance between cash and 

premium costs, was consistent with existing 

public policy, would minimize the number 

of cases where cash and medical support 

obligations exceed withholding limits, and 

would enable consistency in 

recommendations for cases where public, 

rather than private, coverage is used. For 

these reasons, the Working Group 

recommends that 45 CFR §303.31(a)(1) be 

amended to reflect this standard. #See

Recommendation 9.

The five percent standard will be appropriate 

in most cases. At the lowest income levels, 

however, the additional cost of health care 

coverage may make the financial burden on 

#Recommendation 9 (Federal Regulation) 

The Federal regulation that deems all employment-related or group-based 

coverage to be reasonable in cost should be replaced with a standard based 

on the cost of coverage relative to the income of the parent who provides the 

coverage. Except as noted in Recommendation 10 and Recommendation 11, 

if the cost of providing private coverage does not exceed five percent of the 

gross income of the parent who provides coverage, then the cost should be 

deemed reasonable. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-15 

the noncustodial parent too high. If that 

burden is adjusted downward, cash support 

may not significantly contribute toward the 

cost of providing basic necessities for the 

children. For this reason, States should not 

order noncustodial parents with incomes 

below 133 percent of the poverty level to 

provide private health care coverage to their 

dependents unless such coverage is available 

at no cost. #See Recommendation 10.

The Working Group also recommends that 

OCSE identify this as a best practice and 

disseminate information regarding the 

rationale for it to the States. The preamble 

to the Federal regulations defining 

reasonable cost should also include this 

information, so that it will be clear to States 

that they have the flexibility to adopt this 

approach. 

Similarly, if a custodial parent’s income is 

so low that her resident child qualifies for or 

is receiving Medicaid, that parent should not 

be required to provide private coverage 

unless such coverage is available at no cost. 

The Working Group also recommends that 

OCSE identify this as a best practice and 

disseminate supporting information to 

States. The preamble to the Federal 

regulations should also state that deviation is 

allowable in extremely low-income cases. 

#See Recommendation 11.

In sum, the Working Group recommends 

that there should be some minimum national 

standard for determining the appropriateness 

of coverage based on comprehensibility, 

accessibility, and affordability. HHS should 

include definitions/standards for these terms 

in a revised 45 CFR §303.31. Standard 

definitions will promote greater equity 

between similarly-situated families in both 

intra-state and interstate cases. The current 

lack of uniformity leads to situations where 

inappropriate coverage is ordered for one 

child but not for another, where some 

parents are paying for useless coverage 

while others are not, where some children 

#Recommendation 10 (Best Practice) 

No parent whose net income is at or below 133 percent of the Federal poverty 

level should be ordered to provide private coverage, unless that parent has 

access to private coverage that does not require an employee contribution to 

obtain coverage. 

#Recommendation 11 (Best Practice) 

No parent whose resident child is covered by Medicaid, based on that 

parent’s income, should be ordered to provide private coverage, unless the 

parent has access to private coverage that does not require an employee 

contribution to obtain coverage. 
CHAPTER 3

Page 3-16 Medical Child Support Working Group Report 

receive less cash support because their 

parent is paying for inaccessible coverage 

but other children do not lose cash support 

for this reason, and/or where some children 

are denied SCHIP coverage because 

inaccessible coverage is theoretically 

available to them while other children enter 

the SCHIP program because the decision 

maker has recognized the futility of ordering 

inaccessible coverage. Overall, establishing 

standard definitions for affordable, 

comprehensive, and accessible coverage will 

maximize the number of children who are 

enrolled in stable, comprehensive, 

accessible, and affordable family health 

coverage. 

Children with Special Needs 

In determining the appropriate type of health 

care coverage for children with special 

health needs (CSHNs), it is of paramount 

importance to consider the medical, mental, 

and social service needs of these children 

and their guardians. CSHNs are at great risk 

of chronic illnesses and disabilities. 

Therefore, attention must be given to their 

routine preventive and acute care. Many of 

the services necessary to address these 

conditions may not be covered in certain 

health care plans, and it is essential that 

CSHNs have continuity of care.41 In 

determining appropriate health care 

coverage for CSHNs, it is important for the 

decision maker to consider which plans are 

adequate to meet those needs. A common 

definition of CSHNs would help facilitate 

the decision maker’s determination of the 

appropriate plan enrollment and system(s) of 

care, whether private, Medicaid, or SCHIP 

coverage. For some families, for example, 

health care coverage would outweigh cash 

support as the primary need. Flexibility 

must be available to the decision maker to 

accommodate such individual situations. 

#See Recommendation 12.

#Recommendation 12 (Federal Guidance) 

The decision maker must consider a child’s special medical needs when 

deciding which form of private or public coverage is appropriate under 

Recommendation 8 through Recommendation 11. HHS should identify 

governmental agencies that are currently studying issues involving children 

with special needs and should coordinate with these agencies in the 

development of a common definition of “special needs” children. HHS 

should provide guidance to State IV-D agencies on how best to use the 

decisionmaking matrix set out in Recommendation 13 when a special needs 

child is involved. 

HCFA should require Medicaid agencies to identify whether there is a special 

needs child in any case they refer to the IV-D program pursuant to the child 

support cooperation requirement of the Medicaid program. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-17 

The Decision “Matrix” 

Once the decision maker has obtained all of 

the pertinent information concerning the 

child’s needs, health care plans available to 

both parents, and the parents’ ability to pay, 

they must determine which of the parents is 

best able to provide comprehensive, stable, 

affordable, and accessible coverage that 

serves the best interests of the child. The 

table on the following page, “Decision 

Matrix for Tribunal Use,” illustrates the 

decision logic for the tribunal to use in 

determining whether to order private or 

public group health care coverage. 

Steps 1-3 reflect the basic principle 

articulated in Recommendation 3—that is, 

that the decision maker should first 

determine if either parent has accessible, 

affordable, comprehensive coverage. When 

it is clear that only one of the parents has 

access to comprehensive coverage, this 

coverage should be ordered. 

Step 4 tells the decision maker what to do if 

only one parent has accessible, affordable, 

comprehensive coverage. If only the 

custodial parent has such coverage, then that 

coverage should be ordered. Likewise, if 

only the noncustodial parent has such 

coverage, then that coverage should be 

ordered. What the Working Group’s 

decision matrix makes clear is that even if 

the custodial parent is the one with access to 

such coverage, that parent should be ordered 

to provide it. 

Step 5 tells the decision maker what to do 

when both parents have access to 

comprehensive, accessible, and affordable 

coverage. In these situations, the Working 

Group recommends that the custodial 

parent’s coverage should be ordered. We 

recommend this for a number of reasons. 

♦ First, children will benefit. The 

custodial parent’s coverage is more 

likely to be easily accessible to the 

child. As discussed earlier, if coverage 

is not accessible, it is not used. 

♦ Second, using the custodial parent’s 

coverage will most likely decrease the 

IV-D agencies’ enforcement burden. 

Custodial parents have a strong 

incentive to enroll the child in available 

insurance: if they do not do so, they will 

be responsible for all of the bills. 

Accordingly, the custodial parent is 

likely to act more quickly and require 

less prodding by the IV-D agency. The 

custodial parent will know when a job 

change is imminent and when the 

children need to be moved to the new 

policy or, if the new job does not 

provide dependent benefits, when the 

medical support order needs to be 

modified. This will reduce the amount 

of time that elapses before the IV-D 

agency learns that the order needs 

modification. 
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Page 3-18 Medical Child Support Working Group Report 

DECISION MATRIX FOR TRIBUNAL USE 

(To Determine Appropriate Coverage for 

 a Child Not Currently Enrolled in Any Coverage)

Step Situation Action 

1 Is private coverage available?

custodial parent: YES noncustodial parent: YES Go to Step 2 

custodial parent: NO noncustodial parent: YES Go to Step 2 

custodial parent: YES noncustodial parent: NO Go to Step 2 

custodial parent: NO noncustodial parent: NO Custodial parent enrolls 

in Medicaid/SCHIP, or 

other available coverage 

2 Does the child have access to coverage? 

custodial parent: YES noncustodial parent: YES Go to Step 3 

custodial parent: NO noncustodial parent: YES Go to Step 3 

custodial parent: YES noncustodial parent: NO Go to Step 3 

custodial parent: NO noncustodial parent: NO Custodial parent enrolls 

in Medicaid/SCHIP, or 

other available coverage 

3 Is cost reasonable? 

custodial parent: YES noncustodial parent: YES Go to Step 4 

custodial parent: NO noncustodial parent: YES Noncustodial parent 

custodial parent: YES noncustodial parent: NO Custodial parent enrolls 

custodial parent: NO noncustodial parent: NO Custodial parent enrolls 

in Medicaid/SCHIP, or 

other available coverage 

4 Does one parent have better coverage? 

YES: custodial parent’s coverage is better Custodial parent enrolls 

YES: noncustodial parent’s coverage is better Noncustodial parent 

enrolls 

NO: coverage is of equal quality Custodial parent enrolls, 

unless a special 

determination is 

requested 
CHAPTER 3

Medical Child Support Working Group Report Page 3-19 

!COBRA 

Consolidated 

Omnibus Budget 

Reconciliation Act of 

1985 

!HIPAA 

Health Insurance 

Portability and 

Accountability Act of 

1996 

♦ Third, using the custodial parent’s own 

coverage is procedurally easier for 

parents, employers, insurers, and plan 

administrators. Employers and plan 

administrators routinely distribute 

information about coverage, provide 

claim forms to their employees, and 

acknowledge the employee’s signature 

on claims. It is far more difficult for 

employers, insurers, and plan 

administrators to deal with the custodial 

parent when the noncustodial parent 

provides coverage. Thus, 

communication regarding the child’s 

health insurance is eased considerably 

when the custodial parent is the policy 

holder. Moreover, the COBRA and 

HIPAA rules are very clear for 

dependents covered by the custodial 

parent, but less clear for dependents 

covered by the noncustodial parent.42

While there are many reasons for using the 

custodial parent’s coverage when both 

parents have access to comprehensive, 

accessible, and affordable coverage, the 

Working Group recognizes that either parent 

may prefer the noncustodial parent’s 

coverage in some instances. For example, if 

a child needs mental health services and the 

noncustodial parent’s policy provides for 

such services while the custodial parent’s 

policy does not, the former is obviously 

preferable. Or if the noncustodial parent is 

already providing dependent benefits to 

others in his household, and can add the 

child in question at little or no cost, it makes 

sense to use the noncustodial parent’s 

policy. 

The decision maker should have authority to 

assess what is in the child’s best interest and 

order coverage accordingly. Consistent with 

Recommendation 1, this recommendation 

requires the decision maker to consider all 

sources of private coverage that may be 

available. This policy is also consistent with 

the direction States are now taking in this 

area. Of the 27 States whose child support 

guidelines require the decision maker to 

examine coverage available to both parents, 

six States require the decision maker to 

order the best and most affordable 

coverage.43 One State, Arizona, actually 

provides a similar preference for custodial 

parent coverage44 and Massachusetts 

expresses a preference for custodial parent 

coverage if it is already in place.45

Moreover, several IV-D program 

administrators expressed a desire to move in 

this direction but felt they did not have the 

authority to do so. This change should be 

embodied in a new Federal statute, so that 

IV-D agencies have clear authority to assess 

coverage available to both parents and order 

custodial parent coverage in appropriate 

situations. #See Recommendation 13. 
CHAPTER 3

Page 3-20 Medical Child Support Working Group Report 

#Recommendation 13 (Federal Legislation) 

After determining that a child is not enrolled in private health care coverage, 

and that at least one parent could enroll the child in private coverage, the 

decision maker should determine which plan is most appropriate for the child 

(as defined in Recommendation 8) by evaluating the plan(s) in the following 

manner: 

Step 1. Determine whether the child has access to the services provided 

under the coverage. 

Step 2. Determine whether the cost of the coverage is reasonable. 

Step 3. Determine whether the coverage is comprehensive. 

Step 4. If, after following steps 1-3, the decision maker finds that only the 

custodial parent has accessible, affordable, and comprehensive coverage, 

that coverage should be ordered, with appropriate allocation of cost, as 

determined by the State child support guidelines. (See Recommendation 2) 

If, after following steps 1-3, the decision maker finds that only the 

noncustodial parent has accessible, affordable, and comprehensive 

coverage, that coverage should be ordered, with appropriate allocation of 

cost, as determined by the State child support guidelines. (See 

Recommendation 2) 

Step 5. If, after following steps 1-3, it is determined that accessible, 

affordable, comprehensive coverage is available to both parents, then 

coverage available to the custodial parent should be ordered unless (1) either 

parent expresses a preference for coverage available through the 

noncustodial parent; or (2) the noncustodial parent is already carrying 

dependent’s coverage for other children, either under a child support order 

for those children or because the children reside in his current household, 

and the cost of contributing toward the premiums associated with the 

custodial parent’s coverage is significant. If either of the exceptions applies, 

the decision maker should make an assessment of what is in the best 

interests of the child and order coverage accordingly. 

If neither parent has family health coverage, see Recommendation 14 and 

Recommendation 15.
CHAPTER 3

Medical Child Support Working Group Report Page 3-21 

Step-parents are another possible source of 

coverage. Census Bureau data indicates that 

approximately 17 percent of child supporteligible children live in step families.46 

Remarried custodial parents who do not 

have access to dependents health care 

coverage through their own employment 

may have access to such coverage through 

their new spouses. Decision makers should 

also be directed to explore coverage 

available through step-parents when it is 

appropriate to do so. Although it is not ideal 

to order a parent to secure health care 

coverage through a step-parent’s plan, such 

plans should be taken into account when a 

medical support order is established or 

modified, when such coverage is available. 

Step-parents traditionally have had no 

enforceable legal obligations to their stepchildren.47 In States that continue this 

tradition, the step-parent’s provision of 

health care coverage has always been purely 

voluntary because the IV-D agency or 

private attorney handling the case could not 

enforce the obligation. However, 

approximately 20 States have now created a 

statutory duty for step-parents to support 

their step-children, at least while they are 

married to the children’s biological or 

adoptive parent.48 In these States, stepparents may be compelled to provide private 

health care coverage to their step-children. 

If the new marriage does not last, however, 

the children will lose access to coverage. In 

such instances, the custodial parent will 

need to quickly seek a new order or learn 

about and exercise any COBRA rights that 

may exist. 

In addition, not all employer-sponsored 

plans extend benefits to step-children. 

Employers who do not currently provide 

such coverage should not be forced to do so. 

Nevertheless, since some large employers, 

including the Federal government, do 

provide health care coverage to their 

employees’ step-children, this option may be 

available and desirable. Every State should 

have some policy in this area. The policy 

should reflect the realities of the situation 

and consider step-parent coverage only 

when the parties themselves believe it is 

appropriate and employers ordinarily make 

“If you've gone through this process and 

you determine that both parents have 

accessible, affordable comprehensive 

coverage, then our preference at this 

point is to have the custodial parent 

provide the coverage for all the reasons 

that we've talked about in the past, in 

terms of that's the parent who most 

easily can enroll the child, who's got the 

forms, whose signature will be honored, 

who really takes away all the difficult 

enforcement issues from a IV-D 

perspective of having the noncustodial 

parent provide the coverage.” 

~Paula Roberts, Senior Attorney, 

Center for Law and Social Policy 
CHAPTER 3

Page 3-22 Medical Child Support Working Group Report 

such coverage available. Even then, the 

custodial parent should be warned to seek 

COBRA coverage or modification of the 

order if the marriage terminates. #See

Recommendation 14.

Establishment of Orders for 

Publicly-Funded or Other 

Alternative Health Care Coverage 

In many cases, private health care coverage 

is simply not available to either parent.49 In 

such cases, public or other alternative 

coverage must be considered, as the 

children—especially those in the IVD 

caseload—may be eligible for Medicaid or 

SCHIP benefits. In addition, some IVD 

agencies have worked with insurers to 

establish alternative lower-cost child-only 

plans that parents can purchase to provide 

coverage for their children.50 These plans 

can be especially useful for children who do 

not qualify for Medicaid or SCHIP. 

In other cases, private coverage is available 

but the cost is prohibitive. Medicaid, 

SCHIP, and alternative programs can also be 

helpful in these instances. 

A few States have already taken the lead in 

granting decision makers the power to 

consider both public and private coverage 

when drafting or modifying support orders. 

For example, Connecticut’s child support 

guidelines require the decision maker to 

order the custodial parent to apply for 

HUSKY B (the State’s non-Medicaid 

SCHIP program) or an available equivalent 

#Recommendation 14 (Best Practice) 

When neither parent has access to private health care coverage at 

reasonable cost but a step-parent does, enrolling the children in the stepparent’s coverage should be considered under certain conditions. These 

conditions are: (a) the coverage is accessible to the children; (b) the stepparent is willing to provide such coverage; and (c) there are no 

employer/insurer constraints for enrollment of the child. 

When these conditions are met, the parent who is married to the step-parent 

should be ordered to provide health care coverage for the children. The 

order should specify that this obligation may be met by enrolling the children 

in the step-parent’s health care coverage. Moreover, the order must make it 

clear that if the obligated parent and the step-parent later commence 

proceedings for a separation or divorce, the obligated parent has 

responsibility for obtaining information about the cost and availability of 

COBRA coverage for the children and enrolling the children in this coverage. 

The order should also specify that if COBRA (or other) coverage is not 

available or affordable, the obligated parent must immediately seek 

modification of the medical provisions of the child support order. As an 

alternative, the custodial parent should seek publicly-funded coverage in 

order to minimize any lapse in coverage for the children. 

# See 

the California 

IV-D Kids 

discussion in 

CHAPTER 8, 

page 8-7. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-23 

government-sponsored plan when private 

coverage is not available to either parent at 

reasonable cost.51 Similarly, Texas requires 

the decision maker to order custodial parents 

to enroll in a program offered by the Texas 

Healthy Kids Corporation if private 

coverage is not available or affordable.52

All States should be encouraged to consider 

public or other alternative coverage when 

drafting or modifying support orders for 

children whose parents cannot provide 

private coverage. This approach could 

substantially increase the number of children 

with access to basic health care coverage. 

Public Payment for Private Coverage 

Children can also obtain private coverage 

with a public subsidy. State Medicaid 

agencies can use program funds to purchase 

group health coverage53 if such coverage is 

available to a Medicaid-eligible individual. 

Alabama, for example, has been purchasing 

group health coverage for Medicaid 

beneficiaries since 1991. This is especially 

valuable to children living in areas with a 

limited number of Medicaid providers. 

Medicaid agencies also are permitted to pay 

for cost-effective group health premiums for 

certain individuals entitled to elect COBRA 

continuation coverage.54

SCHIP programs can also use program 

funds to subsidize coverage under employersponsored group health plans. If the 

coverage would also include individuals not 

eligible for SCHIP, the State would need to 

obtain a “family coverage waiver” from the 

Health Care Financing Administration 

(HCFA) in order to purchase the coverage.55 

Massachusetts and Wisconsin have elected 

to purchase family coverage through their 

SCHIP programs.56

Essentially, employers and plan 

administrators are concerned that this ability 

on States’ parts to subsidize private 

insurance may result in “adverse 

selection”—that is, the selection of children 

with serious, and costly, medical problems 

as those for whom it is deemed more costeffective to pay the employee contribution 

for private coverage rather than enroll them 

in Medicaid or SCHIP. 

For many self-insured plans, employee 

contributions represent only a small 

percentage of the plan’s expenses, including 

benefit claims. In these plans, the employer 

is responsible for the majority of the plan’s 

expenses. In addition, the group premium 

“But there are lots of cases on the 

margin where there is very limited 

noncustodial parent income, where the 

source of private insurance is less 

clear. At that point ... enroll[ing] the 

child in CHIP or Medicaid ... 

maximizes benefits to everyone.” 

~Nancy Ebb, Senior Attorney, 

Children’s Defense Fund 
CHAPTER 3

Page 3-24 Medical Child Support Working Group Report 

for insured plans is generally based on the 

nature of the risk pool of insureds, and 

again, the employer may be paying most of 

the premium. If there is a significant shift of 

high-risk/high-cost Medicaid and SCHIPeligible children from those programs to 

group health plans (in other words, adverse 

selection), the cost to employers of 

maintaining these plans, whether selfinsured or insured, may rise substantially. 

Thus selection criteria must be neutral and 

uniformly applied. An additional concern is 

that many (if not most) group health plans 

that require employee contributions are only 

equipped to receive such contributions 

through payroll withholding by and 

transmittal from the employer. Preliminary 

inquiries indicate that such plans are not 

administratively equipped to receive 

contributions from other sources, whether it 

be the employee or the Medicaid or SCHIP 

agency. Further analysis is needed to 

determine if the cost of modifying systems 

to permit such receipt would be substantial. 

The pros and cons need to be weighed in 

developing future policy. #See 

Recommendation 15.

Role of the IV-D Agency 

The five steps outlined earlier in 

Recommendation 13 for determining which 

plan is most appropriate for a child will not 

effectively ensure that children are enrolled 

in the best available coverage unless: (1) 

parents are aware of what public and private 

family health coverage programs are 

available, and (2) the child support agency 

helps them enroll their children. 

Child support programs must conduct 

outreach activities to educate parents about 

government-sponsored family health 

coverage options. When SCHIP was 

enacted, OCSE’s Deputy Director sent a 

letter to all State directors urging them to 

become involved in SCHIP implementation 

and outreach activities,57 however only a 

few State child support programs have done 

so. This is partly because it was not clear 

whether such outreach activities were a 

IV-D function and therefore eligible for 

Federal Financial Participation (FFP). This 

funding issue needs to be addressed by 

including Medicaid/SCHIP outreach 

activities in Title IV-D. Unless this change 

#Recommendation 15 (Best Practice) 

When neither parent can provide comprehensive, accessible, affordable 

private health care coverage, the decision maker should explore the 

possibility of providing coverage to the child through Medicaid or the SCHIP. 

If the child is ineligible for Medicaid or SCHIP, the decision maker should 

explore whether there is any available lower-cost, child-only plan, such as 

Sacramento IV-D Kids. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-25 

in the program responsibility and funding 

can be resolved administratively, or by 

regulation, Congress should enact legislation 

that mandates this outreach role for State 

child support enforcement agencies. #See

Recommendation 16.

Enrollment Authority 

Encouraging and enabling outreach 

activities, however, is just a first step for the 

IV-D agency. While the SCHIP statute does 

not expressly prohibit IVD agencies from 

enrolling eligible children in the program, 

IVD agencies are not permitted to enroll 

children in Medicaid. This must be 

changed. IVD agencies should be 

authorized to enroll children in Medicaid. 

Section 1920A(b)(3)(A)(i)(I) of the Social 

Security Act, as added by §4912(a) of the 

Balanced Budget Act of 1997 (Pub. L. 105-

33) added a new §1920A to the Medicaid 

statute.58 The new law allows a “qualified 

entity” to determine a child’s eligibility for 

Medicaid for a “presumptive eligibility 

period” on the basis of preliminary 

information that the family income of the 

child does not exceed the State’s Medicaid 

income eligibility level. The presumptive 

eligibility period is the month in which the 

presumptive eligibility determination is 

made plus the next month, a period of 

approximately 28 to 62 days; it terminates 

when the Medicaid agency determines 

“regular” eligibility. “Qualified entities” 

currently include Medicaid providers as well 

as agencies that determine eligibility for the 

Head Start, Child Care, Development Block 

Grant, and Women Infants and Children 

(WIC) programs. 

The Working Group is therefore 

recommending that IVD agencies be added 

to the list of agencies authorized to 

determine presumptive eligibility and the 

Medicaid statute be amended accordingly. 

This would expedite enrollment of eligible 

children in the Medicaid program when 

private coverage is not an option.59 The 

IV-D agency could use the income 

information obtained to calculate cash 

support under the guidelines to make a 

preliminary determination regarding a 

child’s eligibility for Medicaid. The child 

could then be enrolled as presumptively 

eligible and coverage would begin 

#Recommendation 16 (Federal Legislation) 

To facilitate enrollment of eligible children in public coverage, Federal law 

should require State IV-D agencies to: (1) provide parents with information 

about the Medicaid and SCHIP programs, as well as any other subsidized 

coverage that may be available to the child; and (2) refer the family to the 

appropriate program for possible enrollment. 
CHAPTER 3

Page 3-26 Medical Child Support Working Group Report 

immediately. #See Recommendation 17.

While States should not be required to use 

their IV-D programs to make presumptive 

Medicaid eligibility determinations, they 

should be strongly encouraged to do so. If 

they choose not to, States should adopt other 

methods for facilitating the enrollment of 

eligible children in the Medicaid and SCHIP 

programs. #See Recommendation 18.

Contribution by the Noncustodial 

Parent 

When they are financially able to do so, both 

parents should contribute to the cost of their 

children’s health care coverage. While the 

definition of reasonable cost proposed 

earlier precludes parents with access to 

employer-based coverage from being 

ordered to provide coverage if the cost is not 

reasonable, this does not preclude the parent 

from contributing something toward the cost 

of the child’s coverage. In other words, 

while it may be unreasonable to expect the 

parent to pay the full premium for available 

private coverage in some cases, it is not 

unreasonable to expect the parent to 

contribute something towards public 

coverage. 

If private coverage is not ordered, children 

are likely to enter the Medicaid or SCHIP 

program at substantial public cost. While 

Medicaid is an open-ended program, the 

SCHIP program has a specific appropriation. 

If all of the SCHIP funds are used up, 

otherwise eligible children have to be turned 

away. While this has not yet happened, the 

potential exists, particularly if current 

SCHIP outreach efforts are successful. 

Parents of SCHIP-eligible children who 

could help contribute toward the SCHIP 

costs should be asked to do so in order to 

preserve funds for other eligible children in 

the future. In addition, when children do 

enter Medicaid or SCHIP, the custodial 

parent may have to pay premiums, co-

#Recommendation 17 (Federal Legislation) 

Congress should amend §1920A of the Social Security Act to include IV-D 

agencies among the “qualified entities” that may enroll children in Medicaid 

for a presumptive eligibility period, based on preliminary information that 

indicates that the child is income-eligible for Medicaid. 

#Recommendation 18 (Federal Guidance) 

Provided that Congress amends the Social Security Act to allow State IV-D 

agencies to presumptively enroll children in Medicaid, OCSE and HCFA 

should strongly encourage all States to exercise this option or to take other 

steps to facilitate Medicaid enrollment, including placing Medicaid or SCHIP 

staff in IV-D offices, providing application forms to potentially eligible 

families, and arranging eligibility appointments. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-27 

payments, and/or deductibles. It is unfair 

not to ask noncustodial parents to contribute 

as well toward their children’s health care 

costs in appropriate situations. 

In order to achieve equity between custodial 

and noncustodial parents whose children are 

enrolled in Medicaid or SCHIP, the 

Working Group used the basic Medicaid and 

SCHIP cost-sharing policies as the starting 

point for its recommendation. 

The Medicaid program is available to 

children in low-income families. Because 

these families are, by definition, low 

income, States are not allowed to charge 

custodial parents enrollment fees, premiums, 

deductibles, coinsurance, co-payments, or 

similar charges for most Medicaid services 

to children. However, the Working Group 

recommends that the same standard should 

also apply to low-income noncustodial 

parents. No cost-sharing should be imposed 

upon noncustodial parents with incomes 

below 133 percent of poverty, which is the 

cut-off for Medicaid eligibility. 

Using this approach has three advantages: 

(1) the amount of cash support available to 

the child will not be diminished by virtue of 

the noncustodial parent’s contribution to 

medical support; (2) the noncustodial 

parent’s contribution to the child’s support 

will likely remain below Federal wagewithholding limits, reducing the number of 

situations in which employers and IV-D 

agencies have to wrestle with that difficult 

issue; and, (3) obligations imposed on lowincome noncustodial parents will not leave 

them with too little income to meet their 

own basic needs. 

The SCHIP program is generally available 

to children with family incomes above the 

Medicaid level but below roughly 200 

percent of poverty.60 (At least eight States 

provide eligibility for children whose family 

income is above this level.61) Whether or 

not there is any cost sharing for services to 

SCHIP children depends on how the State 

chooses to implement its SCHIP program.62 

If a State implements SCHIP through 

Medicaid expansion, then the Medicaid rules 

apply and families cannot be charged for 

children’s services. If a State creates a 

separate SCHIP program for some or all 

SCHIP-eligible individuals, then the State 

can require custodial parents to contribute 

“-- noncustodial parents vary by 

age, income, and marital status, and 

I would hope, as we proceed with 

our work, that we would consider 

the sets of issues that really 

challenge under-employed and 

unemployed noncustodial fathers 

and mothers.” 

~Jeffery Johnson, President and 

CEO, National Center for Nonprofit

Planning and Community 

Leadership (NPCL) 
CHAPTER 3

Page 3-28 Medical Child Support Working Group Report 

toward the premium for those children 

covered by the separate program.63 There 

are, however, limits on the amount that 

States can charge. For families with income 

below 150 percent of poverty, premiums can 

range from $1.00 per month to $19.00 per 

month, depending on family size and 

income.64 For families with incomes above 

150 percent of poverty, there are no specific 

restrictions on the amount that can be 

charged for premiums or deductibles/copayments. The aggregate cost of all 

premiums, deductibles, co-payments, and 

co-insurance charges, however, cannot 

exceed five percent of the family’s gross 

income. When charges exceed this amount, 

the State must suspend further charges.65

In short, in a separate SCHIP program States 

can impose costs on custodial parents with 

incomes above 150 percent of poverty as 

long as they stay within the five percent of 

gross income ceiling. It is appropriate to 

establish a similar cost-sharing scheme for 

noncustodial parents who are able to pay the 

costs. Therefore, the Working Group’s 

recommendation incorporates the five 

percent ceiling. This also harmonizes with 

the standard for determining the reasonable 

cost of private coverage. Coordinating the 

noncustodial parent contribution with that 

established for the custodial parent by 

Medicaid and SCHIP provides a coherent 

approach for decision makers to use to 

determine whether private or public 

coverage is appropriate. 

As long as a parent is not required to 

contribute more than five percent of the 

family’s gross income, States should be able 

to ask for premium contributions up to the 

actual premium cost. Or, if they wish, 

States may develop a sliding scale 

contribution schedule for noncustodial 

#Recommendation 19 (Best Practice, Federal Legislation) 

Part A (Best Practice): States should grant authority to the decision maker to 

order the noncustodial parent to contribute toward the State cost of 

providing coverage under Medicaid and SCHIP. Provided, however, no 

contribution should be ordered from any noncustodial parent whose net 

income (as defined by the State to determine Medicaid eligibility) is less than 

133 percent of poverty. 

Part B (Federal Legislation): Congress should amend §467 of the Social 

Security Act to provide that the amount the noncustodial parent may be 

ordered to contribute toward the monthly cost of coverage under Medicaid or 

SCHIP shall be the lesser of: (1) the estimated cost of enrolling the child in 

Medicaid or SCHIP; (2) five percent of the noncustodial parent’s gross 

income; or (3) the amount indicated by a sliding fee schedule, developed by 

the State, which takes into account ability to pay and average 

Medicaid/SCHIP costs for dependent children. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-29 

parents, similar to the ones many States use 

to impose premiums on custodial parents. In 

any case, both parents will then be 

contributing toward the cost of their child’s 

coverage. #See Recommendation 19.

Birthing Costs 

Additional costs to be considered include 

costs associated with pregnancy and 

childbirth. Most States permit a mother to 

recover costs associated with pregnancy and 

childbirth from the alleged father when 

paternity is established.66 This allows 

mothers who have paid these costs 

themselves to receive some reimbursement 

from the father. These laws are reasonable 

and should be maintained. 

Applying these laws in cases where 

pregnancy and childbirth costs have been 

covered by Medicaid, however, is highly 

problematic. This is because it runs counter 

to two other important public policy goals: 

(1) encouraging mothers to seek prenatal 

care, and (2) encouraging fathers to establish 

paternity. 

In 1985, the National Academy of Science’s 

Institute of Medicine issued a report entitled 

Preventing Low Birth Weight. The report 

found that significant numbers of lowincome women who were at high risk of 

giving birth to physically impaired infants 

did not seek prenatal care. As a result, many 

children were born with severe health 

problems. This was tragic for the children, 

and also meant that the public incurred 

substantial costs to care for these children. 

Better prenatal care would reduce these 

costs and give children a better chance for a 

healthy life.67 This is a benefit for the 

private insurance industry as well. 

That same year, the Southern Governor’s 

Regional Task Force on Infant Mortality 

published a report that reached similar 

conclusions.68 Both this report and the 

Preventing Low Birth Weight report 

identified the cost of care faced by 

uninsured mothers as a barrier to obtaining 

prenatal care and advised the government to 

expand Medicaid eligibility to deal with this 

problem. At the same time, these reports 

identified the child support cooperation 

requirement as a barrier within the Medicaid 

program itself. Some women who were 

eligible for Medicaid did not apply because 

they did not wish to establish paternity or 

seek medical support. 

Congress responded by expanding and 

simplifying Medicaid coverage for pregnant 

women in what is called the Poverty Level 

Pregnant Women Program (PLPW 

Program). In 1990, Congress eliminated the 

child support cooperation requirement for 

participants in the PLPW Program.69 In 

doing so, Congress observed that applying 

the cooperation requirement to pregnant 
CHAPTER 3

Page 3-30 Medical Child Support Working Group Report 

!TANF

Temporary

Assistance for

Needy Families

women had discouraged many of the women 

from seeking benefits that would give them 

access to early prenatal care. Indeed, the 

support cooperation requirements were 

deemed “a potential barrier to prenatal care 

for high-risk, low income women that would 

most benefit from it.”70

Congress recognized that eliminating the 

cooperation requirement would have fiscal 

consequences. States would no longer be 

able to seek reimbursement for prenatal, 

birthing, and post-natal Medicaid costs from 

the fathers of these children. Congress 

believed that the potential savings in human 

and fiscal terms, however, far outweighed 

the potential revenue loss. Thus Congress 

essentially adopted, a decade ago, a clear 

public policy that recognized that the value 

of encouraging mothers to seek and receive 

prenatal care far outweighed the potential 

cost recoupment from non-marital fathers. 

Despite this clear public policy, some State 

child support enforcement agencies continue 

to pursue prenatal, birthing, and post-natal 

costs after the child is born. For example, if 

a mother receives TANF benefits, the State 

may bring a legal action seeking to establish 

paternity and a child support order seeking 

to recoup the birth-related costs. Courts 

have found this practice acceptable as long 

as the action is brought after the child’s 

birth.71

While this practice may be technically legal, 

it clearly runs counter to the intent of 

Congress in removing the child support 

cooperation requirement from the PLPW 

program. Furthermore, there is some 

evidence that this practice is once again 

causing mothers to forgo prenatal care. 

From the mother’s point of view, it is 

irrelevant when the State pursues support. If 

there is a concern about cooperation, that 

concern will be just as real after the birth as 

before it. 

For this reason alone, the Working Group 

believes that State IV-D agencies should not 

pursue pregnancy and birth-related costs in 

Medicaid cases. 

Another reason to end this practice is that it 

discourages voluntary paternity 

establishment. Often the mother and father 

have an ongoing relationship and want to 

establish their child’s paternity. Since the 

early 1990s, Congress has placed great 

emphasis on the value of encouraging 

voluntary acknowledgement. Federal law 

requires every State to establish laws 

facilitating the voluntary establishment of 

paternity through the use of a simple 

acknowledgment process available to the 

parents at the time of their child’s birth.72 

Congress has provided incentive payments 

to States to encourage improvement in 

paternity establishment rates73 and penalties 

for States that do not show improvement in 
CHAPTER 3

Medical Child Support Working Group Report Page 3-31 

this area.74 The results are encouraging, but 

there is still more to be done, especially in 

working with low-income fathers. 

If fathers acquire unrealistically high child 

support debt when they acknowledge 

paternity, they will neither admit paternity 

nor join these programs. Even an 

uncomplicated birth is expensive and a Csection can easily double the cost. Nevada 

reports that it seeks $3,100 for a normal 

delivery and $6,700 for a C-section in its 

Medicaid recoupment efforts. Projects that 

work with low-income fathers report that 

imposing responsibility for birthing costs of 

this magnitude makes fathers very reluctant 

to establish paternity and join the programs. 

It is more important to establish paternity 

and future child support and to encourage 

fathers to establish a relationship with their 

children—perhaps through joining a 

fatherhood program—than to recoup 

pregnancy-related Medicaid costs. This is 

another reason why the Working Group 

believes that State child support 

enforcement agencies should not seek 

reimbursement of Medicaid-covered 

birthing costs. 

Furthermore, since the fathers of children 

receiving Medicaid are likely to be low 

income,75 the State usually cannot collect the 

assessed amounts anyway. Birthing costs 

thus artificially inflate the amount of arrears 

carried on the State’s books and thereby 

make program performance appear worse 

than it is. Moreover, to the extent that the 

State does collect the medical expenses as 

arrears owed to the State, this money 

reimburses the State at the expense of 

additional support that might go to the child. 

When both parents have limited income, as 

is almost always the case when Medicaid is 

involved, the IV-D program should 

maximize the amount of support going to 

the child rather than collect State debt. 

#See Recommendation 20.

Apportioning Responsibility for 

Unreimbursed Health Care 

Expenses 

Rarely are all health-related costs covered 

by family health coverage. Frequently, 

major expenses such as orthodontia, mental 

health services, and alcohol/drug 

rehabilitation are not covered at all. Unless 

these costs are addressed in the support 

order, the custodial parent has to absorb all 

of these costs. This inequity needs to be 

addressed. 

#Recommendation 20 (Federal Legislation) 

Congress should amend Title IV-D of the Social Security Act to preclude 

State IV-D agencies from attempting to recover Medicaid-covered prenatal, 

birthing, and perinatal expenses from the noncustodial parent. 
CHAPTER 3

Page 3-32 Medical Child Support Working Group Report 

Ordinary expenses (band-aids, aspirin, etc.) 

are relatively trivial and allowance for them 

is built into most State’s basic cash support 

guidelines amount.76 Extraordinary 

expenses are usually treated as an add-on to 

the basic support obligation or as a factor to 

be considered in deviating from the 

guidelines. The big issue here is 

distinguishing “ordinary” from 

“extraordinary” expenses. Most States do 

not define the difference in their guidelines. 

This leaves it to the courts/administrative 

agencies to decide on a case-by-case basis 

what to do. Not surprisingly, there is a huge 

amount of litigation in this area. 

Those States that do define the difference in 

their guidelines do so by looking at costs 

either by year or by illness. If unreimbursed 

expenses exceed a certain amount per year 

(e.g., they are greater than $250 per year per 

child) or they exceed a certain amount (e.g., 

$100) per illness, they can be considered 

“extraordinary.” Seven States use the 

former approach (three with lower dollar 

limits) and five States use the latter.77

The Working Group believes that HHS 

should require every State to have a welldefined written policy defining 

extraordinary expenses. In addition, HHS 

should clarify that every State’s child 

support guideline should give the decision 

maker the authority to order parents to share 

in the cost of co-payments, deductibles, and 

extraordinary expenses and should include 

such provisions in the support order. 

#See Recommendation 21.

Once it has been determined that a child has 

incurred an “extraordinary” expense, the 

cost must be apportioned between the 

parties. The Working Group learned that 23 

States have a formula for allocating the 

costs, 24 States treat the existence of such 

costs as reason for deviating from the 

guidelines, one State issues separate orders 

for such costs, and three States do not 

address the issue. Of those with a formula, 

the majority prorate the costs between the 

parents.78

The Working Group believes that it would 

be useful to have a standard national 

methodology for dealing with these costs. 

This would create more equity between 

similarly situated parents. It would also 

make it easier for State IV-D agencies to 

handle the issue in interstate cases as the 

#Recommendation 21 (Federal Regulation) 

The States should give the decision maker authority to order either or both 

parents to contribute toward: (1) the cost of any co-payments, deductibles, or 

costs associated with the ordered health care coverage; and (2) any 

uncovered medical expenses incurred by the child. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-33 

standard for these cases would then be the 

same as the standard for in-State cases. 

Since a majority of States now use the proration method, the Working Group 

recommends that HHS require all states to 

adopt the add-on approach and pro-rate the 

expenses between the parents. #See

Recommendation 22.

Once “extraordinary expenses” are defined 

and the proration formula is established, it 

should be relatively easy for the parents to 

resolve payment of these expenses 

themselves. However, there may be 

disputes that have to be settled. One parent 

may question whether a particular expense 

was necessary. Another parent might 

question whether it was appropriate to use a 

particular provider whose fees are high. It is 

also possible that the services were provided 

by an entity that does not participate in the 

insurance plan and the other parent 

questions whether he should have to pay in 

those circumstances. 

Settling these types of case-by-case 

problems is very labor intensive for private 

attorneys and can be very costly for the 

parents. Involvement in these individual 

case problems is usually not a good use of 

scarce IV-D resources. Several State IV-D 

programs reported that while they do get 

involved in such disputes, they consider 

them outside the basic mission of the IV-D 

program and a real drain in terms of time 

and personnel. 

The Working Group felt that States would 

be wise to develop simple pro-se processes 

for parents to deal with these issues on their 

own. California, for example, has devised 

rules that require parents to share any bills 

they want to claim as extraordinary expenses 

within 30 days of receipt. If the provider is 

an entity that does not participate in the 

child’s health care coverage program (for 

example, if the child is treated outside of his 

#Recommendation 22 (Federal Regulation) 

To the extent that unreimbursed costs are not included in the State’s basic 

child support guideline formula, those costs should be apportioned pro rata 

between the parties. 

#Recommendation 23 (Best Practice) 

Since the extent of unreimbursed costs is unknown at the time an order is 

established, each State should develop protocols that permit the court or 

administrative agency to reduce such expenses to a judgment based on the 

language of the order. These protocols should include time limits for the 

parent who has paid the expenses to claim reimbursement and time limits for 

the obligated parent to pay these expenses, as well as simple pro se 

procedures for making or contesting such claims. The protocols should also 

include procedures to enforce collection from the noncustodial parent. 
CHAPTER 3

Page 3-34 Medical Child Support Working Group Report 

HMO network), the use of that provider 

must be justified. #See Recommendation 

23.

Drafting the Medical Support 

Provisions of a Child Support 

Order 

Medical support provisions in child support 

orders should be specific enough to identify 

exactly what health care coverage has been 

ordered, but general enough that health care 

coverage can be changed without modifying 

the underlying order. Although not 

necessary to make a medical support order 

qualified under §609(a) of ERISA, it would 

be helpful if the support order specifies how 

premium costs, deductibles, co-payments, 

and uninsured medical expenses will be 

shared between the parents. Not including 

#Recommendation 24 (Best Practice) 

State child support guidelines should require that the medical support 

provisions of a child support order for private or public health care coverage 

clearly explain the obligation of each parent in meeting the child’s health care 

needs. Although not necessary to be qualified under §609(a) of ERISA, 

orders should address, as fully as possible, each of the following issues: 

♦ The party (custodial or noncustodial parent) responsible for obtaining 

public or private health care coverage 

♦ The type of coverage to be obtained 

♦ The cost of premiums and the manner in which each parent will 

contribute to those premiums 

♦ The type of uncovered expenses for which the parties will share costs 

♦ The specific manner in which each parent will contribute to the cost of 

uncovered expenses 

♦ The designation of primary and secondary coverage in any case in which 

both parties are to provide health care coverage 

♦ The circumstances under which the obligation to provide health care 

coverage for the child will shift from one parent to the other 

#Recommendation 25 (Federal Guidance) 

To facilitate implementation of Recommendation 24, the DOL and HHS 

should develop model language regarding health care coverage for inclusion 

in child support orders. The model language, which would not be mandatory, 

would alert attorneys, child support workers, and court personnel to common 

issues that should be addressed in such orders. 

#Recommendation 26 (Technical Assistance) 

Following adoption of the recommendations of the Medical Child Support 

Working group, DOL and HHS should provide training and technical 

assistance to courts to facilitate implementation of the recommendations, 

particularly those relating to the decision-making matrix and enrolling 

children in Medicaid and SCHIP. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-35 

sufficient detail in medical support 

provisions may preclude employers and 

parents from: (1) identifying exactly what 

health care coverage has been ordered, (2) 

obtaining contribution toward uncovered 

expenses; and (3) obtaining reimbursement 

from any health care provider because of 

confusion over which coverage is primary 

and which is secondary. 

Crafting a medical support provision in a 

child support order thus involves balancing 

all of these concerns. Every State should try 

to determine the proper balance, given its 

particular laws. The order should be as clear 

and concise as possible. #See 

Recommendation 24, Recommendation 25.

The Working Group expects HHS and DOL 

to undertake substantial education and 

training efforts for IV-D, Medicaid, and 

SCHIP staffs. However, courts also play an 

important role in establishing and enforcing 

medical support. They should receive 

special attention from HHS and DOL, which 

should consult with judicial leaders, and the 

organizations that represent them, and 

collaborate with these organizations to train 

judges, court administrators, and clerks.

#See Recommendation 26.

Endnotes 

 

1

 Wheaton, Laura. “Noncustodial Fathers: To 

What Extent do They Have Access to Health 

Insurance?” The Urban Institute (2000), Table 2. 

 

2

 Wheaton (2000), Table 3. 

3

 This includes Alaska, Arizona, Colorado, 

Connecticut, California, Idaho, Indiana, Iowa 

Kentucky, Louisiana, Massachusetts, Michigan, 

Missouri, Montana, Nebraska, New Hampshire, 

New Jersey, New Mexico, North Dakota, Ohio, 

Oklahoma, Oregon, South Dakota, South 

Carolina, Tennessee, Texas, and Wyoming. 

4

 See 45 CFR §302.56. 

5

 42 U.S.C. §652(f) (1999); 45 C.F.R. §303.31 

(1999). 

6

 It is worth noting that this recommendation 

echoes one made several years ago by the U.S. 

Commission on Interstate Child Support in its 

Report to Congress. The Commission 

recommended Federal regulations be changed to 

reflect “the payment of premiums for insurance 

plans carried by the custodial parent when such 

plans include the children at a cost less than that 

available to the obligor. This recognizes the 

realities of the health insurance marketplace, 

where the custodial parent may be able to obtain 

more comprehensive or less expensive coverage 

that that obtainable by the noncustodial parent.” 

U.S. Commission on Interstate Child Support, 

“Supporting Our Children: A Blueprint for 

Reform,” 138. 

7

Arkansas, California, Delaware, District of 

Columbia, Hawaii, Illinois, Iowa, Kentucky, 

Maine, Maryland, Michigan, Minnesota, 

Nebraska, New Hampshire, New Jersey, North 

Dakota, Rhode Island, Vermont, West Virginia, 

and Wyoming. Laura Morgan, Child Support 

Guidelines: Interpretation and Application, Table 

3-1, §3.01a (1999). 8

 Alabama, Alaska, Arizona, Colorado, 

Connecticut, Florida, Idaho, Indiana, Kansas, 

Louisiana, Massachusetts, Mississippi, Missouri, 

Montana, New Mexico, New York, North 

Carolina, Ohio, Oklahoma, Oregon, 

Pennsylvania, South Carolina, South Dakota, 

Tennessee, Texas, Utah, Virginia, Washington 

and Wisconsin, Id. 9

 Georgia and Nevada, Id. 10 Mississippi, Tennessee, Texas and Wisconsin. 

11 For example, Alaska, and Massachusetts. 

12 For example, Idaho. 

13 For example, Alaska, like the overwhelming 

majority of states, allocates costs based on the 

premium associated with covering the children in 

question, A.R.C.P. 90.3 (1999) (Morgan, Child 

Support Guidelines, §301(a) (1999)), while 

Massachusetts allocates based on the cost of 

family coverage (Mass. Gen. Laws Ann. Child 

Support Guidelines, II-G (1999)). 
CHAPTER 3

Page 3-36 Medical Child Support Working Group Report 

 

14 New York Family Court Act §424-a(a) reads 

in part: In addition, both parties shall provide 

information relating to any and all group health 

plans available to them for the provision of care 

or other medical benefits by insurance or 

otherwise for the benefit of the child or children 

for whom support is sought, including all 

information as may be required to be included in 

a qualified medical child support order.” 

15 42 USC §666(c) (1999). 

16 In 1998, of those employers offering health 

care coverage, 44 percent offered one plan, 24 

percent offer two plans, and 32 percent provide 

three or more options (KPMG, Health Benefits in 

1988, 30). 17 Congress conditioned an alternate recipient’s 

right to the receipt of benefits from a 

participant’s group health plan on the condition 

that the alternate recipient obtain a medical child 

support order that satisfies specific information 

and other requirements. The DOL has expressed 

the view, in a similar circumstance regarding 

qualified domestic relations orders under 

§206(d)(3) of ERISA, that administrators of 

pension plans should provide to prospective 

alternate payees plan and participant benefit 

information sufficient to prepare a QDRO. Such 

information might include the summary plan 

description and relevant plan documents. See, 

QDROs: The Division of Pensions Through 

Qualified Domestic Relations Orders, Question 

and Answer 2-1, U.S. Department of Labor 

(1997), 12. It is reasonable to assume that 

similar standards would apply in the case of 

qualified medical child support orders. 

18 Mass. Ann. Laws, Child Support Guidelines, 

II-G (1999). 

19 42 U.S.C. §§1397aa(a), 1397bb(b)(3)(C) 

(1999). 

20 HCFA issued interim standards on September 

28, 1998, “Quality Improvement System for 

Managed Care,” 61. 

21 As discussed in detail below, we anticipate 

that in such situations, the child would be 

enrolled in Medicaid or CHIP or another 

subsidized option if one is available (e.g., the 

Sacramento IV-D KIDS program) with financial 

contribution from the noncustodial parent 

commensurate with ability to pay. 

22 See, 45 C.F.R. §303.31(1999). The definition 

deeming employment-related coverage to be per 

se reasonable in cost was first promulgated in 

1985. As early as 1988, States were questioning 

whether this was a viable definition. In 

response, Child Support Enforcement reiterated 

 

its assumption that “most employment-related or 

other group health insurance is inexpensive to 

the employee/absent parent” citing a 1983 study 

by the National Center for Health Services 

Research which indicated that for low-wage 

employees with access to employment-related 

health insurance, 72 percent of the premium 

costs were paid for by employers. 53 Fed. Reg. 

36016-17 (Sept. 16, 1988). 23 See discussion at 53 Fed. Reg. 36016-17 (Sept. 

16, 1988). 24 Id. 25 United States General Accounting Office. 

Private Health Insurance: Continued Erosion of 

Coverage Linked to Cost Pressures. 

GAO/HEHS-97-122 (July 1997), 35. 

26 Workers in low-wage firms are also less likely 

than workers in other firms to be offered health 

benefits and to be eligible for coverage when it is 

offered (Stephen H. Long and M. Susan 

Marquis, Employment-Based Insurance: Recent 

Trends and Coverage for Low-Wage Workers 

(Preliminary Results). Rand (October 5, 1999), 

20. 

27 For example, health insurance coverage 

accounts for nearly 10 percent of expenditures 

for households with incomes below $10,000, 

while for households with incomes at or above 

$30,000, health insurance accounts for 2 percent 

of expenditures. Unpublished estimates by the 

U.S. Department of Health and Human Services, 

Office of the Assistant Secretary for Planning 

and Evaluation, using the 1997 Consumer 

Expenditure Survey. 

28 The average group premium ranged from 

$1,883 to $2,090 depending on plan type. 

Employee Benefits Institute. EBRI Databook on 

Employee Benefits (1997). See 

http://www.ebri.org/facts/0997fact.htm

29 Employee Benefits Institute. EBRI Databook 

on Employee Benefits (1997). See 

http://www.ebri.org/facts/0997fact.htm 30 Gabel, Jon R., Paul B. Ginsberg, and Kelly A. 

Hunt. “Small Employers and Their Health 

Benefits, 1988-1996: An Awkward 

Adolescence.” Health Affairs

(September/October 1997), 107. It is not 

surprising that nearly 40 percent of uninsured 

children live in families whose parent(s) worked 

in firms employing less than 25 employees, 

while just under 20 percent of uninsured children 

were in families where their parent(s) were 

employed in a company with 1,000 or more 

workers. Children were categorized by the size 

of the largest firm employing either parent. 
CHAPTER 3

Medical Child Support Working Group Report Page 3-37 

 

Based on 1998 Current Population Survey 

estimates in Committee on Ways and Means, 

U.S. House of Representatives. Medicare and 

Health Care Chart Book (May 17, 1999), 56. 31 In 1995, the average child support received 

was $3,373 (Lydia Scoon-Rogers, “Child 

Support for Custodial Mothers and Fathers: 

1995,” Census Bureau Current Populations 

Reports (March 1999), 60-196.) 32 See, Laura Morgan, Child Support Guidelines, 

§3.01, and discussion under Recommendation 1 

supra for more detail on this. 33 States raised this issue as early as 1988 when 

they were required to aggressively pursue private 

coverage for children receiving Medicaid even 

when this caused a drop in cash support. Prior to 

this time, States had to pursue private coverage 

only when the cost of family health coverage did 

not affect the noncustodial parent’s ability to pay 

cash support. 53 Fed. Reg.36015 (Sept. 16, 

1988). 

34 See, for example, Frank Furstenberg, Kay 

Sherwood, and Mercer Sullivan, Caring And 

Paying: What Fathers And Mothers Say About 

Child Support, Manpower Demonstration 

Research Corporation (1992). 

35 Wash. Rev. Code §26.09.105(1) (1999). Also, 

the decision maker can order the parent to 

provide insurance that exceeds 25 percent of the 

basic child support obligation if it is in the best 

interest of the child. Wash. Rev. Code 

§26.09.105(2). 

36 Colo. Rev. Stat. Ann. §14-10-115(g) (1999). 37 Me. Rev. Stat. Ann. tit.19A §2007(1998). 

38 Montana Code Annotated (MCA) 40-5-

806(a)(8). 

39 Pirog, Maureen A., Marilyn E. Klotz, and 

Katharine V. Byers. “Interstate Comparisons of 

Child Support Orders Using State Guidelines.” 

Family Relations 27(8): 291. 40 We also considered recommending a variable 

percentage based on the parent’s income. 

However, we concluded that this approach was 

complex to administer and would not necessarily 

achieve better results than a flat percentage. 

41 The Colorado Department of Health Care 

Policy and Financing had designed and 

implemented the “Safety Net Project” to improve 

service delivery and care coordination for 

children with special needs in HMOs. 

42 29 U.S.C. §1161 (1999). See also 

Recommendations regarding COBRA/HIPAA in 

Chapter 6. 

43 Arizona Ariz. C.S.G. (S. Ct. Admin Order 96-

29) (1998), Idaho, Idaho R. Civ. Pro. 6(c)(6) 

 

§8(c)(1)(1999); Massachusetts, Mass. Ann. 

Laws, Child Support Guidelines, II-G (1999); 

South Carolina, S.C. Code Regs. 114-4720 

(1999); and Wyoming, Wyo. Stat. Ann. 20-6-

302(b)(viii)(1999). Tex. Fam. Code §154.182, 

requires the court to consider insurance available 

to the obligee, only if the obligor does not have 

access to coverage for the child through his/her 

employer, union, trade association or other 

organization. 

44 The Arizona guideline States: “An order for 

child support shall assign responsibility for 

providing medical insurance for the children who 

are the subject of the support order. If medical 

insurance of comparable benefits and cost is 

available to both parents, the court should assign 

the responsibility to the parent having primary 

physical custody.” Ariz. C.S.G. (S. Ct. Admin. 

Order 96-29 (1998). 

45 Massachusetts provides that, if the custodial 

parent is already covering the children at the 

time the order is entered, then he/she can opt to 

continue that coverage even if the noncustodial 

parent has access to coverage, Mass. Ann. Laws, 

Child Support Guidelines, II-G (1999). 46 Unpublished calculation from HHS/Office of 

the Assistant Secretary for Planning and 

Evaluation based on the 1995 CPS Child Support 

Supplement. See APPENDIX D: Health Care 

Coverage for Child Support-Eligible Children, 

page A-32. 

47 For a summary of the law in this area see 

Laura Morgan, “The Duty of Step-Parents to 

Support Their Step-Children,” in Divorce 

Litigation (September 1996). An updated 

version is available on the web at 

http://www.supportguidelines.com/articles. 48 These States are Delaware, Hawaii, Iowa, 

Kentucky, Maine, Missouri, Montana, Nebraska, 

Nevada, New Hampshire, New Jersey, New 

York, North Carolina, North Dakota, Oklahoma, 

Oregon, South Dakota, Utah, Vermont and 

Washington. 

49 See, for example, Jocelyn Guyer and Cindy 

Mann, “Employed But Not Insured,” Center on 

Budget and Policy Priorities (1999). 

50 The Working group was provided extensive 

information about one of these programs, the 

Sacramento (California) IV-D KIDS program. 

We also received information about a similar 

program in Montana. Chapter 8 sets out the 

Working Group’s recommendations for 

encouraging similar efforts elsewhere. 

51 Conn. Agencies Regs. §46b-215a2a(g)(1)(B)(1999). 
CHAPTER 3

Page 3-38 Medical Child Support Working Group Report 

 

52 Tex. Fam. Code §154.182(b)(4) (1999). 

53 42 U.S.C. §1396e. 

54 42 U.S.C. §1396a(a)(10)(F). 

55 Current HCFA policy is that this can be done 

for employer-sponsored insurance if: 1) the 

children have been insured for at least 6 months; 

2) at least 60 percent of family premium costs 

are paid for by the employer; and 3) the costs to 

the State do not exceed the cost of SCHIP 

coverage. (Policy under development pending 

final SCHIP rule.) 

56 See http://www.hcfa.gov/ 57 DCL 97-91 from Commissioner David Gray 

Ross to all IV-D Directors, dated December 6, 

1997. 

58 42 U.S.C. §1396a (1999). 

59 The law allows a child to have private 

coverage and be enrolled in Medicaid. In a 

limited number of cases, the IV-D agency might 

also find that there is limited private coverage 

available to the child. It could order this 

coverage and enroll the child in Medicaid, 

assuring more comprehensive services to the 

child. 

60 42 U.S.C. 1397bb(b) (1999). 

61 As of June 1999, Connecticut, Georgia, 

Minnesota, Missouri, New Hampshire, New 

Mexico, Rhode Island and Vermont extended 

eligibility above the 200 percent of poverty level. 

62 42 U.S.C. §1397cc(e) (1999). Twenty- three 

States have a simple Medicaid expansion, while 

33 have created a separate CHIP program. (Of 

the 33 with separate programs, 15 States have all 

of their CHIP-eligibles in a separate program, 

and 18 have a hybrid model with some CHIP 

eligibles in Medicaid and some in a separate 

program.) 

63 As of June 1999, 23 States had developed 

policies under which the parents of CHIPeligible children are asked to contribute toward 

the CHIP premium. These States are Alabama, 

California, Colorado, Connecticut, Delaware, 

Florida, Georgia, Illinois, Iowa, Kansas, 

Kentucky, Maine, Massachusetts, Michigan, 

Missouri, Montana, Nevada, Nebraska, New 

York, North Carolina, Rhode island, Vermont 

and Wisconsin. 

64 42 U.S.C. §1397cc(e)(3)(A) (1999). 

65 42 U.S.C. §1397cc(e)(3)(B) (1999). 

66 At least 30 States have such laws on their 

books. These States are Alabama, Arizona, 

California, Colorado, Delaware, Hawaii, Iowa, 

Kentucky, Maine, Maryland, Michigan, 

Minnesota, Mississippi, Montana, Nebraska, 

Nevada, New Hampshire, New Jersey, New 

 

Mexico, North Dakota, Ohio, Oklahoma, Rhode 

Island, South Dakota, Tennessee, Utah , 

Washington, Wisconsin, and Wyoming. 

67 Indeed, the Institute calculated that there 

would be $3.38 in savings for every $1.00 of 

public funds spent on prenatal care. The 

Institute’s report is discussed extensively in 

Lewis v. Grinker, 965 F.2d 4904 (2d Cir. 1992). 68 The title of the report is For the Children of 

Tomorrow. 69 42 USC §1396k(a)(1)(B). See also 45 CFR 

§433.145(a)(2) and §433.147(a). 

70 See, H. Rpt. No. 101-881, 101st Cong. 2d Sess. 

106-107 (1990), reprinted in 1990 U.S. Code 

Cong. & Admin. News 2017, 2118-2119. 

71 See, for example, Matter of Steuben County v. 

Deats, 76 N.Y.2d 451, 560 N.Y. Supp. 2d 404 

(1990); Perry v. Dowling, 963 F. Supp. 231 

(W.D. N.Y. 1997). 

72 42 USC §666(a)(5)(C). 

73 Id. §658a(b)(6)(A). 74 Id. §609(a)(5). 75 Wheaton (2000),15. 

76 Laura Morgan, Child Support Guidelines, 

Chapter 3, §301(b)(3). 

77 Morgan, Child Support Guidelines. 

78 Jane Venohr and Robert Williams, The 

Implementation and Periodic review of State 

Child Support Guidelines, 33 Family Law 

Quarterly 7 (Spring 1999), Table 4, 19. 
CHAPTER 4

Medical Child Support Working Group Report Page 4-1 

!ERISA 

Employee Retirement 

Income Security Act 

of 1974 

!QMCSO 

Qualified Medical 

Child Support Order 

CHAPTER 4.

Implementing a New Tool:

The National Medical

Support Notice and

Related Issues

National Medical Support Notice

Background 

Health care coverage for children living in a 

single-parent home can be enforced through 

a medical child support order in private 

domestic relations proceedings or as the 

result of State IV-D agency efforts to 

establish and/or enforce medical child 

support obligations. Congress amended 

ERISA in 1993,1

 requiring group health 

plans to provide benefits in accordance 

with the provisions of any QMCSO. 

This was not enough, as child support 

enforcement agencies have rapidly moved to 

automated, administrative processes to 

secure obligations. The QMCSO 

requirements may be interpreted to 

require the IV-D agency to obtain 

specific information to tailor an order in 

compliance with those requirements, a labor 

intensive (“by the each”) process. Thus, the 

conflicts between the QMCSO requirements 

and the need of State agencies to automate 

!CHAPTER 4 AT A GLANCE

NATIONAL MEDICAL SUPPORT NOTICE, 4-1 

Background, 4-1

The Notice and ERISA, 4-3

Domestic Violence Issues, 4-4 

High-Volume Administrative Enforcement, 4-4

Timetable: NPRM, Final Rule, State Legislation, 4-6

Overview of Notice, 4-6

Working Group’s Discussion of the Notice, 4-8

RECOMMENDATIONS OF THE WORKING GROUP ON MAKING THE NOTICE WORK 

BETTER, 4-10 

Program Implementation Issues, 4-10

COVERAGE FOR CHILDREN OF FEDERAL EMPLOYEES AND MILITARY PERSONNEL, 4-13 

Theme

The National Medical Support Notice is intended to provide a standardized means of 

communication between State child support enforcement agencies, employers, and 

administrators of group health plans regarding the medical support obligations of 

noncustodial parents. The Notice will facilitate the process of enrolling children in the 

group health plans for which their noncustodial parents are eligible. While the Notice that 

has been proposed would go a long way towards improving medical support enforcement, 

there are changes that can be made that will further simplify and streamline the process 

and make it less burdensome to all the parties involved. Steps also should be taken to 

make the Notice applicable to the Federal civilian and military health care plans. 
CHAPTER 4

Page 4-2 Medical Child Support Working Group Report 

!CSPIA

Child Support

Performance and

Incentive Act of

1998

!OBRA

Omnibus Budget

Reconciliation Act

of 1993

!NMSN

National Medical 

Support Notice 

their enforcement procedures have frustrated 

attempts to enroll children in noncustodial 

parents’ group health plans. There are 

several reasons for continued frustration. 

♦ Prior to CSPIA, there was no clearly 

defined “tool” to enforce medical 

support obligations, as there was to 

enforce child support (income 

withholding notice). 

♦ The OBRA ’93 amendments contained 

highly individualized and specific 

requirements that each order had to 

satisfy to be “qualified” by an ERISA 

plan administrator. 

♦ The wide variety of notices and orders 

that various States use to enforce 

medical child support obligations, and 

the failure of many of these orders to 

comply with ERISA requirements, 

frequently confuses and frustrates 

employers, plan administrators, and 

State IV-D agencies. As a result, 

children face unnecessary delays or 

denials when attempting to enroll in 

their noncustodial parent’s group health 

coverage. 

♦ Plan administrators often do not agree 

on which notices and orders satisfy 

ERISA requirements and State IV-D 

agency personnel are often unfamiliar 

with those requirements. 

♦ Because a degree of standardization is 

essential to optimal use of automated 

systems, the lack of uniformity or 

standardization among plan 

requirements and “qualified” medical 

support orders also precluded the 

effective use of automation to facilitate 

the implementation and enforcement of 

medical support obligation services by 

IV-D agencies. 

♦ This lack of uniformity or 

standardization among plan 

requirements—and hence, the content of 

a “qualified” medical support order—

required IV-D agency staff to invest 

significant time and effort in 

determining each plan’s standard for 

qualifying a medical child support order 

and obtaining the information necessary 

to satisfy that particular standard. 

♦ The methods States use for 

communicating with all the associated 

parties vary widely. 

♦ Where a medical support provision of a 

child support order has been rejected by 

the plan administrator, there is presently 

no streamlined mechanism to appeal that 

decision. Hence, the Working Group’s 

focus is on ensuring the document 

forwarded to the plan administrator is 

legally sufficient to avoid delay or 

denial. 

The provisions of CSPIA that relate to the 

NMSN were intended to alleviate some of 

those problems.2

 Specifically, CSPIA 

directed the Secretaries of Labor and of 

HHS to jointly develop and promulgate by 

regulation a National Medical Support 

Notice.3

 The same law amended ERISA4 to 

require the administrator of a noncustodial 

“We want the notice to be as 

standardized as possible, the actual 

form itself, so that ...an employer or a 

plan getting one of these things knows 

that ... all the information is going to 

appear in roughly the same place 

irrespective of whether it comes from 

West Virginia or New York or 

Washington.”

~Nell Hennessy, Senior Vice 

President, Actuarial Sciences 

Associates, Inc. 
CHAPTER 4

Medical Child Support Working Group Report Page 4-3 

parent’s employment-related group health 

plan to deem an appropriately completed 

Notice (that also satisfies the QMCSO 

requirements) to be a QMCSO for the child 

and to implement coverage in a timely 

manner.5

 This “deeming” provision and 

time-limited responses are critical to the 

IV-D agency’s implementation of medical 

support in an expeditious and automated 

fashion. 

The Notice and ERISA 

CSPIA requires the NMSN to conform to 

the requirements of §609(a) of ERISA6

 and 

to Title IV-D of the Social Security Act;7

 it 

also requires IV-D agencies to issue the 

Notice to the employer of a noncustodial 

parent when alternative coverage is not 

provided for in a child support order. In 

recognition of employer concerns that the 

form be made easily accessible to the 

various parties who may have to deal with it, 

Congress directed that the form be “easily 

severable” so that the sections could be 

handled by the employer and by the plan 

administrator, if different from the 

employer. Amendments to §466(a)(19)8

 of 

the Social Security Act require States to 

enact laws that mandate State agencies’ use 

the Notice as the prescribed method of 

enforcing the health care coverage 

provisions in child support orders. This will 

$ NMSN or QMCSO: What’s the Difference?

For IV-D agencies, there really is not a difference between an NMSN and a QMCSO. The 

NMSN is merely a subset of QMCSOs that will be issued by the IV-D agencies. 

(Remember that a QMCSO may be a judgment, decree, or order issued by a court of 

competent jurisdiction through an administrative process that has the force and effect of law, 

or an administrative notice that is issued through such an administrative process.) CSPIA 

mandated the development of the NMSN as a uniform medical child support order (for the 

purposes of this Report, any reference to a medical child support order includes, with respect 

to IV-D agencies, administrative notices that may be issued by such agencies to enforce the 

medical support provisions of a child support order, including the NMSN) to be issued by 

State IV-D agencies and that would, if appropriately completed, be deemed to be a QMCSO. 

However, a NMSN is still subject to all of the procedural requirements that any QMCSO is 

subject to, including a determination by the plan administrator of whether it is qualified. 

Custodial parents seeking to enforce the medical child support obligations of the 

noncustodial parent through their own means will continue to present the court or 

administrative order to the group health plan for a determination of whether it is a QMCSO. 

“What we want to do is facilitate and 

streamline efforts to get children 

enrolled in health insurance, and not 

bog this whole process down in red 

tape... to where the children are 

delayed from being enrolled in 

available insurance.” 

~Michael Generali, Intergovernmental 

Liaison for the Child Support Division, 

Office of the Attorney General, Texas 
CHAPTER 4

Page 4-4 Medical Child Support Working Group Report 

ensure that plan administrators receive 

uniform notices from child support agencies 

in every State.9

If the administrator of a noncustodial 

parent’s ERISA-covered group health plan 

receives an appropriately completed Notice 

that has been issued by a IV-D agency and 

that satisfies the requirements of §609(a) of 

ERISA, that Notice must be deemed a 

QMCSO. Within 40 business days after the 

date of the Notice the plan administrator 

must notify the issuing agency whether 

coverage is available to the child named in 

the Notice. The child’s custodial parent or a 

substituted State official must be provided 

with a description of coverage available 

under the plan and any forms or documents 

necessary to effectuate such coverage.10 

#See Recommendation 27.

Domestic Violence Issues 

ERISA originally provided that a medical 

child support order would be deemed a 

QMCSO only if the order clearly specified, 

among other things, the name and mailing 

address of each child covered by the order. 

However, State and Federal law prohibit the 

disclosure of the child’s and custodial 

parent’s address in cases in which there is an 

identified possibility of domestic violence or 

abuse.11 The child support enforcement 

agencies were thus unable to craft medical 

child support orders that would be qualified 

in cases in which they were prohibited from 

disclosing the child’s address. Congress 

responded by amending ERISA to permit 

the court or administrative agency to 

substitute the name and mailing address of 

an official of a State or of a political 

subdivision of the State for the mailing 

address of the child.12

High-Volume Administrative 

Enforcement 

The use of automation has been critical in 

the effort to streamline case processing and 

data accuracy and to improve program 

performance. Based on the experience of 

the States, the Working Group concluded 

that automated systems could facilitate 

medical support enforcement by expediting 

the transmission of required data and the 

submission of time-sensitive responses. 

Central and State systems staff indicated that 

these modifications would be relatively 

simple and require approximately six 

months to complete. The Working Group 

#Recommendation 27 (Federal Guidance) 

DOL and HHS should: (1) make it clear that the Notice is deemed to be a 

Qualified Medical Support Order only if issued by IV-D agencies, and (2) 

explain how the QMCSO process works for private parties. (See 

Recommendation 25) 
CHAPTER 4

Medical Child Support Working Group Report Page 4-5 

!TANF

Temporary

Assistance for

Needy Families

!PRWORA 

Personal 

Responsibility and 

Work Opportunity 

Reconciliation Act of 

1996 

determined that State child support 

enforcement automated systems should be 

modified, at a minimum, so that they could: 

♦ Produce the form to be used as the 

prescribed Notice 

♦ Pre-file common case identification data 

♦ Automatically create entries in case 

chronology files, which record when 

and to whom a Notice was sent 

♦ Receive and record information about 

the availability of health care coverage 

from custodial and noncustodial parents 

as well as employers and plan 

administrators 

♦ Communicate information to TANF and 

Medical Assistance agencies and to 

custodial parents 

The Working Group considered the 

feasibility of establishing mainframe-tomainframe computer or Internet linkages 

between State child support databases and 

other entities involved in the Notice 

implementation process, including those of 

employers/plan administrators, Medicaid, 

and SCHIP. The Working Group did not 

recommend establishment of such linkages. 

This is an important issue that needs further 

study. #See Recommendation 28.

States report that they continue to be 

preoccupied with ensuring that their child 

support enforcement automated systems 

meet PRWORA certification 

requirements. For this reason, most 

states will not be able to begin modifying 

their systems to address medical support 

requirements until after October 1, 2000. 

This timing correlates with the projected 

September 2000 publication date of Final 

Regulations promulgating the NMSN, and 

with the possible availability of enhanced 

Federal funding to assist in financing these 

modifications, as proposed in 

Recommendation 65. 

The Working Group considered whether the 

NMSN and the Order/Notice to Withhold 

Income for Child Support should be 

combined into one form. Employer 

representatives stated that this would be 

administratively burdensome, especially for 

large multistate employers; they also 

observed that this would frequently cause 

unnecessary delays in enrolling children in 

required health care coverage. 

Representatives of employers and insurers 

explained that large, multistate employers 

#Recommendation 28 (Technical Assistance) 

The DOL and HHS should collaborate with State IV-D agencies and 

organizations representing employers, plan administrators, and payroll 

agents to develop automated State IV-D systems that can produce the 

National Medical Support Notices and distribute these Notices and their 

responses to affected parties. 

" See

CHAPTER 8.
CHAPTER 4

Page 4-6 Medical Child Support Working Group Report 

frequently separate payroll and health plan 

administration. The component that would 

process the NMSN and the one that 

processes the Order/Notice to Withhold 

Income for Child Support are not only 

administratively separate, but are often 

located in different parts of the country. 

CSPIA allows, and the Working Group 

concluded, that these two forms remain 

separate. 

Timetable: NPRM, Final Rule, 

State Legislation 

CSPIA specifically directed the Working 

Group to make recommendations based on 

assessments of the form and content of the 

NMSN as issued under regulations.13 To 

enable its members to become familiar with 

the issues considered by the agencies 

responsible for developing the Notice, the 

Working Group invited staff of HHS and 

DOL to attend Working Group meetings. 

Federal staff attended several meetings, 

provided overviews of the proposed Notice, 

and shared their views regarding the relevant 

issues.14 As a result of this collaboration, 

the Working Group’s recommendations are 

reflected in the proposed Notice 

promulgated by the agencies. 

In an effort to ensure that the NMSN would 

facilitate rather than complicate State 

agency efforts to secure health care coverage 

for children—as is consistent with 

Congressional intent as well as the concerns 

of the Working Group—the Working Group 

recommended, and the agencies agreed, that 

the Notice should be promulgated in a 

proposed regulation rather than as interim 

regulations. Notices of Proposed Rule 

Making (NPRM), promulgating the NMSN, 

were published in the Federal Register on 

November 15, 1999. The recommendations 

contained in this chapter regarding the 

NMSN are based on the Working Group’s 

review of the NPRM. 

Overview of Notice 

The proposed NMSN is comprised of two 

parts: Part A, the Employer Withholding 

Notice, and Part B, the Medical Support 

Notice to the Plan Administrator. Each part 

includes information to be provided by the 

State IV-D agency, including the names and 

mailing addresses of the employee/obligor, 

the child and the employer, and the type of 

coverage to be provided, such as basic, 

dental, vision, mental health and 

prescription. They also contain information 

related to the underlying child support order, 

such as the date of the order and the court or 

agency issuing the order. 

Part A includes an Employer Response 

form. If the employer does not offer group 

health coverage, or if the employee is among 

a class of employees that is not eligible for 

family coverage under the employer’s plans, 

or if the employee is not employed by the 
CHAPTER 4

Medical Child Support Working Group Report Page 4-7 

employer, the employer checks the 

appropriate box and returns the Response 

Form to the State agency. Otherwise, the 

employer forwards Part B to the appropriate 

plan administrator. 

If, after receiving enrollment information 

from the plan administrator, the employer 

determines that State or Federal withholding 

limitations prevent withholding the required 

employee contribution to obtain coverage, 

the employer checks the appropriate box to 

indicate that withholding limits apply and 

returns Part A to the State agency. 

The instructions to Part A inform the 

employer of the following: 

♦ The employer’s responsibilities with 

respect to the Notice, including its 

obligation to forward Part B to the 

administrator of each group health plan 

in which the child may be eligible to 

enroll 

♦ The limitations on and priority of 

withholding 

♦ The duration of the withholding 

obligation 

♦ Possible sanctions to which the 

employer may be subject 

♦ The employer’s obligation to notify the 

State agency if the employee’s 

employment terminates 

♦ The employee’s liability for making any 

necessary employee contributions to the 

plan 

♦ A means to contact the State agency 

with any questions 

The Plan Administrator Response form in 

Part B notifies the State agency of the 

following: 

♦ Any defects in the Notice 

♦ When it was determined to be a 

QMCSO 

♦ Either that the child has been enrolled in 

the plan, or of the options available 

♦ The effective date of coverage and the 

option selected in which the child will 

be enrolled, including a description of 

the plan 

The instructions to the Plan Administrator 

inform the plan administrator of her 

responsibilities with respect to the Notice, 

including the following: 

♦ Informing the parties when coverage is 

effective 

♦ Providing a description of the coverage 

♦ Providing the custodial parent with 

forms, documents and information 

necessary to effectuate coverage 

♦ Notifying the participant that his 

coverage may be changed by the IV-D 

agency, based on an election made for 

the child. 

The Working Group’s proposed

Notice and recommendations on

that Notice are contained in

APPENDIX E: National Medical

Support Notice, page A-37. 
CHAPTER 4

Page 4-8 Medical Child Support Working Group Report 

The instructions also inform the 

administrator that the child may not be 

denied coverage on the ground that the child 

was born out of wedlock, is not claimed as a 

dependent on the participant’s Federal 

income tax return, or does not reside with 

the participant, and that enrollments must be 

made without regard to open season 

restrictions. In addition, the instructions 

inform the administrator that the child is to 

be treated as a dependent under the terms of 

the plan and that the child may be entitled to 

COBRA continuation coverage under 

certain circumstances. Finally, the 

instructions set forth the conditions under 

which the child may be dis-enrolled from 

the plan. 

Working Group’s Discussion of 

the Notice 

After review and assessment of the form and 

content of the Notice as issued under 

proposed regulations published in the 

Federal Register on November 15, 1999, it 

is the consensus of the Working Group that 

this proposed Notice conforms with 

applicable Title IV-D and ERISA 

requirements and other mandatory 

standards, as required by CSPIA. Further, 

the Working Group believes that, when 

implemented and properly completed, the 

proposed Notice will be an effective and 

valuable asset to States in enforcing the 

medical support obligations of noncustodial 

parents. It is essential that the proposed 

Notice be simple, easy to understand and, as 

far as possible, similar in format to the 

Order/Notice to Withhold Income for Child 

Support. The Working Group made several 

significant recommendations on the Notice, 

as discussed below. Based on the above, the 

Working Group recommends that the final 

rule for the NMSN should be published by 

September 2000 to allow States sufficient 

time to implement automated processes by 

October 1, 2001. #See Recommendation 

29. 

The Working Group determined that user 

familiarity, timely transmission of required 

data, and good coordination between 

involved parties are important keys to the 

effective use of the proposed Notice. The 

Working Group recommends that 

DOL/HHS implement strategies to reach out 

to and educate representatives of all of the 

groups that have a need for, or interest in, 

use of the Notice. An easy-to-understand 

#Recommendation 29 (Federal Regulation) 

HHS and DOL should publish the National Medical Support Notice in final 

form no later than September 1, 2000 to allow States sufficient time to 

implement automated processes by October 1, 2001. 
CHAPTER 4

Medical Child Support Working Group Report Page 4-9 

booklet similar to HHS’ The Employer’s 

Desk Guide to Child Support and DOL’s 

booklet on Qualified Domestic Relations 

Orders (QDROs) was discussed as a 

possible component of this strategy. The 

booklet could provide guidance with respect 

#Recommendation 30 (Education/Technical Assistance) 

The DOL and HHS should develop strategies to educate and reach out to all 

categories of constituents who have a need for, or interest in, the National 

Medical Support Notice, including the following categories of constituents:

American Bar Association 

State and Local Bar Associations 

State Courts 

Private Attorneys 

American Payroll Association 

Child Support Organizations (NCSEA, ERICSA, WICSEC) 

National Coordinating Committee for Multi-employer Plans 

AFL-CIO 

International Foundation of Employee Benefit Plans 

Association of Private Pension and Welfare Plans 

ERISA Industry Committee 

Society of Professional Benefit Administrators 

National Association of Insurance Commissioners 

Society for Human Resource Management 

Native American Tribes 

Federal Government 

Military 

Faith-Based Organizations 

State and local governments 

#Recommendation 31 (Education and Technical Assistance) 

DOL and HHS should reach out to courts and administrative authorities to 

educate them regarding the Notice and the health coverage data required for 

completion. 

#Recommendation 32 (Education/Technical Assistance) 

The DOL and HHS should draft an easy-to-understand booklet similar to 

HHS’s The Employer’s Desk Guide to Child Support and DOL’s booklet on 

Qualified Domestic Relations Orders (QDRO) under ERISA. The booklet 

should explain the National Medical Support Notice and the DOL’s views and 

interpretations of ERISA’s Qualified Medical Child Support Order (QMCSO) 

provisions. 

#Recommendation 33 (Federal Guidance) 

The DOL should inform employers, insurers, and plan administrators that 

when a noncustodial parent carries health care coverage for a child, and the 

provider of services or the custodial parent of such child submits the claim, 

42 USC §1396g(a)(5) requires the insurer to pay the person or entity that 

submits the claim to the same extent the employee is entitled to be paid. 
CHAPTER 4

Page 4-10 Medical Child Support Working Group Report 

to the use of the NMSN, as well as the 

general ERISA provisions governing 

QMCSOs. #See Recommendation 30, 

Recommendation 31, Recommendation 32, 

Recommendation 33.

Recommendations of the Working

Group on Making the Notice Work

Better

The Working Group made a number of 

recommendations, which it believes will 

further enhance the effectiveness of the 

Notice. The recommendations are divided 

into two categories. The first category—

identified as Notice Process 

Recommendations—are intended to 

improve the effectiveness of the Notice. 

The second category—identified as 

Technical Notice Comments—suggest 

technical changes to the Notice that the 

Working Group believes will help to 

improve the effectiveness, simplicity and/or 

the readability of the proposed Notice itself. 

These latter recommendations are contained 

in APPENDIX E: National Medical Support 

Notice (page A-37) together with the 

Working Group’s Recommended Notice. 

Program Implementation Issues 

The Working Group also discussed the 

importance of State IV-D agencies issuing 

release notices to employers when 

noncustodial parents’ medical support 

obligations under a child support order 

terminate (such as the notice used by 

Washington State). Standard forms make it 

easier for employers and plan administrators 

to cooperate with child support agencies in 

medical child support cases. However, the 

Working Group rejected the idea of 

including a release notice as an integral part 

of the NMSN, because this would 

unnecessarily complicate a notice that was 

intended primarily for enrollment purposes. 

#See Recommendation 34.

The Working Group also approved requiring 

employers to send copies of any COBRA 

notices related to a child’s loss of health 

coverage to any child support agency that 

has issued a medical child support order to 

the plan. The Working Group recognizes 

that it is important for children to have 

continuous health care coverage. Plans are 

currently required to send COBRA notices 

when a child loses coverage for specified 

#Recommendation 34 (Technical Assistance) 

The DOL and HHS should develop and make available to States a suggested 

model “Notice of Release” that State IV-D agencies may issue to employers 

when a noncustodial parent’s obligation to provide health care coverage 

terminates. 

# See 

APPENDIX F: 

Washington State 

Model Notice of 

Release Form, 

pageA-55. 
CHAPTER 4

Medical Child Support Working Group Report Page 4-11 

COBRA events. A child support 

enforcement agency that has issued a NMSN 

to a plan also needs to receive copies of any 

COBRA notices related to the child’s loss of 

health care coverage so that it can decide 

whether to enroll the child in COBRA or 

other alternative coverage. Unless child 

support agencies are notified of the 

impending loss of insurance, the coverage 

may lapse, and the child will probably be 

uninsured. At the same time, the burden of 

sending an identical COBRA notice to the 

IV-D agency is not significant since the plan 

is already required to prepare and send the 

notice to the child (in reality, the custodial 

parent). #See Recommendation 35.

As discussed above, Congress amended 

§609(a) of ERISA to permit the court or 

administrative agency issuing the order to 

substitute the name and mailing address of 

an official of a State (or of a political 

subdivision of the State) for the mailing 

address of the child in the order. The 

proposed NMSN promulgated by DOL and 

HHS has made provision for such 

substitution. 

However, in cases where a State official’s 

name and address have been substituted for 

the child’s address on an NMSN, the 

administrator of a plan that provides benefits 

only in a geographically limited area (or 

which has one or more options that provide 

benefits only in a geographically limited 

area) may be unable to determine whether 

the child is in or close to the service area of 

the plan (or any of the geographically 

limited options). Disclosing the child’s 

approximate location might increase the risk 

of domestic violence to the custodial parent 

or child. Accordingly, the Working Group 

recommends that the plan administrator 

provide information to the child support 

enforcement agency, so that the agency can 

determine whether the coverage (or any 

options) is accessible, as defined in 

Recommendation 8. #See 

Recommendation 36, Recommendation 37, 

and Recommendation 38.

The Working Group also considered 

whether the employer—prior to forwarding 

Part B to the plan administrator—should 

determine whether the State or Federal 

CCPA limits would prevent withholding of 

sufficient amounts from the employee’s 

wages to pay any employee contributions 

#Recommendation 35 (Federal Legislation) 

Congress should enact legislation requiring health care plans to send a copy 

of any COBRA notice related to a child’s loss of health coverage to the State 

IV-D agency if the health care plan received any QMCSO, including the 

National Medical Support Notice for that child, from the IV-D agency. 
CHAPTER 4

Page 4-12 Medical Child Support Working Group Report 

necessary to obtain coverage for the child 

under the plan. However, employer 

representatives indicated that payroll offices, 

where such determinations are made, often 

do not have information related to the 

employee contributions required by the 

group health plan. 

This lack of information is more significant 

in cases in which there are different 

employee contributions required for 

different options available under the plan, 

and in the case of collectively bargained 

multiemployer plans. Accordingly, the 

Working Group determined that it would not 

be reasonable to require the employer to 

make determinations regarding withholding 

limitations prior to the plan administrator’s 

determination of whether the Notice is 

qualified. 

#Recommendation 36 (Federal Regulation) 

If some or all of the options under a health care plan are limited to specified 

geographic service areas, such as those covered by specific zip codes, then: 

♦ The plan administrator should indicate that geographic restrictions apply 

and should provide information that would make it possible for the IV-D 

agency to determine whether the coverage is accessible to a child (see 

Recommendation 8). 

♦ The plan administrator should be instructed to enroll the child—unless 

the IV-D agency requests that a child not be enrolled—even if the only 

available plan coverage is geographically limited and the child is outside 

the plan’s service area. 

#Recommendation 37 (Federal Regulation)

If the plan administrator cannot determine a child’s zip code or location from 

the Notice because a Substitute Official’s address is used, the plan 

administrator should be instructed to contact the IV-D agency and provide 

sufficient information to permit the agency to decide whether or not the 

coverage is accessible as defined in Recommendation 8. 

#Recommendation 38 (Best Practice) 

In situations in which the IV-D agency is advised that a choice is required 

with regard to plan options, the agency should do the following: 

♦ If there is a Medicaid assignment in effect, the IV-D agency should consult 

with the custodial parent and the Medicaid agency, review the State’s 

treatment of coverage under child support guidelines, choose the 

appropriate option consistent with the best interests of the child, and 

notify the plan. 

♦ If there is no Medicaid assignment in effect, the IV-D agency should 

contact the custodial parent regarding the options, review such options in 

light of the State’s treatment of coverage under the child support 

guidelines, ascertain the custodial parent’s choice, and notify the plan. 
CHAPTER 4

Medical Child Support Working Group Report Page 4-13 

Coverage for Children of Federal

Employees and Military Personnel

Since the passage of the OBRA’ 93, States 

have been required to enact laws under 

which employers and insurers must enroll a 

child in health coverage upon application by 

the custodial parent or IV-D agency in 

instances when a court or administrative 

agency orders an obligor to provide health 

coverage for a child and the obligor is 

eligible for such coverage but fails to enroll 

the child.15

Ironically, Federal law specifically bars the 

Federal government and the armed forces 

from enrolling dependents unless requested 

to do so by the employee from whom they 

derive coverage.16 This means that a 

substantial number of children who could 

obtain private coverage through a parent 

who is employed by the Federal government 

or the armed forces are unable to obtain this 

coverage unless the employee makes the 

request. It also appears to be inequitable for 

the Federal government to subject all 

employers except itself and the armed forces 

from this involuntary enrollment policy. 

There have been efforts over the last few 

years to address this issue, including 

introduction of legislation in the current 

Congress.17 The Working Group believes 

Congress should enact such legislation as 

quickly as possible. 

In conjunction with this, Congress should 

also clarify that the provisions of §1908 that 

prohibit employers from discriminating 

against dependents who are non-marital 

children, do not live with the employee, 

and/or who are applying out of season also 

apply to the Federal government. #See 

#Recommendation 39 (Federal Regulation) 

If an employee is in a waiting period that will expire within 90 days after the 

receipt date of the Notice, then the plan administrator should: (1) determine 

whether the Notice is a qualified order, and (2) notify the IV-D agency and the 

parents of the date on which coverage will begin. 

If the waiting period expires more than 90 days after the receipt of the Notice, 

or if the duration of the waiting period is determined by some measure other 

than the passage of time (for example, the completion of a certain number of 

hours worked), then once the plan administrator has determined that the 

Notice is a qualified order, the plan administrator would describe the waiting 

period on the portion of the Notice returned to the IV-D agency (Part B), and 

the employer would notify the plan administrator when the employee is 

eligible to enroll in the plan and when a NMSN is in effect with respect to one 

or more children of the employee. The plan administrator then notifies both 

parents. 
CHAPTER 4

Page 4-14 Medical Child Support Working Group Report 

Recommendation 41, Recommendation 42, 

Recommendation 43.

The Working Group believes that 

implementing the NMSN, together with 

these recommendations, will make it 

possible for child support agencies to enroll 

more children in private medical insurance, 

help avoid lapses in children’s health care 

coverage, and increase the efficiency and 

effectiveness of IV-D agencies’ medical 

support enforcement activities. 

#Recommendation 40 (Best Practice/Guidance/Technical 

Assistance/Notice Comments) 

Where the court determines that a pattern of misappropriation of insurance 

payments exists, the court may, at its discretion, order the insurer to pay all 

claims for reimbursement directly to the provider of services. This provision 

should be binding on all parties. 

#Recommendation 41 (Technical Assistance) 

The DOL and HHS should work with agencies that administer health plans for 

Federal workers and the military (OPM and DOD) to develop procedures that 

will recognize the Notice as a means to enroll children in their plans. (See 

Recommendation 42and Recommendation 43) 

#Recommendation 42 (Federal Legislation) 

Congress should enact legislation that would allow Federal agencies to 

enroll Federal employees and their dependents in the Federal Employees 

Health Benefits Program without the employee’s consent if the employee is 

ordered to provide such coverage for his or her dependent(s). 

#Recommendation 43 (Federal Legislation) 

Congress should enact legislation to allow the U.S. military to enroll its 

employees and their dependents in Tri-Care without the employee’s consent 

if the employee is ordered to provide such coverage for his or her 

dependents. 
CHAPTER 4

Medical Child Support Working Group Report Page 4-15 

Endnotes 

 

1

 Pub. L. 103-66 §4301(a), 107 Stat. 371 (1998), 

codified at 29 U.S.C. § 1169 (1999). 

2

 42 U.S.C. §466(a)(19)was amended in the 

following way – By Oct. 1, 2001 (or the next 

time the State legislature meets), all IV-D child 

support orders with a medical support 

component must be enforced, where appropriate, 

using the National Notice unless alternate 

coverage is allowed in the child support order. If 

the noncustodial parent is located through the 

New Hire directory, states must provide, where 

appropriate, the National Notice together with an 

income withholding notice in two days after the 

date of entry in the State New Hire directory. 

3

 Pub. L. 105-200, §401(b) (1998), codified at 42 

U.S.C. §651 note (1999). 

4

 29 U.S.C. §1169(a)(5)(C) (1999). 

5

 29 U.S.C. §1169(a)(5)(C)(ii)(1999). 

6

 29 U.S.C. §1169(a) (1999). 

7

 Title IV-D of the Social Security Act, 42 

U.S.C. §1396g-1 (1999), requires States to have 

laws under which employers and insurers must 

enroll a child in health coverage upon application 

by the custodial parent or IV-D agency when a 

court or administrative agency orders an obligor 

to provide health coverage for a child and the 

obligor is eligible for such coverage but fails to 

enroll the child. 

8

 42 U.S.C. §666(a)(19)(1998). 

9

 Similar concerns regarding uniformity led to 

the development of the current Order/Notice to 

Withhold Income for Child Support. Prior to 

1998, the form and content of notices and orders 

used by States to notify employers of the 

financial support obligations of noncustodial 

parents also varied widely. This lack of 

uniformity also led to confusion and unnecessary 

delays. The Personal Responsibility and Work 

Opportunity Reconciliation Act of 1996, among 

other things, requires States to transmit to 

employers (and other debtors) no later than 

October 1, 1998, orders and notices for income 

withholding using a uniform format prescribed 

by the Secretary of HHS. Following this 

directive, the Federal Office of Child Support 

Enforcement worked with State child support 

enforcement agencies and representatives from 

the American Payroll Association, the American 

Society of Payroll Management, and employers 

groups to develop the Order/Notice to Withhold 

Income for Child Support. In January 1998, this 

form was issued to the States, and currently is 

used as the prescribed format in processing child 

 

support wage attachments in the Child Support 

Enforcement Program. Use of this form by State 

agencies has greatly simplified the process of 

wage withholding. 

10 29 U.S.C. §1169(a) (5)(C) (1998). 

11 See, e.g. 42 U.S.C. 654(26)(B). 

12 29 U.S.C. §1169(a)(3)(A) (1999). 

13 CSPIA, §401(a)(5)(A)(i), 112 Stat. 660 

(1998). 

14 A significant part of the Working Group’s 

April 13, 1999, meeting was devoted to a 

discussion and preliminary assessment of the 

then current draft, which was provided to 

members of the Working Group. The Working 

Group concluded that the April draft Notice did 

not adequately address the needs and interests of 

all the parties who would be affected by it, and 

that members needed additional time to review 

and comment on subsequent drafts of the Notice, 

prior to its promulgation by regulation. Working 

Group members also expressed concern that 

employers and plan administrators would be 

required to comply with interim regulations 

immediately upon their publication in States that 

chose to implement the Notice before the 

mandatory implementation date, October 1, 

2001. The full Working Group considered a 

revised draft of a proposed Notice at its May 

1999 meeting. 

15 Section 1908 of the Social Security Act, 42 

U.S.C. §1396g-1 (1999). 

16 5 USC §8905 (1999). 

17 H.R. 2842, 106th Cong. 1st Sess. was 

introduced on September 13, 1999 and referred 

to the Committee on Government Reform. 

CHAPTER 5

Medical Child Support Working Group Report Page 5-1 

!CSPIA 

Child Support 

Performance and 

Incentive Act of 1998 

!CCPA 

Consumer Credit 

Protection Act 

CHAPTER 5. Answering

Hard Questions:

Providing Guidance to

IV-D Agencies and

Employers on

Enforcement Issues

Introduction

Child support enforcement agencies are 

required to enforce the medical support 

provisions of child support orders for all 

IV-D cases.1

 For a number of reasons, 

however, such enforcement has proven 

difficult. For example, the parents may live 

in different States, or neither parent may 

have access to medical coverage at the time 

the child support order is originally entered. 

When it passed CSPIA, Congress instructed 

the Working Group to examine some 

of the issues surrounding medical 

support enforcement, particularly those 

related to the Federal CCPA and the 

priority of withholding.2

 In its 

examination of these issues, the Working 

Group also discovered a number of other 

problems that needed to be addressed and 

has made recommendations to remedy these 

issues as well. These recommendations also 

reflect the need to address new enforcement 

issues that will arise once the Working 

Group’s recommendations regarding the 

establishment of orders have been 

implemented. 

!CHAPTER 5 AT A GLANCE

INTRODUCTION, 5-1 

ENFORCEMENT OF HEALTH CARE PROVISIONS OF CHILD SUPPORT ORDERS, 5-2 

Enforcing Orders to Provide Family Health Coverage, 5-2

Enforcement Issues in Interstate Child Support Cases, 5-3 

Monitoring and Enforcing Custodial Parent’s Responsibility, 5-4

CONSUMER CREDIT PROTECTION ACT (CCPA) LIMITS, 5-5 

Background, 5-5

Applicability, 5-6

Amount of CCPA Limits, 5-7

The Potential for Manipulating the CCPA Limits, 5-8

Health Care Coverage for the Child When the Withholding Limits are Breached, 5-8

PRIORITY OF WITHHOLDING, 5-9 

Theme

Because circumstances of families change, orders often seem out of date before their 

provisions are even put into place. Sometimes orders have to be changed, but often the 

issues can be solved by having reasonable and realistic enforcement rules that help IV-D 

agencies and employers apply the provisions of award over time even though individual 

fact patterns have changed. This chapter includes recommendations for two of the most 

difficult enforcement issues—the Consumer Credit Protection Act limitation on wage 

garnishment and the Priority of Withholding—as well as recommendations for other 

enforcement issues. 
CHAPTER 5

Page 5-2 Medical Child Support Working Group Report 

Enforcement of Health Care

Provisions of Child Support

Orders

Enforcing Orders to Provide 

Family Health Coverage 

The Working Group recommends that 

decision makers take a number of steps 

when ordering health coverage for children: 

(1) consider the private family health 

coverage that is available to both parents; 

(2) order the coverage that best meets the 

child’s needs; (3) allocate the costs of health 

care premiums between the parents; and (4) 

determine how deductibles, co-payments, 

and other uninsured health care costs will be 

shared between the parents. In cases where 

neither parent has access to reasonable 

private coverage, the Working Group’s 

decision matrix recommends that children 

should be enrolled in publicly-subsidized 

programs.3

These changes in policy—looking to the 

custodial parent for coverage and directing 

the family to publicly-subsidized programs 

where the “available” insurance is not 

accessible or affordable—will result in more 

custodial parents providing such coverage. 

It will also require decision makers to order 

noncustodial parents to make payments to 

offset the custodial parent’s provision of the 

coverage. Whether this amount is 

incorporated into the current child support 

obligation or delineated as an additional sum 

in the order, it is likely to be collected 

through income withholding.4

 The reasons 

for this include ease of administering the 

income withholding process, particularly 

with an increasingly automated child 

support enforcement system.5

The Working Group recognizes that there 

are additional problems that both IV-D 

agencies and the private bar struggle with 

while seeking to secure and enforce medical 

child support for all children. One issue is 

how to secure compliance from an 

individual who has no family health care 

coverage and who breaches an order for 

cash support entered either to cover the cost 

incurred by the other parent or to meet an 

obligation for unreimbursed medical 

expenses for the child. While no new 

remedies are proposed by the Working 

Group, it is anticipated that implementation 

of other recommendations in this Report will 

enable courts or administrative hearing 

“I’d like to see ... the effective 

administration of child support. No 

matter what administrative or courtordered kind of thing, they [the 

children] benefit no matter what the 

structure of their family is, no matter 

where the parents are or who the kid 

lives with. Our mission is to get 

coverage for kids.” 

~Rita Zeidner, Manger of Government 

Relations, American Payroll 

Association 

" See

CHAPTER 3,

The Decision

“Matrix” page

3-17.
CHAPTER 5

Medical Child Support Working Group Report Page 5-3 

!OBRA 

Omnibus Budget 

Reconciliation Act 

of 1993 

agencies to adjudicate contempt actions in a 

timely and effective manner. Similarly, the 

broad enforcement tools granted to IV-D 

agencies by PRWORA will allow for the 

expeditious collection of a child support 

debt created by breach of the medical 

support provisions of a child support order. 

In a similar vein, the Working Group 

recognizes that implementation of its 

guidelines recommendations, set out in 

CHAPTER 3, will be applied to requests by 

either party to modify an existing support 

order—including modifications requested 

primarily to add a medical support 

provision. States will have to incorporate 

these guidelines for medical support into 

laws and procedures related to the standard 

for modifying a support order (i.e., whether 

there must be a threshold dollar or 

percentage change in the cash support 

amount before a request for modification is 

granted); and, for IV-D agencies, how its 

statutory obligation to “review and adjust” 

child support orders is accomplished.6

Enforcement Issues in Interstate Child 

Support Cases 

In approximately 25 to 30 percent of all 

child support-eligible families, the 

noncustodial parent lives in a different State 

from the child.7

 Interstate child support 

cases are generally viewed as the most 

difficult child support cases to enforce, in 

part because of the difficulty of locating a 

noncustodial parent across State lines.8

 

While legal efforts have been made to 

simplify interstate child support case 

processing, notably with the Uniform 

Interstate Family Support Act (UIFSA), it is 

still safe to say that interstate case 

processing remains more complex than 

intrastate case processing. 

New Hire Reporting requires employers to 

provide basic wage information about their 

newly hired employees.9

 This information 

has proven vital in locating child support 

obligors and putting an income withholding 

order in place with the obligor’s new 

employer to obtain cash child support that is 

due. A number of States already use their 

New Hire Reporting procedures to obtain 

information regarding the availability of 

medical coverage. 

Congress convened the U.S. Commission on 

Interstate Child Support in 1988. The broad 

charge of the Commission was to submit a 

report to Congress with recommendations to 

improve the interstate establishment and 

enforcement of child support awards. In its 

final report to Congress, the Interstate 

Commission also made a number of 

recommendations to improve the 

enforcement of medical support orders. 

Congress adopted many of these medical 

support recommendations and included 

them in OBRA ’93.10
CHAPTER 5

Page 5-4 Medical Child Support Working Group Report 

!HCFA

Health Care

Financing

Administration

One relevant recommendation enacted in 

OBRA ’93 precludes insurers from denying 

enrollment of a child because the child does 

not reside in the insurer’s service area.11 

Despite the inclusion of this provision in 

Federal law, the Working Group learned that 

there are still many geographical barriers to 

children obtaining health coverage in both 

the interstate and intrastate contexts. In part, 

this problem may exist because some 

insurers and employers are confused about 

the scope of §1908 and do not know that 

they are subject to it.12 HCFA will issue 

regulations that will undoubtedly clarify the 

anti-discrimination provisions. 

The Working Group has made a number of 

recommendations to address geographic 

barriers to coverage. Geographic barriers 

can be particularly problematic for a family 

when only one parent has private family 

health coverage available and that coverage 

discriminates against a child because of 

geography. This situation effectively denies 

the child private health coverage, and 

unfairly forces the taxpayer to shoulder the 

burden of public coverage if the child is 

enrolled in Medicaid or SCHIP when, in 

fact, one of the parents has coverage 

available and should provide it. 

Monitoring and Enforcing 

Custodial Parent’s Responsibility 

If the Working Group’s recommendations 

are implemented, increasing numbers of 

custodial parents will be ordered to provide 

health care coverage to their children. 

Establishing the medical support obligation 

of the custodial parent will increase the 

potential for more children being covered by 

private health insurance, thereby lessening 

the Medicaid rolls and costs to the State and 

Federal taxpayers. If the custodial parents 

do not comply with medical support orders, 

the IV-D agency will have to enforce them. 

This raises both ethical and resource issues 

for the IV-D program. 

A threshold concern is the ethical problem, 

resulting from the IV-D agency’s need to 

enforce a medical support order against the 

custodial parent. The Working Group 

examined various States’ practices and 

determined that the vast majority of States 

do not consider the custodial parent to be 

their client. Statutes in these States 

expressly provide that the IV-D agency 

represents the interests of the State, rather 

than those of any individual parent or 

child.13 Since the State is interested in 

ensuring that children have health care 

coverage, the Working Group concluded 

that enforcing medical support orders 

against custodial parents would not create an 

unethical situation or conflict for IV-D child 

support attorneys, as long as custodial 

parents clearly understand that the agency 

represents the State, rather than the parent. 
CHAPTER 5

Medical Child Support Working Group Report Page 5-5 

However, the Working Group concluded 

that IV-D agencies need to make it 

absolutely clear to custodial parents that 

they might be ordered to provide their 

children’s health care coverage. Child 

support agencies should tell custodial 

parents that if they do not comply with an 

order to provide coverage, the State will 

enforce the order against them. 

The Working Group also considered the 

difficulty that a IV-D agency might 

encounter in enforcing a medical child 

support award against a custodial parent, 

when the reason that the parent was not 

providing coverage was that the 

noncustodial parent was not contributing to 

the cost of coverage as ordered. In that case, 

the Working group concluded that the State 

should not enforce the order against the 

custodial parent. States currently have to 

decide when and how to enforce child 

support orders,14 and we expect them to 

exercise this discretion. 

Moreover, the Working Group agreed that 

the child support agency should consider 

modifying an order if the child loses 

coverage because the ordered coverage is no 

longer available or because the noncustodial 

parent failed to pay the custodial parent the 

ordered portion of the premium. Until a 

new order is in place, the State should enroll 

the child in the Medicaid or SCHIP program 

if the child qualifies. #See 

Recommendation 44. 

Consumer Credit Protection Act

(CCPA)

15 Limits

Background 

The Federal CCPA limits the percentage of 

an obligor’s disposable income that may be 

withheld for child support purposes.16 

Under the CCPA, if the obligor supports 

only one family the maximum amount that 

may be withheld for child support purposes 

#Recommendation 44 (Federal Legislation) 

When the decision maker requires the custodial parent to provide coverage 

for the children, the parent should verify that the children have been enrolled 

within a reasonable time, to be determined by the State. When the child 

support enforcement agency provides enforcement services, and the 

children are not enrolled as ordered, the child support enforcement agency 

should take appropriate steps to enforce the order against the custodial 

parent. However, any notice that is sent to the parent should ask the 

custodial parent to contact the child support enforcement agency if she did 

not provide health care coverage because of some financial difficulty, a 

change in employment, other change in circumstances, and/or the 

noncustodial parent’s failure to comply with an order that required him/her to 

pay a portion of the premium. 
CHAPTER 5

Page 5-6 Medical Child Support Working Group Report 

is 60 percent of disposable income. If an 

obligor supports more than one family, the 

maximum amount that can be withheld is 50 

percent. Both of these amounts may be 

increased by five percent, to 65 percent and 

55 percent respectively, if the obligor’s child 

support payments are in arrears for at least 

twelve weeks.17

Applicability 

There is some confusion about when the 

lower withholding ceiling for parents who 

are supporting multiple families actually 

applies. Some states apply the lower (50 

percent/55 percent) limits only when the 

obligor is living with and contributing to the 

support of one of his families. Other states 

use the lower limits when the obligor is 

living alone but has obligations to more than 

one family. This can lead to inequities in 

interstate cases. 

The legislative history and case law 

pertaining to this provision of the CCPA 

suggest that Congress intended the lower 

CCPA limits to apply only when an obligor 

is living with a family that the obligor is 

helping to support. The CCPA was 

amended in 1977 to include the child 

support withholding limits. Remarks 

offered by Senator Nunn on the Senate floor 

when introducing the amendment, as well as 

language in the conference report of the bill 

that included the amendment, both suggest 

that the amendment was intended to protect 

“second families” from financial ruin. 

While there is very limited case law that 

makes reference to the child support 

withholding limits, what little there is 

generally assumes that the lower 

withholding limits apply to noncustodial 

parents who are supporting a second family 

in their own household. 

Therefore, the Working Group recommends 

that this interpretation be adopted nationally 

so that practice on this issue is uniform. 

Since the Department of Commerce has the 

authority to clarify this issue, the Working 

Group asks that the Secretaries of Labor and 

HHS request the Secretary of Commerce to 

issue such guidance. #See 

Recommendation 45.

#Recommendation 45 (Federal Regulation) 

The Secretaries of HHS and DOL should request the Department of 

Commerce to review the current provisions of the Consumer Credit 

Protection Act, which specifies limits on wage garnishment for family 

support payments, 15 U.S.C. §167(b)(2)(A) and (B). The Department should 

clarify whether the lower wage garnishment applies only to individuals who 

have an order to support a spouse or one or more children outside of their 

households and are also supporting a spouse and/or child within their 

household. 
CHAPTER 5

Medical Child Support Working Group Report Page 5-7 

Amount of CCPA Limits 

The Working Group recognized that under 

current child support guidelines some 

noncustodial parents pay a substantial 

percentage of their income in a combination 

of cash and medical support. Lower income 

noncustodial parents are left with too little 

income to live on. Even at higher income 

levels, parents who pay more than half of 

their income in child support may quit their 

jobs and/or enter the underground economy. 

Then the children receive neither cash 

support nor family health coverage. 

The CCPA sets the upper limits on the 

amount that can be withheld. States can set 

lower withholding limits and at least 18 

states have done so.18 Moreover, decision 

makers may use their discretion to set even 

lower limits in appropriate cases. For 

example, Washington State has established a 

withholding limit of 50 percent of 

disposable income. When the obligor owes 

both current and back support, the obligor 

can negotiate with the Support Enforcement 

Officer to collect less than 50 percent by 

lowering the amount collected on arrears if 

the 50 percent standard would leave the 

obligor with too little income for self 

support. In exchange for this break 

however, the Washington obligor has to 

waive the statute of limitations on 

arrearages. The result is that less will be 

collected each month but eventually 

everything will be paid off. #See 

Recommendation 46.

One way to address this problem is to reduce 

the number of cases in which a noncustodial 

parent is asked to provide private health care 

coverage that is very costly relative to the 

noncustodial parent’s income. The Working 

Group believes that its definition of 

“reasonable cost” will have this result 

and thereby reduce the number of cases 

in which excessive withholding is a 

problem. Nonetheless, even with this 

change, there will be cases when 

application of State or Federal wage 

withholding limits may result in excessive 

withholding—for example, when the parent 

has accumulated significant arrears or when 

the parent has multiple support obligations. 

For this reason, the Working Group 

considered whether Federal law should be 

amended to set lower limits. After careful 

#Recommendation 46 (Best Practice) 

The current Federal wage-withholding limits should be maintained, but the 

Federal OCSE should advise the States that they can set lower limits, as long 

as they are not so low that they make it impossible to order the parent to 

provide health care coverage, in addition to child support, when it is available 

at reasonable cost. 

# See 

Recommendation 9

through 

Recommendation 

11 in CHAPTER 3

for definition of

“reasonable cost.” 
CHAPTER 5

Page 5-8 Medical Child Support Working Group Report 

consideration, it was decided that the current 

statute should be maintained since it 

provides a ceiling on withholding while 

allowing States to set lower limits if they 

think this is appropriate. The Working 

Group noted that many States have done this 

and more might consider doing so if they 

were more aware of their options. 

Therefore, the Working Group recommends 

that OCSE remind States that they have this 

choice. However, the Working Group also 

suggests that States be advised that it would 

be inappropriate to set a level so low that 

noncustodial parents would rarely be 

contributing toward the cost of their 

children’s health care coverage. 

The Potential for Manipulating the 

CCPA Limits 

The CCPA limit is calculated on disposable 

income. Noncustodial parents can 

manipulate their disposable income in order 

to avoid paying the full amount of their cash 

and medical support obligations. To prevent 

this from occurring, the Working Group 

recommends that in any IV-D case where 

the withholding limits are reached, the 

agency should examine how the obligor’s 

disposable income was calculated to 

determine whether it is being manipulated to 

avoid meeting a child support obligation.19 

#See Recommendation 47.

Health Care Coverage for the 

Child When the Withholding 

Limits are Breached 

The Working Group has recommended a 

definition of “reasonable cost” that takes 

into account the premium required to obtain 

health care coverage relative to the income 

of the parent who is to provide that 

coverage. The Working Group has also 

recommended that when the cost of 

available coverage is not reasonable under 

that definition, the tribunal should order the 

custodial parent to enroll the children in 

Medicaid or SCHIP if they are eligible for 

either of those programs. The noncustodial 

parent might also be asked to help contribute 

toward the cost of Medicaid/SCHIP 

coverage. This ensures coverage for 

children within their parent’s ability to pay 

for such coverage. 

The Working Group believes that the 

#Recommendation 47 (Best Practice) 

In any case where the amount of the parent’s current child support payments 

exceeds Federal wage withholding limits, the decision maker should examine 

the calculation of the noncustodial parent’s disposable income to determine 

whether the parent is reducing their disposable income through excessive 

withholding or other reductions in gross income that are not contemplated 

by the Consumer Credit Protection Act (CCPA). 

# See 

Recommendation 9

through 

Recommendation 

11 in CHAPTER 3

for definition of

“reasonable cost.” 
CHAPTER 5

Medical Child Support Working Group Report Page 5-9 

rationale which led to these decisions would 

lead to a similar result when an employee’s 

child support obligation(s) exceed 

withholding limits. If the combination of 

cash and medical support that the obligor is 

required to pay would breach the 

withholding limits, then the medical child 

support obligation should be modified, the 

child should be moved to appropriate 

publicly-subsidized coverage, and a 

noncustodial parent contribution toward the 

cost of that coverage that can be met within 

the withholding limits should be established. 

#See Recommendation 48.

Priority of Withholding

A typical child support order includes three 

elements: (1) current support, (2) medical 

support, and (3) arrears. If the custodial 

parent is to provide health care coverage, 

the amount that the noncustodial parent will 

contribute to the cost of obtaining that 

coverage will be included in the amount 

designated as current support. In that case, 

the order will have one element (current 

support) or possibly two (if arrears are 

owed). If an employer receives a 

withholding order that requires the payment 

of a sum in excess of the withholding limits, 

the employer will withhold the maximum 

amount possible up to those limits and 

forward the money to the State 

Disbursement Unit (SDU) for disbursement. 

Under Federal law, the SDU must first pay 

current child support and medical support 

out of the amount withheld, then pay 

arrears.20

If the noncustodial parent is providing 

health care coverage, the situation is 

different. In that case, the order will 

designate a current cash support amount and 

arrears (if applicable) and require that sum 

to be sent to the SDU for disbursement. It 

will also order the employer to withhold the 

amount necessary to pay any premium 

associated with the children’s health care 

coverage. Most employers have plan benefit 

administrators who determine the employee 

contribution for the health care premium and 

forward the information to payroll 

managers, who then withhold the amounts 

from employee’s salaries. Both benefits are 

normally not withheld simultaneously by 

one entity. 

#Recommendation 48 (Best Practice) 

If the cost of providing private health care coverage increases a parent’s 

child support obligation so that the amount exceeds Federal wagewithholding limits, the decision maker should have the authority to direct the 

custodial parent to apply for the Medicaid or SCHIP. If the child is found 

eligible, the decision maker may require the noncustodial parent to 

contribute toward the cost of coverage consistent with Recommendation 19. 
CHAPTER 5

Page 5-10 Medical Child Support Working Group Report 

The health care administrator cannot know 

whether the employee’s cash and medical 

support obligations will exceed withholding 

limits. Even when the problem is identified, 

there is currently no uniform Federal 

guidance to employers about how to handle 

the situation. Employers and plan 

administrators would like direction about 

whether to give priority to cash support or to 

health care premiums. Such guidance would 

allow them to treat all of their employees 

equally and would also facilitate 

decisionmaking in interstate cases where 

there may be conflicting State laws. For this 

very reason, Congress asked the Working 

Group to examine the issue of priority of 

payment when an obligor lacks sufficient 

income to pay both the cash child support 

and medical support premiums without 

violating the withholding limits.21

In addressing this issue, the Working Group 

faced a fundamental dilemma: to give 

priority to cash support at the expense of a 

health care premium means that children 

could lose private health care coverage. But 

giving priority to health care premiums over 

cash support may mean that the children’s 

other basic needs, such as rent payments, 

cannot be met. Neither is a desirable 

outcome. 

One way to address this problem is to reduce 

the number of cases in which a noncustodial 

parent is asked to provide health care

coverage that is expensive relative to 

disposable income. The Working Group’s 

recommendation regarding “reasonable 

cost” should have this result and should help 

to reduce the number of cases in which this 

priority issue arises. 

Even with this change, however, there will 

be instances where the withholding limits 

would have to be breached in order to satisfy 

all of the ordered obligations. Employers 

and plan administrators will still need 

guidance about how to stay within the 

withholding limits, especially in a situation 

where an obligor has support orders for 

multiple families. In that situation, even if 

the individual orders are lower than the 

withholding limits, they may collectively 

breach those limits. 

To develop guidance in this area, the 

Working Group looked first at State 

practice. It found that while most States do 

not provide explicit guidance in their child 

support guidelines or State IV-D plans on 

how to handle this situation,22 a few States 

“[T]here should always be 

discretion to permit ... the custodial 

parent to indicate that they prefer 

some other priority order for the 

distribution of funds that are 

withheld.” 

~Cristina Firvida, Counsel, National

Women’s Law Center 
CHAPTER 5

Medical Child Support Working Group Report Page 5-11 

do. For example, in California, cash support 

is given first priority, payments toward 

family health coverage premiums are 

second.23 In New Jersey, when there is 

insufficient income to pay cash support and 

family health coverage premiums without 

eroding the obligor’s net income 

“reserves,”24 the State has specified that 

child support is paid first. 

The Working Group also examined this 

issue in light of the traditional primary 

mission of the child support enforcement 

program, which is to collect cash child 

support. Moreover, the custodial parent is 

the one who must meet the children’s 

immediate needs. Reducing or eliminating 

cash support by giving priority to health care 

premiums may make it impossible for the 

custodial parent to do so. Finally, while the 

children may lose private coverage if 

premiums are not paid, it may be possible 

for them to obtain public coverage through 

Medicaid, SCHIP, or some other program. 

Since these alternatives are increasingly 

available, cash support for other needs is 

primary. 

For all of these reasons, the Working Group 

recommends that when priority of payment 

becomes an issue, the general rule should be 

that cash support is withheld first, then 

private health care premiums, then arrears. 

Because the Working Group wanted to give 

flexibility to judges and administrative 

agencies in varying this priority of 

withholding when it would be in child’s best 

interest to do so—when for example, a child 

has such large medical costs that the value 

of the family health coverage premium 

outweighs any cash support the child might 

receive—the Working Group’s 

recommendation also allows a deviation 

from the general rule on a case-by-case basis 

regarding priority of payment. 

Finally, the Working Group wishes to 

emphasize that this recommendation applies 

to the situation in which the trade-off is 

between cash support, private health care 

premiums, and arrears. In cases where the 

issue is whether to pay cash support, 

noncustodial parent contribution toward 

#Recommendation 49 (Federal Regulation) 

A Federal policy on the priority of allocation by employers of funds collected 

through wage withholding should be promulgated. Employers should first 

attribute withheld funds to current cash support (alimony and child support), 

then to health care premiums and other current medical support, then to 

arrears (cash or medical) and then to other obligations. Decision makers 

should have the flexibility under State law to deviate on a case-by-case basis 

and provide that health care premiums will be paid first when that is in the 

best interest of the child. 
CHAPTER 5

Page 5-12 Medical Child Support Working Group Report 

Medicaid/SCHIP and arrears, priority should 

be given to current cash support and arrears 

owed to the family before any monies are 

used to pay noncustodial parent 

contributions toward publicly subsidized 

coverage. #See Recommendation 49.

In this chapter, we looked at the hard 

questions that face the child support 

enforcement agency and employers in 

enforcing medical support provisions in 

child support orders. Upon careful review 

of the many obstacles, the Working Group 

has recommended statutory, regulatory, and 

implementation practices to improve the 

health care coverage of America’s children. 

Endnotes 

 

1

 42 U.S.C. §652(f) (1999). 

2

 Pub. L. 105-200, Title IV, §401(a)(5), 112 Stat. 

659 (1998), codified at 42 U.S.C. §658a (note) 

(1999). 

3

 See Chapter 3. 

4

 See United States House of Representatives 

Committee of Ways and Means, “Green Book” 

(1998), 571. 

5

 The Interstate Commission noted the use of 

income withholding in the medical support 

context in its report “Blueprint for Reform” 

(1993), 140. 

6

 Pub. L. 100-485 (Family Support Act of 1998). 

7

See, for example, Lyon, Matthew. 

“Characteristics of Families Using Title IV-D 

Services in 1995.” U.S. Department of Health 

and Human Services, Office of the Assistant 

Secretary for Planning and Evaluation (May 

1999), 4; U.S. Commission on Interstate Child 

Support, “Supporting Our Children: A Blueprint 

for Reform,” xii; Wheaton, Laura. “Noncustodial 

Fathers: To What Extent do They Have Access 

to Health Care Coverage?” The Urban Institute 

(2000), 15. 

 

8

 The New Hire Reporting program should 

greatly improve locating noncustodial parents in 

the interstate context. 

9

 See Chapter 3. 

10 Pub. L. 103-66, Title IV, Subtitle D, §609(a) 

(1993), codified at 29 U.S.C. §1169 (1999). The 

Interstate Commission recommended, and 

Congress subsequently adopted in OBRA 93, a 

whole series of anti-discrimination provisions for 

insurers and employers, prohibiting them from 

failing to enroll dependents of employees 

because, for example, the child was born out of 

wedlock, not claimed as a dependent on the 

employee’s income tax return, or not residing 

with the employee or in the insurer’s service 

area. 

11 Section 1908(a) of the Social Security Act, 

codified at 42 U.S.C. §1396g (1999). 

12 For example, many insurers limit their 

provision of coverage within a city metropolitan 

area, beyond which, even if within the same 

State, a child would not be covered except under 

an “emergency exception.” 

13 A 1993 Child Support Enforcement analysis 

indicates that 26 states have provisions that make 

it clear that the agency represents the State, not 

the parent(s) in IV-D cases. (See memo 

provided to subcommittee members by Susan 

Notar. Staff updated this memo for the Working 

Group.) As a result of that update, it appears 

that, as of now, in thirty States, the IV-D agency 

represents only the State. OCSE Information 

Memorandum (OCSE-IM-93-03) on the role of 

attorneys in the IV-D child support agency is 

available from OCSE. 

14 Federal guidance makes it clear that States 

(not parents) decide when and how to enforce an 

order (45 CFR §303.6). This flexibility could 

certainly be used in deciding whether to enforce 

a medical support order against a custodial 

parent. 

15 Pub. L. 90-321; 82 Stat. 146 (1962), codified 

at 15 U.S.C. §1601 et seq. (1999). 16 15 U.S.C. §1673(b) (1999). 

17 Id. 18 Alaska, Arizona, California, Idaho. Iowa, 

Louisiana, Maine, Missouri, Nevada, New 

Mexico, North Dakota, Oklahoma, Texas, and 

Washington limit withholding to 50 percent of 

disposable income. South Dakota limits 

withholding to 50 percent of net income. 

Connecticut, New York, and Tennessee vary the 

limits with income and number of orders. 

19 Federal case law clearly provides that the 

CCPA limits do not apply to tax refunds. 
CHAPTER 5

Medical Child Support Working Group Report Page 5-13 

 

However, this does not prevent the custodial 

parent’s family from suffering hardship if 

monthly support payments are reduced because 

of excessive withholding by the noncustodial 

parent. 

20 42 U.S.C. §654, 657 and 45 C.F.R. 302.51 

(1999). 

21 42 U.S.C. §658a note (1999). The Federal 

Office of Child Support Enforcement has 

allowed States to set their own policy in this area 

as long as it was consistent with Federal law and 

policy. 

22 The States that do address the priority issue in 

their guidelines are: California, Missouri, New 

Jersey, and Washington. 

23 Except in the Sacramento County IV-D Kids 

program—when a child is placed on the IV-D 

Kids plan, family health coverage is paid first, 

then cash support. 

24 Defined as below 105 percent of the poverty 

line for one person after paying child support, or 

the custodial parent’s net income below 200 

percent of the poverty line for the number of 

persons in the primary household. 

CHAPTER 6

Medical Child Support Working Group Report Page 6-1 

CHAPTER 6. Moving

Towards Seamless

Coverage: Improving

Coordination and

Communication Among

Private and Public Health

Care Coverage

Private employment-related group plans 

provide health care coverage for a majority 

of America’s children, yet rarely is such 

coverage continuous. Frequent job changes 

make insurance coverage uncertain. Many 

parents are part-time or seasonal workers, 

who may have erratic coverage or difficulty 

in meeting eligibility requirements for 

employer-based coverage. Even when 

employment is stable, employers may 

change insurance plans. 

Where the noncustodial parent is obligated 

to provide private coverage, such changes 

often create more uncertainty. Often, 

neither the custodial parent nor the child 

support agency responsible for enforcing the 

order learn of the change in employment and 

the need to apply for new public or private 

coverage until after the child’s insurance has 

lapsed. And, if a child’s private health care 

!CHAPTER 6 AT A GLANCE

OUTREACH FOR MEDICAID AND THE STATE CHILDREN’S HEALTH INSURANCE 

PROGRAM, 6-3 

SCHIP BARRIERS, 6-4 

Crowd-Out Policies, 6-4

Access to Health Care Coverage, 6-6

SCHIP/MEDICAID/IV-D INFORMATION EXCHANGE, 6-8 

INCREASED EFFICIENCY IN THE COORDINATION OF PUBLIC AND PRIVATE

 COVERAGE, 6-12 

Automated Data Matches with Private Insurers, 6-13

Repeal Mandatory Pay and Chase, 6-14

ERISA ISSUES RELATED TO CHILDREN COVERED UNDER QMCSOS, 6-17 

HIPAA and COBRA, 6-17

Circumstances Under Which Group Health Plans May Impose Preexisting Condition

Exclusions, 6-21

Coordination of ERISA Medical Child Support Provisions with Social Security Act 

Medical Child Support Provisions, 6-22

Theme

Under the current system it is very easy for children to have periods in which no health 

care coverage is available. The extent to which this happens could be decreased by 

building feedback loops into the information flow between IV-D agencies and the public 

health care providers, Medicaid and SCHIP. Additionally, IV-D, Medicaid, and SCHIP 

agencies need to be working from a common understanding when obtaining private or 

public health care coverage or both are in the best interest of the child. IV-D should work 

with Medicaid and SCHIP, as well as with private insurers, to assure that the child is 

enrolled in appropriate health care coverage. 
CHAPTER 6

Page 6-2 Medical Child Support Working Group Report 

!SCHIP

State Child Health

Insurance Program

coverage lapses, they are likely to be 

uninsured for several months, as they may 

be subject to waiting periods before they are 

eligible for new coverage through the 

employer or through an SCHIP. 

Furthermore, replacement coverage may not 

pay to treat pre-existing conditions. 

Similarly, as the child’s private insurance 

status or family income changes, their 

eligibility for SCHIP or Medicaid may 

change. Children who do not successfully 

transition to private or public insurance 

when the changes occur will be uninsured or 

underinsured. 

Recognizing that children need seamless 

health care coverage, Congress charged the 

Working Group to report on “appropriate 

procedures for coordinating the provision, 

enforcement, and transition of health care 

coverage under the State programs operated 

pursuant to part D of Title IV of the Social 

Security Act and titles XIX and XXI of such 

Act.”1

 Early on, the Working Group 

realized that Medicaid and SCHIP need to 

be included in the medical child support 

decision matrix, along with private 

insurance, in order to maximize a child’s 

access to quality health care coverage. 

Coordination among these programs and 

with private insurers is essential. 

A significant number of children who 

receive IV-D child support services qualify 

for Medicaid and SCHIP coverage. State 

officials are working with Federal agencies 

to reach as many potentially eligible, 

uninsured children as possible through 

amendments to State Plans. IV-D agencies 

can and should play a major role in these 

efforts. Adequate planning, coordination, 

and collaboration between IV-D, Medicaid, 

SCHIP and other appropriate public and 

private agencies are essential to ensure that 

every child who is eligible for child support 

services has comprehensive health care 

coverage. 

Public agencies, such as IV-D, Medicaid and 

SCHIP and private employers and insurers 

must coordinate their efforts in order to 

secure the best possible coverage for 

children and to minimize disruptions in 

coverage when children move between 

private coverage and public coverage. 

“[W]e were all somewhat taken aback 

by and very concerned ... that there 

does not seem, at the current time, to 

be a good interface between Medicaid, 

CHIP, and IV-D and that many of the 

problems that we've identified really 

go to that lack of interface.” 

~Sallie H. Hunt, Commissioner, 

Bureau of Child Support 

Enforcement, HHR, West Virginia 

# See 

description of The 

National Child 

Support 

Enforcement 

(IV-D) Program, 

page 1-6. 
CHAPTER 6

Medical Child Support Working Group Report Page 6-3 

Outreach for Medicaid and the

State Children’s Health Insurance

Program

In order to ensure that the maximum 

possible number of children has continuous 

health care coverage, it is important to enroll 

children in appropriate coverage as quickly 

as possible. Children who do not have 

reasonable access to appropriate private 

coverage should be enrolled in public 

coverage if eligible. 

The Working Group believes that linking 

child support programs with Medicaid and 

SCHIP could make it possible to reach more 

eligible families. Indeed, a letter from 

OCSE’s Deputy Commissioner to State 

IV-D Directors makes this very point. IV-D 

agencies “have immediate access to 

necessary information regarding the 

children’s health coverage and the parents’ 

income, employment, and other financial 

information. The agencies could provide an 

invaluable service by identifying potentially 

eligible recipients and making SCHIP 

information and applications available to 

them.” Some State IV-D programs are 

already trying to inform working parents 

about the Medicaid and SCHIP programs. 

Child support agencies can identify eligible 

uninsured children and streamline 

enrollment in the SCHIP and Medicaid 

programs.2

 The Working Group believes 

that IV-D agencies should be added to the 

list of qualified agencies permitted to make 

presumptive Medicaid eligibility 

determinations for children, and 

recommends that the Medicaid statute be 

amended accordingly.3

 This could expedite 

enrollment of eligible children in the 

Medicaid and SCHIP programs. Once the 

child support agency determines that private 

coverage is not an option, the IV-D agency 

could use the income information it has 

gathered to calculate the amount of cash 

support under the guidelines and make a 

preliminary determination that the child is 

Medicaid or SCHIP eligible, if the State has 

chosen to provide presumptive coverage for 

children under Medicaid or SCHIP. The 

child could then be enrolled as 

presumptively eligible and coverage could 

begin immediately. While Congress should 

not require States to use their IV-D 

programs to determine a child’s presumptive 

eligibility for Medicaid or SCHIP, they 

should be strongly encouraged to do so. If 

they choose not to, states should adopt other 

methods to facilitate enrollment in the 

Medicaid and SCHIP programs. See 

Recommendation 17 and Recommendation 

18, CHAPTER 3. 

One of the barriers to enrollment in 

Medicaid and SCHIP is the burdensome 

application and enrollment process. Some 

States have applications over 20 pages long, 
CHAPTER 6

Page 6-4 Medical Child Support Working Group Report 

!HCFA

Health Care

Financing

Administration

posing an often insurmountable challenge 

for families. 

A key to successfully reaching and enrolling 

uninsured children in SCHIP and Medicaid 

is a simple application and enrollment 

process. Federal requirements for 

application and enrollment in Medicaid and 

SCHIP provide broad flexibility to States in 

designing their applications and developing 

their enrollment process. Many States have 

simplified the complicated application forms 

and enrollment processes, as well as 

allocated more resources to outreach 

activities. Currently, States are trying to 

encourage enrollment through such methods 

as creating joint SCHIP/Medicaid 

applications, reducing and simplifying the 

application forms, providing mail-in 

applications, and developing a follow-up 

process for families who do not complete 

the application. 

HCFA has developed a model joint 

application for SCHIP/Medicaid for children 

(see APPENDIX H: Model Joint 

Medicaid/SCHIP Application Form, page 

A-59).4

 States can allow individuals to use 

this form to apply for both programs and the 

information can be sufficient for 

determining which program a child is 

eligible for. The simplified form asks only 

for necessary information and allows for 

application by mail. The Working Group 

supports HCFA’s efforts to streamline and 

simplify the application process, and 

encourages all States to adopt a joint 

Medicaid/SCHIP application. #See 

Recommendation 50.

SCHIP Barriers

SCHIP does not always offer an adequate 

safety net for all child support-eligible 

children. There are specific eligibility 

criteria in Title XXI that create barriers to 

obtaining continuous coverage for children. 

These barriers include SCHIP crowd-out 

policies and denial of SCHIP eligibility 

based on access to private coverage. 

Crowd-Out Policies 

While most children5 who have private 

health care coverage also can be eligible for 

Medicaid, children with other coverage are 

generally not eligible for SCHIP. Whenever 

a State implements Title XXI through a 

Medicaid expansion, the Medicaid program 

rules apply and children may be enrolled in 

private health care coverage as well as in the 

Medicaid expansion program. On the other 

hand, when a State implements Title XXI 

#Recommendation 50 (Federal Guidance) 

HCFA should continue to encourage joint Medicaid/SCHIP applications to 

streamline the application process. 
CHAPTER 6

Medical Child Support Working Group Report Page 6-5 

through a separate SCHIP, different rules 

apply, which are sometimes problematic. 

One of the fundamental principles of Title 

XXI is that SCHIP coverage should not 

supplant existing public or private coverage 

(commonly referred to as “crowd-out”). 

Title XXI contains provisions specifically 

designed to ensure that States use SCHIP 

funds to provide coverage only to uninsured 

children. Specifically, Title XXI requires 

States to ensure that coverage provided 

under SCHIP does not substitute for 

coverage under either private group health 

plans or Medicaid. 

According to HCFA, the potential for 

crowd-out exists because SCHIP coverage 

costs less and provides better coverage than 

coverage purchased by some individuals and 

employers. Specifically, employers who 

make contributions to coverage for 

dependents of lower-wage employees could 

potentially save money if they reduce or 

eliminate their contributions for such 

coverage and encourage their employees to 

enroll their children in SCHIP. At the same 

time, families that make significant 

contributions towards dependent group 

health coverage could have an incentive to 

drop that coverage and enroll their children 

in SCHIP if the benefits would be 

comparable or better and their out-of-pocket 

costs would be reduced. 

In cases where insurance coverage is 

provided directly through SCHIP or 

Medicaid, States are required to establish 

reasonable procedures to ensure that 

coverage provided under the SCHIP plan 

does not substitute for coverage under group 

health plans. In cases where SCHIP funds 

are used to subsidize coverage provided 

through employer-sponsored group health 

plans, States are required to implement 

specific precautions, including imposing a 

waiting period. Many States impose a 

waiting period that ranges from 3 to 12 

months, with certain exceptions. An 

otherwise SCHIP-eligible child who has just 

lost private coverage must wait until the end 

of this waiting period before he may enroll 

in SCHIP coverage. 

The waiting period can be particularly 

troublesome when the child’s health 

insurance is to be provided or paid for by a 

noncustodial parent who often may live far 

away from the child, may not have good 

patterns of communication with the 

custodial parent, may have limited income, 

and may have a history of frequent and 

sudden job change. While many of these 

problems affect both intact and non-intact 

families, in families with a noncustodial 

parent they are exacerbated by potential lack 

of communication between the custodial and 

noncustodial parent. The custodial parent 

may not even know of the noncustodial 
CHAPTER 6

Page 6-6 Medical Child Support Working Group Report 

parent’s oft-changing employment status, 

and therefore be unaware of when the 

children have coverage and when they do 

not. 

Children may also lose private coverage 

when the custodial parent is providing 

coverage and the noncustodial parent is 

ordered to contribute toward the cost of the 

coverage, but fails to do so. The custodial 

parent may have no control over the loss of 

private coverage and in these cases there is 

no deliberate effort to move the child from 

private coverage to the SCHIP program. 

The Working Group believes that the 

waiting period does not serve a valid public 

policy purpose here and therefore ought not 

to be imposed in such cases. 

HCFA has already issued proposed SCHIP 

regulations that would explicitly allow 

exceptions to the minimum waiting period if 

the prior coverage was involuntarily 

terminated by the employer in a State that 

has a policy of subsidizing employersponsored group health plans.6

 Many States 

already provide exceptions to the 

requirement that the child be uninsured for a 

certain period of time. For example, 

Connecticut, Iowa, Kentucky, New 

Hampshire, and North Carolina have 

developed a broad range of exceptions to 

their waiting period in order to 

accommodate involuntary termination of 

private coverage. 

Because of the unique situation of child 

support-eligible children, the Working 

Group recommends that every State exempt 

children who lose health care coverage 

pursuant to a medical support order from the 

requirement that children be uninsured for a 

certain period of time before becoming 

eligible for SCHIP. The Working Group 

anticipates that HCFA will address the issue 

of crowd-out in the SCHIP final rule. 

#See Recommendation 51.

Access to Health Care Coverage 

The Working Group was particularly 

concerned about the problems created when 

the decision maker orders a child to be 

placed in health care coverage that is not 

geographically accessible to the child. 

Recognizing the futility of enrolling a child 

#Recommendation 51 (Federal Guidance) 

HCFA should provide guidance to States to make children who lose health 

care coverage pursuant to a medical support order an exception to the SCHIP 

“crowd out” provision by eliminating the waiting period for these children. In 

particular, guidance would include eliminating the waiting period when the 

custodial parent loses court- or agency-ordered dependent health coverage 

due to the noncustodial parent’s failure to comply with an obligation to 

reimburse the custodial parent for the premiums. 
CHAPTER 6

Medical Child Support Working Group Report Page 6-7 

in such coverage, some parents ignore this 

aspect of the order. In other cases, the 

obligated parent follows the order and 

enrolls the child, making the child ineligible 

to participate in SCHIP, although, for all 

practical purposes the child is uninsured.7

Implementing the Working Group’s 

recommendation on the definition of 

“accessible” should prevent this from 

happening in the future (see 

Recommendation 8, page 3-10). However, a 

substantial number of existing orders will 

continue to create problems for children who 

need SCHIP coverage. The Working Group 

believes HCFA should address this problem 

by making it clear to states that a child who 

is enrolled in inaccessible coverage should 

be categorized as “uninsured” for SCHIP 

purposes. We note that a discussion of this 

issue, consistent with this recommendation, 

is included in the preamble to the proposed 

SCHIP regulations.8

 #See 

Recommendation 52.

In addition, Title XXI allows States the 

option to preclude enrollment in SCHIP to 

an otherwise SCHIP-eligible child whenever 

that child has access to other creditable 

health insurance but is not enrolled in that 

coverage. A few States have elected this 

option. For example, in Michigan children 

that have employer-sponsored coverage 

available will not be enrolled in the State’s 

CHIP. This restriction creates another 

barrier to obtaining stable, continuous 

coverage for children, particularly if parents 

themselves are cycling on and off employersponsored insurance due to employment 

patterns, making it difficult to determine if 

and when private coverage is available to 

the child, and preventing the possibility of 

continuous private or public coverage for the 

child. To facilitate the enrollment of 

children in the most appropriate coverage 

(that is, accessible, comprehensive, and 

#Recommendation 52 (Federal Regulation) 

HCFA should issue SCHIP regulations that allow a child to be eligible for 

SCHIP if the child is enrolled in a group health plan but does not have 

reasonable access to care under that plan. 

“[T]he CHIP program in our State 

[Alabama] also has a comprehensive 

package for these kids, and I guess my 

concern is that children who have 

other coverage, from a noncustodial 

parent or whomever, are excluded 

from CHIP, yet the plan that's causing 

them to be excluded doesn't provide a 

lot of the care that they need.” 

~Kay Keeshan, Director, Third Party 

Liability Division, Alabama Medicaid 

Agency 
CHAPTER 6

Page 6-8 Medical Child Support Working Group Report 

affordable coverage, as defined in 

Recommendation 8), the Working Group 

recommends that HCFA encourage States to 

allow IV-D eligible children to enroll in 

SCHIP when private coverage is available 

yet not appropriate and they are otherwise 

eligible for SCHIP. #See 

Recommendation 53.

SCHIP/Medicaid/IV-D Information

Exchange

In order to remove significant barriers to 

medical support enforcement, States must 

develop efficient and effective mechanisms 

for communication and coordination among 

the IV-D, Medicaid, SCHIP and other 

programs that provide health care coverage 

for low income children. This will improve 

the child’s chance of being promptly 

enrolled in appropriate health care coverage 

with minimal or no delays or disruptions. 

Clearly, the enrollment of IV-D children in 

public rather than private health care 

coverage raises many complex 

organizational and procedural concerns. 

That is why the Working Group 

recommends that HHS convene an 

interdisciplinary task force that represents 

all of the State and Federal agencies 

involved in medical support, as well as other 

appropriate stakeholders. This task force 

would identify issues that need to be 

addressed in order to effectively implement 

the Working Group's recommendations 

concerning the enrollment of IV-D children 

in public insurance, and propose solutions to 

the identified problems. 

While the Working Group was not in a 

position to identify all of the potential issues 

that might need to be addressed, it did 

identify three areas that the HHS task force 

should address. 

❶ Notification Systems

First, the task force should explore ways in 

which the public programs would benefit 

from the development of a notification 

system or a standardized notice to transmit 

information between the courts, the IV-D 

program, and the Medicaid and SCHIP 

agencies. Its possible purposes include: 

♦ Enabling the decision maker to notify 

the child support enforcement agency 

#Recommendation 53 (Federal Guidance) 

HCFA should provide guidance to States that IV-D-eligible children are also 

eligible to participate in SCHIP if private health care coverage is available to 

them but they are not enrolled in such coverage because the services 

available through that coverage are not appropriate—that is, they are not 

accessible, comprehensive, or affordable as those terms are defined in 

Recommendation 8. 
CHAPTER 6

Medical Child Support Working Group Report Page 6-9 

that public coverage has been ordered 

and whether the noncustodial parent has 

been ordered to contribute to the cost of 

such coverage. 

♦ Making it possible for the child support 

enforcement agency to inform the 

Medicaid or SCHIP agency that a 

decision maker has ordered that the 

children be enrolled in publicly financed 

health care programs and, if applicable, 

order the parent(s) to contribute to the 

cost of such coverage. 

♦ Making it possible for the Medicaid or 

SCHIP agency to inform the child 

support enforcement agency that a child 

has not been enrolled as ordered, or that 

a custodial parent has removed the child 

from the program or has failed to pay 

any applicable premiums. 

♦ Enabling the courts and agencies to 

notify one another when a change has 

occurred. Such changes might include 

moving the child from Medicaid to 

SCHIP or vice versa, enrolling the child 

in private coverage, cessation of the 

child’s eligibility for Medicaid/SCHIP 

coverage, and termination of the State 

child support enforcement agency’s 

responsibility to enforce the order. 

❷ Standardized System

Second, the Working Group suggests that 

the task force should consider whether each 

State should create a child 

support/Medicaid/SCHIP database to 

facilitate a standardized system for 

exchanging information. 

SCHIP and Medicaid programs should be 

able to determine whether applicants or 

beneficiaries are enrolled in private health 

coverage that is enforced through the child 

support enforcement program. Child 

support enforcement agencies should, 

similarly, be able to determine immediately 

whether children who are receiving IV-D 

services are receiving or have applied for 

Medicaid or SCHIP. 

Several members of the Working Group met 

with an Automation Focus Group, 

comprised of experts from the systems staffs 

of several States and OCSE. The 

Automation Focus Group thought that the 

modifications necessary to enable automated 

data exchanges between IV-D, SCHIP, and 

Medicaid would be complicated, costly, and 

time consuming. Therefore, this idea 

requires the careful study and consideration 

of the proposed HHS task force. 

❸ Administrative Simplification

The task force should recommend further 

ways to improve the ease with which the 

child support enforcement system, 

Medicaid, and SCHIP interact and share 

information as needed. #See 

Recommendation 54.

This task force should also work with the 

Courts regarding enrollment of child 

support-eligible children in Medicaid and 

SCHIP (see Recommendation 26, page 3-

34). 
CHAPTER 6

Page 6-10 Medical Child Support Working Group Report 

While coordination between Medicaid and 

IV-D agencies can and must be deepened, 

these two agencies do have an evolving 

history of communication, especially around 

the issues of cooperation and third party 

liability. The cooperation requirement 

placed on Medicaid applicants requires them 

to cooperate with efforts to establish 

paternity and pursue medical support in 

order to secure Medicaid coverage for 

themselves.9

 In previous recommendations, 

the Working Group has sought to refocus 

and enhance this partnership in the interest 

of those children who benefit, or could 

benefit, from both programs. 

However, SCHIP and IV-D agencies do not 

have the same linkages. Because SCHIP 

programs not financed through Medicaid 

expansion funds are not available to insured 

children, there is no cause for any third party 

liability action. There is no federallymandated cooperation requirement for 

SCHIP applicants. 

The Working Group discussed and rejected 

the option of adding a child support 

cooperation requirement to the SCHIP 

program. Members considered whether a 

cooperation requirement for separate SCHIP 

programs would help integrate IV-D and 

SCHIP. Health care program staff and 

children’s advocates shared the concern that 

existing cooperation requirements 

discourage custodial parents from enrolling 

their children in Medicaid. They suggested 

that putting such a requirement in SCHIP 

would, similarly, counteract efforts to 

expand SCHIP coverage to vulnerable 

children. The Working Group also noted 

that, although HCFA permits States to 

impose a State-based child support 

#Recommendation 54 (Administrative Action) 

The Secretary of HHS should convene a Working Group to develop protocols 

for implementing the recommendations concerning the enrollment of IV-D 

children in public rather than private health care coverage, particularly in 

interstate cases. This group should be comprised of staff from OCSE, HCFA, 

the Office of the Secretary, State Child Support, Medicaid, and SCHIP 

agencies as well representatives of other appropriate agencies and the 

courts. 

Among the tasks of this Working Group should be: (1) determining the 

feasibility and advisability of developing and mandating the use of a standard 

notification system to transmit information between the State courts, child 

support enforcement agencies, and Medicaid and SCHIP agencies; (2) 

assessing the feasibility of each State creating a IV-D/Medicaid/SCHIP 

database to facilitate a standardized system for information exchange; and 

(3) exploring the possibility of administrative simplification between the IV-D, 

Medicaid, and SCHIP programs.
CHAPTER 6

Medical Child Support Working Group Report Page 6-11 

cooperation requirement on families that 

participate in their separate SCHIP 

programs, at least one State (Virginia) has 

selected this option.10 For all of these 

reasons, the Working Group concluded that 

there were strong policy reasons for not 

creating a Federal child support cooperation 

requirement in the SCHIP program. 

However, the Working Group did see much 

value, and need, in encouraging 

IV-D/SCHIP coordination. Enhanced 

communication will assist in ensuring that 

children have continuous coverage. Possible 

areas for information sharing include but are 

not limited to insurance and other SCHIP 

eligibility status issues (such as loss of 

private coverage, newly available employerbased coverage which the SCHIP program 

or the noncustodial parent may wish to pay 

the premium for, or loss of income). 

In particular, if Recommendation 19 is 

enacted, noncustodial parents may be 

required to pay a portion of their child’s 

SCHIP expenses, while the custodial parent 

pays the SCHIP premium (see page 3-28). 

If the custodial parent is unable to make the 

premium payment, the IV-D agency may be 

able to assist in notifying the noncustodial 

parent so that he or she has the option of 

picking up the premium and continuing the 

child’s coverage. In addition, if the 

custodial parent moves the child off SCHIP, 

perhaps because of failure to pay the 

premium, the SCHIP agency must notify the 

IV-D agency so that the noncustodial parent 

is not obligated to continue to contribute to 

the cost of coverage that the child no longer 

has. 

The Working Group encourages SCHIP and 

IV-D agencies to develop strong 

relationships and clear avenues of 

communication in order to ensure that 

children have every chance at getting and 

maintaining suitable coverage, with the 

support of both parents as appropriate. 

#See Recommendation 55.

Although many uninsured children in the 

IV-D caseload are eligible for SCHIP or 

Medicaid, many are not. Even if all of these 

barriers to SCHIP enrollment are eliminated, 

SCHIP and Medicaid will not be able to 

provide coverage for all of the uninsured 

children who are eligible for child support 

services. This is because IV-D services are 

available to every child who is eligible for 

child support, without regard to the amount 

#Recommendation 55 (Best Practice) 

State child support enforcement and SCHIP agencies should establish 

effective ways of communicating with each other.
CHAPTER 6

Page 6-12 Medical Child Support Working Group Report 

!NMSN

National Medical

Support Notice

of the family’s income or the value of the 

custodial parent’s assets, while Medicaid 

and SCHIP are available only to families of 

limited means.11

Increased Efficiency in the

Coordination of Public and Private

Coverage

Members of the Working Group believe that 

children should be enrolled in private 

coverage, whenever this is appropriate, but 

realize that parents’ situations are fluid. A 

parent who does not initially have access to 

private health care coverage through his job 

may later change jobs, and become eligible 

for such coverage. Likewise, a parent who 

has access to group health care coverage 

may become ineligible for family coverage. 

The State child support enforcement agency 

may learn of this change from a parent or 

through New Hire Reporting. However, the 

child support agency may not act on this 

information until one of the parents requests 

a triennial review of the support order. 

Lengthy delays are not in the best interest of 

the child or the public. When the child 

support enforcement agency learns that the 

parent of a child enrolled in Medicaid or 

SCHIP is eligible for affordable, accessible 

and comprehensive private insurance, it 

should move that child to the private 

coverage as soon as possible, in order to 

conserve public funds. 

To make sure this happens as quickly as 

possible, State IV-D agencies should 

develop protocols for making inquiries when 

they receive information about potential 

private coverage. When the noncustodial 

#Recommendation 56 (Best Practice) 

In IV-D cases, when coverage is provided through Medicaid or SCHIP and 

information provided by the parties or obtained through New Hire Reporting 

indicates that private dependent health care coverage may now be available, 

it should be determined whether that coverage is appropriate for the child (as 

defined in Recommendation 8). If private dependent health care coverage is 

available and appropriate, the order should be modified as needed and a 

National Medical Support Notice should be sent to the employer and the child 

should be enrolled. 

“Massachusetts' law required that 

health insurance carriers doing 

business in the State provide us the 

information. We just amended our law 

last week to include employers, 

because our Medicaid program now is 

moving in a direction of working more 

with employers, and we wanted to 

obtain employer information and that 

recently passed.” 

~Mary Fontaine, Director, Third 

Party Division, Benefit Coordination 

and Recoveries, Medicaid, 

Massachusetts 

" See

CHAPTER 8.
CHAPTER 6

Medical Child Support Working Group Report Page 6-13 

parent is currently obligated to cover the 

child, the child support agency should issue 

the new NMSN to enroll the child right 

away. If the order does not include such an 

obligation, a modification should be sought 

and then enforced accordingly. #See 

Recommendation 56.

Automated Data Matches with 

Private Insurers 

State IV-D agencies must be able to make 

timely and accurate determinations 

regarding the sources of family health 

coverage actually and potentially available 

to parents. The recent development of the 

proposed NMSN will help make this 

possible. When implemented, States will 

use this Notice to identify health coverage 

available to children, through their 

noncustodial parent’s employment-related 

health plans. The Notice will also serve as 

an order to enroll eligible children in the 

coverage. It will facilitate coordination and 

communication between State IV-D 

agencies, parents, employers, and group 

health plan administrators, and may make it 

possible to automate the process. 

States should take additional steps to 

identify private health coverage that is 

actually or potentially available to children. 

Some State Medicaid agencies conduct 

automated data matches between their 

Medicaid eligibility files and lists of 

participants in private insurance plans. This 

permits states to identify Medicaid 

beneficiaries who have private coverage 

which should pay before Medicaid. 

Information on noncustodial parents is 

sometimes matched against the insurer’s 

files, to identify sources of family health 

coverage for dependents. 

For example, Massachusetts’s law gives the 

Medicaid agency authority to conduct data 

matches with insurance companies doing 

business in the State.12 The law grants 

Medicaid subrogation rights and allows 

Medicaid to identify family health coverage 

for Medicaid beneficiaries, including 

insurance available through noncustodial 

parents. 

Massachusetts has data exchange 

agreements with every health maintenance 

organization (5) and at least 25 insurance 

carriers doing business in the State. At least 

once a month, Massachusetts matches 

Medicaid and noncustodial parent files 

against the insurance data base of 

policyholders and beneficiaries. No 

information on health claims or diagnosis is 

provided. 

The match helps the Massachusetts 

Medicaid agency identify noncustodial 

parents who have already enrolled their 

dependents in family health coverage. The 

information also helps identify noncustodial 
CHAPTER 6

Page 6-14 Medical Child Support Working Group Report 

parents who have family health coverage, 

but have not enrolled their children. In such 

cases, the Medicaid agency determines 

whether a medical support order has been 

established. If an appropriate order is in 

place, the Medicaid agency contacts the 

employer to obtain additional information. 

If there is no order, the Medicaid agency 

submits a survey to determine if the child 

has health care coverage. Once the child is 

enrolled in private health care coverage, 

Medicaid becomes the payer of last resort. 

The primary family health coverage pays 

first, while Medicaid picks up all copayments, deductibles, and services not 

covered by the insurance. 

Texas recently passed a law providing for 

similar computer data matches.13 It will be 

beneficial to track the implementation of 

these laws, in order to identify best 

practices. 

Title IV-D agencies and OCSE should 

monitor, evaluate and report on current 

initiatives, where states have developed 

medical insurance data bases and carry out 

automated matches with other sources of 

information about private coverage. 

Medicaid agencies that maintain these 

databases should share the information with 

the IV-D agency. If some states have 

obtained successful results through these 

matches, OCSE should hold them up as a 

best practice. #See Recommendation 57.

Repeal Mandatory Pay and Chase 

As stated earlier, children who are enrolled 

in private insurance may also be enrolled in 

Medicaid, if eligible. When this occurs, 

Medicaid is always the payer of last resort. 

Medicaid agencies generally do not pay 

medical claims when another third party is 

legally liable for payment. When a third 

party is liable, Medicaid returns the claim to 

the provider with instructions to bill the 

third party. This is referred to as “cost 

avoidance.” There are some exceptions to 

this rule. For instance, Medicaid agencies 

are required to pay claims for covered 

services and seek reimbursement from liable 

third parties whenever health coverage is 

provided by a noncustodial parent. 

#Recommendation 57 (Technical Assistance) 

State IV-D agencies, as well as the Federal OCSE, should monitor, evaluate, and 

report on current State initiatives related to the development of State databases 

and computer matches with other sources of information about private 

coverage. Where States have developed these matches, it is essential that the 

matched information be shared with the IV-D agency. If certain States have 

obtained successful results through these matches, Child Support 

Enforcement should hold them up as a best practice. (See Recommendation 5.) 
CHAPTER 6

Medical Child Support Working Group Report Page 6-15 

!OBRA’93

Omnibus Budget

Reconciliation Act of

1993

Congress imposed this requirement 

primarily to protect mothers and their 

dependent children from having to pursue 

noncustodial parents, employers, or insurers 

for payment of medical care and services. 

Insurance carriers of noncustodial parents 

would often refuse to deal directly with the 

custodial parent. They would only accept 

claims that were filed by the policyholder 

(i.e., noncustodial parent) and would only 

send reimbursement checks to the 

policyholder, who often refused to 

reimburse the appropriate party. 

This left Medicaid with the responsibility of 

trying to recover its cost from the 

policyholder. This was costly for Medicaid 

agencies, since it was expensive to pursue 

reimbursement and they were often unable 

to recover funds from liable third parties. A 

Medicaid agency which could save $50 

million in cost avoidance might only net $27 

million by paying claims and seeking 

reimbursement. When Medicaid is unable 

to recover its cost from a liable third party, it 

circumvents coordination efforts between 

Medicaid and IV-D by having noncustodial 

parents pay for health insurance that is not 

utilized. 

Section 1908 of the Social Security Act (as 

amended by OBRA 93) provided the relief 

needed to ensure that payments are made 

directly to providers, custodial parents, or 

States. Specifically, §1908 requires insurers 

to accept claims from the custodial parent 

(or provider, with the custodial parent’s 

approval) for covered services, without the 

approval of the policyholder (i.e., 

noncustodial parent) and to make payment 

accordingly. The Working Group 

recommended that Congress amend §1908 

to explicitly state that the laws it requires 

States to pass apply to all children, not only 

those who are Medicaid-eligible (see 

Recommendation 63). Based on the §1908 

requirements and this recommended 

legislative change, the Working Group 

discussed the merits of repealing the 

mandatory pay and chase requirements. 

There was concern that allowing Medicaid 

to cost avoid claims could result in the 

provider billing the custodial parent for cost 

sharing amounts imposed by the 

noncustodial parent’s health plan. The 

Working Group learned that 

§1902(a)(25)(C)14 of the Social Security Act 

prohibits providers from charging Medicaid 

beneficiaries (disregarding §1916).15 In 

addition, §1902(g) authorizes States to 

impose a sanction on any provider who 

seeks to collect payment from a Medicaid 

beneficiary of up to three times the amount 

of payment sought. Given these protections, 

the Working Group agreed that State 

Medicaid agencies should be allowed to cost 

avoid claims given the understanding that 

custodial parents of Medicaid eligible 
CHAPTER 6

Page 6-16 Medical Child Support Working Group Report 

children are informed that providers are not 

allowed to charge them other than what is 

provided for in 1916. It is essential that this 

change be supported by technical assistance 

and education for health care providers so 

they do not erroneously bill the custodial 

parent, and to insurers so they do not 

incorrectly send the payment to the 

policyholder instead of the provider. 

Some Working Group members expressed 

concern that eliminating the pay and chase 

requirement could result in a provider not 

being paid if a child receives services 

outside the private plan because those within 

the plan are not geographically accessible. 

It was noted that if Recommendation 8 is 

adopted (see page 3-10), the decision maker 

will determine whether available health 

coverage is geographically accessible before 

establishing an order. This would minimize 

the risk that children are enrolled in 

inaccessible coverage. In addition, the 

Medicaid representatives indicated that 

providers are generally assured that 

Medicaid will pay for covered services 

whenever a third party does not make 

payment. Individuals located in a region 

which is outside the service area so that they 

cannot reasonably avail themselves of 

services are not generally considered to have 

a third party resource available to them, 

therefore, Medicaid would pay. 

For these reasons, the Working Group 

recommends repeal of the mandatory pay 

and chase requirement whenever health 

coverage is provided by a noncustodial 

parent. Of course, Medicaid would still be 

the payer of last resort. #See 

Recommendation 58.

Another way of reaching this goal may be to 

look at amending the last clause of 

§1902(a)(2)(F) so that is reads “...if payment 

has not been made by such third party within 

30 days after the provider of such services 

has sought to recover payment from such 

third party;” instead of “...if payment has 

not been made by such third party within 30 

days after such services are furnished;”. 

However, without full legal review by HHS 

to determine the statutory implications and 

the potential unintended consequences of 

such a change, it is difficult to determine 

what the best solution would be. 

Building on the previous discussion, the 

Working Group considered another 

#Recommendation 58 (Federal Legislation) 

Congress should repeal §1902(a)(25)(F) of the Social Security Act to allow 

State Medicaid agencies to cost-avoid claims where the third party coverage 

is derived through a noncustodial parent’s obligation to provide medical 

coverage. 
CHAPTER 6

Medical Child Support Working Group Report Page 6-17 

!ERISA 

Employee Retirement 

Income Security Act 

of 1974 

exception to cost avoidance. Section 

1902(a)(25)(E) of the Social Security Act 

requires State Medicaid agencies to pay 

claims and seek reimbursement from liable 

third parties for services related to prenatal 

or preventive pediatric care, including early 

and periodic screening and diagnostic 

services provided under 1905(a)(4)(B). 

This law was passed because Congress was 

concerned that the administrative burdens 

associated with third party liability 

collection efforts might discourage 

physicians and other providers of preventive 

pediatric and prenatal care from 

participating in the Medicaid program, since 

beneficiaries who need these services often 

have difficulty finding quality providers in 

many communities. Therefore, this law was 

intended to require States to pay providers 

and then pursue payment from liable third 

parties for prenatal and preventive pediatric 

services. 

The Working Group decided not to 

recommend repeal of this provision since it 

applies very broadly to non-medical support 

children. 

ERISA Issues Related to Children

Covered Under QMCSOs

The Working Group learned of a number of 

technical barriers to seamless health care 

coverage for children in the area of ERISA. 

Those issues are discussed in the following 

sections. 

HIPAA and COBRA 

The Working Group considered two 

recommendations intended to clarify how 

COBRA applies to children enrolled in a 

group health plan pursuant to a QMCSO. 

The first related to the term “qualified 

beneficiary.” Although this term is defined 

to include a beneficiary under a group health 

plan who is covered under the plan as a 

dependent of a covered employee, it is not 

explicit whether a child enrolled pursuant to 

a QMCSO would be considered a qualified 

beneficiary. 

The proposed recommendation requests 

clarification that a child covered pursuant to 

a QMCSO would be considered a qualified 

beneficiary. Members of the Working 

Group expressed the view that many plan 

administrators already treat children enrolled 

#Recommendation 59 (Federal Guidance) 

DOL and HHS should request the IRS to confirm that a child enrolled in a 

plan pursuant to a QMCSO would be considered a “dependent child” for 

purposes of the COBRA provisions, and therefore would be considered a 

“qualified beneficiary.” In the event that such a child would not be 

considered a “qualified beneficiary,” COBRA should be amended to provide 

that such children are qualified beneficiaries. 
CHAPTER 6

Page 6-18 Medical Child Support Working Group Report 

pursuant to QMCSOs as qualified 

beneficiaries, but agreed that specific 

guidance would be helpful to plans, their 

sponsors and administrators, as well as 

participants and their beneficiaries, in 

determining their respective rights and 

obligations. #See Recommendation 59.

The second proposed COBRA-related 

recommendation relates to the term 

“qualifying event.” If a child covered 

pursuant to a QMCSO is considered a 

qualified beneficiary, the child will have a 

right to elect to continue coverage following 

the occurrence of a qualifying event (such as 

termination of the covered employee’s 

employment). Therefore, with respect to 

these qualifying events, a child who was 

enrolled pursuant to a QMCSO would be 

treated similarly to any dependent child of a 

covered employee. 

However, such a child could lose coverage 

due to the occurrence of certain events that 

$ ERISA16 background related to COBRA17 and HIPAA18

ERISA has been amended several times to expand the protections available to 

participants and beneficiaries of group health plans. The Consolidated Omnibus 

Budget and Reconciliation Act of 1985 (COBRA) contains provisions that permit 

certain individuals to continue group health coverage that otherwise would be lost 

under certain circumstances.19 COBRA’s provisions amended ERISA, the Internal 

Revenue Code and the Public Health Service Act. The Health Insurance Portability 

and Accountability Act of 1996 (HIPAA) added protections for individuals who 

have preexisting conditions or who might otherwise suffer discrimination in health 

coverage based on factors that relate to an individual’s health. HIPAA’s provisions 

also amended ERISA, the Internal Revenue Code, and the Public Health Service Act. 

COBRA requires group health plans to provide certain covered individuals (called 

“qualified beneficiaries”)20 an opportunity to elect to continue group health coverage 

at their own expense for specified periods of time (up to 18 or 36 months).21 This 

opportunity arises when coverage would otherwise be lost due to the occurrence of 

an event (called a “qualifying event") specified in COBRA. The COBRA provisions 

specifically define the terms “qualified beneficiary”22 and “qualifying event.”23

HIPAA places a time limit, up to either 12 or 18 months, on the application of 

preexisting condition exclusions to newly-enrolled individuals.24 A preexisting 

condition is a condition for which medical advice, diagnosis, care, or treatment was 

recommended or received within six months prior to enrollment. The 12 or 18 

month time limit must be reduced by crediting certain periods of prior health 

coverage.25 HIPAA also prohibits group health plans from applying any preexisting 

condition exclusions against certain newly-enrolled newborns26 and adopted 

children.27 HIPAA additionally requires that group health plans provide special 

enrollment opportunities for certain newborns and adopted children who become 

“new” dependents, and for individuals and their dependents who have lost other 

coverage due to certain events.28 The provisions of HIPAA do not expressly apply 

to a child enrolled pursuant to a QMCSO. 
CHAPTER 6

Medical Child Support Working Group Report Page 6-19 

!HIPAA 

Health Insurance 

Portability and 

Accountability Act of 

1996 

" See

CCPA limits

discussion in

CHAPTER 5,

starting on page

5-5.

are not experienced by other dependent 

children. For example, limitations on 

involuntary withholding from an employee’s 

wages can prevent the payment of the 

employee’s share of any premiums 

necessary to maintain the child’s coverage. 

Furthermore, the child will lose coverage, 

when the period covered by the QMCSO 

expires. It is not clear which, if any, of 

these would be considered an ERISA 

“qualifying event.” The second proposed 

recommendation would have requested 

clarification that the loss of such coverage at 

any time during the period covered by a 

QMCSO, or at the expiration of the period 

covered by a QMCSO, would be considered 

a qualifying event. 

The Working Group agreed that a loss of 

coverage due to the expiration of the term 

covered by a QMCSO might constitute a 

qualifying event, and found that guidance on 

this issue should be requested. Coverage 

could be lost at any time during the term 

covered by a QMCSO, if required employee 

contributions were not paid. An employee 

might refuse to contribute, or wagewithholding limitations might prevent the 

employer from withholding necessary 

amounts from an employee’s wages. 

Making these a qualifying event for children 

covered under QMCSOs would provide 

those children with greater rights than 

similarly situated dependents living in a 

covered employee’s household, since lapses 

due to non payment are not deemed ERISA 

“qualifying events.” 

However, the Working Group noted that 

nonpayment of premiums due to the 

application of withholding limitations would 

apply uniquely to QMCSO-related coverage. 

Nevertheless, the Working Group found that 

implementing such a definition would be 

burdensome for plan administrators, who 

would have to determine why premiums 

were not paid. Accordingly, the Working 

Group adopted the second recommendation 

only insofar as it would relate to the loss of 

coverage at the expiration of the period 

covered by a QMCSO. 

Under HIPAA, group health plans and 

family health coverage issuers offering 

group family health coverage are 

required to offer “special enrollment 

periods” during which certain individuals 

may enroll in the plan regardless of any 

open season restrictions or waiting periods 

under certain circumstances. There are two 

types of special enrollment periods which 

plans must offer: (1) special enrollment 

periods for individuals losing other 

coverage, and (2) special enrollment periods 

for certain new dependents.29

If an individual is eligible to enroll in a 

group health plan but declines enrollment 

because other coverage has been selected, 
CHAPTER 6

Page 6-20 Medical Child Support Working Group Report 

the individual must be permitted to enroll in 

the plan if that individual becomes ineligible 

for the other coverage, under certain 

circumstances. In order to qualify for this 

special enrollment period, the individual or 

dependent losing other coverage must 

request coverage under the new plan within 

30 days of losing the prior coverage.30 For 

example, consider a husband and wife who 

are eligible for enrollment under the 

husband’s employer’s group health plan, but 

decline enrollment because they are enrolled 

in the wife’s employer’s plan. If the wife 

terminates her employment, becoming 

ineligible for coverage under her employer’s 

plan, the family must be permitted to enroll 

in the husband’s employer’s group health 

plan, as long as the family timely requests 

enrollment and satisfies certain other 

conditions. The couple does not qualify for 

this special enrollment period, unless 

coverage was terminated because the family 

became ineligible, because of an event such 

as death, divorce, termination of 

employment or employer contributions, or 

reduction of hours.31 Loss of other coverage 

due to nonpayment of any required 

employee contribution does not give rise to 

a special enrollment right in a new plan. 

A child who is covered pursuant to a 

QMCSO can lose coverage under the 

obligated parent’s plan under circumstances 

that would not apply to other dependents. If 

the effective period for the order expires, the 

plan is no longer obliged to provide 

coverage. The special enrollment provisions 

described above do not address the issue of 

whether a child who loses coverage because 

a medical support order has expired would 

be entitled to special enrollment right in any 

other plan. Accordingly, the Working 

Group recommends that HHS and DOL 

request guidance from the appropriate 

Federal agencies as to whether a child who 

loses coverage because a QMCSO expires 

would be entitled to a special enrollment 

right in another plan. If an individual who is 

enrolled in a group health plan acquires a 

new dependent through marriage, birth, 

adoption, or placement for adoption, under 

certain circumstances the new dependent 

(and the spouse in the case of birth or 

adoption) are entitled to a special enrollment 

period.32 During this period they must be 

permitted to enroll in the plan without 

regard to open season restrictions or waiting 

periods otherwise imposed by the plan. In 

order for this special enrollment right to 

apply, the plan must offer coverage to 

dependents, and a request for enrollment 

under the plan must be timely made. For 

example, consider a husband and wife who 

are eligible for enrollment in the group 

health plan maintained by the husband’s 

employer, the wife voluntarily declines 

coverage. Later the wife gives birth to a 

child. The mother and child are entitled to a 
CHAPTER 6

Medical Child Support Working Group Report Page 6-21 

special enrollment period under the 

husband’s employer’s plan provided that the 

plan provides dependent coverage and a 

timely request for coverage is made.33 

Circumstances Under Which 

Group Health Plans May Impose 

Preexisting Condition Exclusions 

Plans cannot apply these exclusions to 

newborns or adopted children. HIPAA 

provides that if a child is enrolled in 

creditable coverage (certain types of 

coverage are considered HIPAA 

“creditable” coverage) within 30 days of 

birth, adoption or placement for adoption, 

group health plans may not impose 

preexisting condition exclusions against the 

newborn or adopted child.34 In the case of 

adopted children, §609(c) of ERISA 

provides additional protections from these 

exclusions. Under 609(c), if a child is 

adopted or placed for adoption while a 

participant is eligible for coverage under a 

plan, the plan may not impose a preexisting 

condition exclusion against the child once 

the child is enrolled. The plan is prohibited 

from imposing such an exclusion regardless 

of the timing of the enrollment.35

The Working Group discussed the 

#Recommendation 60 (Federal Guidance/Federal Legislation) 

DOL and HHS should request the IRS to provide interpretive guidance 

regarding whether the expiration of the period covered by the Qualified 

Medical Child Support Order is a COBRA qualifying event in ERISA §603(5) (a 

dependent child ceasing to be a dependent child under the generally 

applicable requirements of the plan). This interpretation would make it 

possible for the child support enforcement agency or custodial parent to 

elect COBRA continuation coverage to prevent a child from losing coverage 

for these reasons. If the current statute does not permit this interpretation, 

we recommend that Congress amend §603(5). 

#Recommendation 61 (Federal Regulation) 

The DOL should issue regulation(s) that make it clear that ERISA 

§701(f)(1)(C)(ii) (special enrollment for individuals losing other coverage) 

permits a child to be specially enrolled in a new plan, after prior coverage 

obtained through a Qualified Medical Child Support Order (QMCSO) is 

terminated, if the coverage ends during the period covered by the order or at 

the end of the period covered by the order. This would permit a child to 

enroll in other available coverage provided by either parent, if coverage is 

terminated for some reason related to the medical support order. 

#Recommendation 62 (Federal Legislation) 

Congress should amend ERISA §701(f)(2)(A)(iii) to include children enrolled 

pursuant to a QMCSO among the categories of dependents who, if certain 

other requirements are met, must be given special enrollment rights. 
CHAPTER 6

Page 6-22 Medical Child Support Working Group Report 

possibility of extending similar protections 

from preexisting condition exclusions to 

children covered pursuant to QMCSOs as 

well as children who lose coverage because 

a QMCSO expires. Ultimately the Working 

Group was unable to reach consensus on 

these issues. Some members felt that 

prohibiting such exclusions could leave 

plans vulnerable to adverse selection, 

because parents could wait until children 

were sick before seeking or enforcing a 

QMCSO. The Group also struggled with the 

fact that HIPAA’s protections apply only 

where enrollment of the child is within a 

specific time frame. The QMCSO process 

makes it difficult to identify a corresponding 

enrollment period for QMCSO children. 

The Working Group agreed that it was 

important to note that current law permits 

plans to apply preexisting condition 

exclusions of up to 12 or 18 months against 

children covered pursuant to QMCSOs. 

These exclusions make it difficult for these 

children to obtain seamless coverage 

through their parents’ group health plans. 

#See Recommendation 60, 

Recommendation 61, Recommendation 62.

Coordination of ERISA Medical 

Child Support Provisions with 

Social Security Act Medical Child 

Support Provisions 

Section 1908 of the Social Security Act36

requires states to have specific laws that 

would make it easier for children to obtain 

family health coverage under their 

noncustodial parent’s health plans. These 

laws primarily impact children, noncustodial 

parents, and insurers, such as group health 

care plans and employers. While some 

provisions of §1908 pertain to parents who 

are obligated by a court or administrative 

order to provide medical support to their 

children, other provisions do not 

contemplate the existence of an order. 

Some provisions of §1908 are unclear, so 

states have adopted various interpretations. 

For instance, §1908 does not clearly define 

the scope of its applicability. Since §1908 

was placed in Title XIX of the Social 

Security Act, which governs the Medicaid 

program, it can be construed as requiring 

that State laws enacted pursuant to §1908 

need only apply to children who are 

receiving or eligible for Medicaid benefits. 

While most states apply the laws required by 

§1908 to all children, some states limit the 

applicability of those laws to Medicaid 

children. 

It is reasonable to conclude that Congress 

intended the State laws required by §1908 to 

apply to all children. The introductory 

language in §1908, by its own terms, casts 

§1908 as “medical child support” law. The 

statute does not specify Medicaid children, 

but refers to the laws as they apply to “a 

child.” The specific language speaks of 

laws that impose limitations or prohibitions 
CHAPTER 6

Medical Child Support Working Group Report Page 6-23 

on insurers and employers. In addition to 

the plain language of the statute, 

considerations of insurance and health plan 

administration support this interpretation. If 

the State laws applied only to Medicaid 

children, insurers and employers would be 

faced with the burden of determining 

whether a particular child, who may live in 

another State, is eligible for or receiving 

Medicaid. #See Recommendation 63.

Section 1908 requires states to enact laws 

that prohibit employers from terminating the 

coverage of a child who was enrolled in its 

group health plan pursuant to a court or 

administrative order unless, among other 

things, the employer eliminates family 

health coverage for all of its employees.37 

This could require the plan to maintain 

coverage of a child who was covered 

pursuant to a court order, although the 

employee’s other children’s coverage was 

terminated, because the parent did not pay 

required employee contributions. Similarly, 

if the employer terminates all group health 

plans for employees and dependents within a 

particular unit, such as a separate division or 

work site, §1908 seems to require the 

employer to continue to provide coverage to 

any child who was enrolled pursuant to an 

order, although the employee’s other 

children and children of other similarlysituated employees would lose coverage. It 

is reasonable to conclude that Congress 

wanted plan administrators to treat children 

enrolled pursuant to orders in the same 

manner as other children of similarly 

situated parents, but did not intend to give 

those children greater rights to coverage 

than other similarly situated children. 

Section 1908 also includes some provisions 

#Recommendation 63 (Federal Legislation) 

Provided that Congress makes the following changes to §1908 of the Social 

Security Act (42 U.S.C. §1396g-1), Congress should also amend §1908 to state 

explicitly that the laws it requires States to pass as a condition of participation 

in the Medicaid program apply to all children (regardless of whether they are 

eligible for assistance under the State Medicaid plan), and should amend §609 

of ERISA to incorporate the requirements of the amended §1908. The 

necessary changes are: 

♦ Clarify that a child who is in enrolled in a group health plan pursuant to a 

court or administrative order could be disenrolled under circumstances 

under which other dependent children would lose coverage (for example, 

elimination of family health coverage for all employees in the same 

business unit or job category). 

♦ Amend §1908(a)(1) to provide that, if there is no QMCSO, a child would be 

enrolled only if the participant enrolls or consents to the enrollment of the 

child. 
CHAPTER 6

Page 6-24 Medical Child Support Working Group Report 

that require states to impose requirements on 

insurers, even absent a court order. Section 

1908 defines “insurer” to include a group 

health plan, as defined in §607(1) of ERISA. 

At the time §1908 was enacted, Congress 

also amended §514 of ERISA to lift ERISA 

preemption of State laws required by §1908 

to the extent they apply to a QMCSO. 

Currently, State laws may be preempted 

with respect to a group health plan’s 

obligation in the absence of a QMCSO. 

Inconsistency between ERISA and §1908 

may cause health plans to treat a child of a 

noncustodial parent who is not under a court 

order but wishes to enroll his child in his 

group health plan, differently from a parent 

whose child is enrolled pursuant to a court 

order. If two noncustodial parents work for 

the same employer, both with a child living 

in the same area, and one is ordered to 

provide health care coverage, while the 

other not, the noncustodial parent who is 

subject to an order might be able to enroll 

her child, while the other could not. ERISA 

should be amended to eliminate this 

disparate treatment. 

Section 1908 does not define “family health 

coverage.” An employer can offer a plan 

that covers the employee’s dependents, 

without covering the employee. If such 

plans are not considered “family health 

coverage,” children may not gain access to 

available coverage. #See 

Recommendation 64. 

#Recommendation 64 (Federal Regulation) 

The term “family health coverage” should be defined in regulations and 

guidelines to include health coverage that provides benefits to dependents, 

including a dependent-only policy. 
CHAPTER 6

Medical Child Support Working Group Report Page 6-25 

Endnotes 

 

1

 Pub. L. 105-200, §401(a)(5)(iii), 112 Stat. 660 

(1998). 

2

 Child support agencies must determine whether 

children whose families are receiving services 

have health care coverage and have access to the 

financial information needed to determine 

whether the family qualifies for Medicaid or 

SCHIP. 

3

 See, 42 U.S.C. §1396r-1a(b)((3) (1999). The 

Balanced Budget Act includes a provision that 

permits a “qualified entity” to determine a 

child’s eligibility for Medicaid for a 

“presumptive eligibility period” based on 

preliminary information that the family income 

does not exceed the State’s Medicaid income 

eligibility level. The presumptive eligibility 

period is the remainder of the month in which 

presumptive eligibility is determined plus the 

next month, about 29 to 62 days, and ends when 

the Medicaid agency determines “regular” 

eligibility. Qualified entities now include 

Medicaid providers, as well as agencies which 

determine eligibility for the Head Start, Child 

Care and Development Block Grant, and WIC 

programs. SCHIP does not similarly limit the 

entities that could determine presumptive 

eligibility. 

4

 This model application can also be found at 

http://www.hcfa.gov/init/chpelig.htm 5

 The Balanced Budget Act of 1997 added a new 

optional Medicaid eligibility group that consists 

of children who by definition do not have health 

insurance. If the State uses this group to expand 

Medicaid, the children cannot have other 

insurance. However, if the State expands 

Medicaid by expanding another eligibility group 

in some way (such as putting a higher income 

level on a poverty-level-related group), then the 

State is required to cover the children whether or 

not they have insurance. 

6

 Federal Register, Volume 64, No. 215, 

November 8, 1999. 

7

 42 U.S.C. §1397aa (1999). 

8 Federal Register, Volume 64, No. 215 on 

November 8, 1999. 

9

 The cooperation requirement only applies to 

coverage for the mother. If she does not 

cooperate, the children may not be denied 

Medicaid coverage as a result. 

10 Virginia’s SCHIP State Plan is located at: 

http://www.cns.state.va.us/dmas/images/PDF/sta

tepln.pdf

11 42 U.S.C. §1397bb (1999). 

 

12 Mass. Ann. Laws ch. 118E, §9A (1999). 

13 Senate Bill 1248, 76th Legislature, effective 

September 1, 1999. 

14 Section 1902(a)(25) requires that a State plan 

for medical assistance provide “that in the case 

of an individual who is entitled to medical 

assistance under the State plan with respect to a 

service for which a third party is liable for 

payment, the person furnishing the service may 

not seek to collect from the individual (or any 

financially responsible relative or representative 

of that individual) payment of an amount for that 

service (i) if the total of the amount of the 

liabilities of third parties for that service is a least 

equal to the amount payable for that service 

under the plan (disregarding section 1916), or (ii) 

in an amount which exceeds the lesser of (I) the 

amount which may be collected under section 

1916, or (II) the amount by which the amount 

payable for that service under the plan 

(disregarding section 1912) exceeds the total of 

the amount of the liabilities of third parties for 

that service.” 

15 Section 1916 allows States to impose nominal 

cost-sharing amounts on Medicaid beneficiaries 

in specific situations. The statute does, however, 

prohibit the imposition of cost sharing for 

services for individuals under age 18 (with the 

State’s option of raising the age limit to 21). 

16 Employee Retirement Income Security Act, 

which appears generally as 29 U.S.C. §1001 et 

seq. (1999). 17 The Consolidated Omnibus Budget and 

Reconciliation Act of 1985, Pub. L. 99-272, 

codified in various sections of the U.S. Code. 

18 The Health Insurance Portability and 

Accountability Act of 1996, Pub. L. 104-191, 

110 Stat. 1936, codified in various sections of 

the U.S. Code. 

19 29 U.S.C. §1167(3) et seq. (1999). 20 29 U.S.C. §1161. 

21 29 U.S.C. §§1161-62. 

22 29 U.S.C. §1167(3) (1999). 

23 29 U.S.C. §1163 (1999). 

24 29 U.S.C. §1181 (1999). 

25 29 U.S.C. §1181(c) (1999). 

26 29 U.S.C. §1181(d)(1) (1999). 

27 29 U.S.C. §1181(d)(2) (1999). 

28 29 U.S.C. §1181(f) (1999). 

29 29 U.S.C. §1181(f) (1999). 

30 29 U.S.C. §1181(f) (1999). 

31 29 U.S.C. §1181(f)(1)(C) (1999). 

32 29 U.S.C. §1181(f)(2) (1999). 

33 29 U.S.C. §1181(f)(2)(A)(iii) (1999). “...in 

the case of the birth or adoption of the child, the 
CHAPTER 6

Page 6-26 Medical Child Support Working Group Report 

 

spouse of the individual may be enrolled as a 

dependent of the individual, if the spouse is 

otherwise eligible for coverage.” 

34 29 U.S.C. §1169(c) (1999). 

35 29 U.S.C. §1181(d)(4) (1999). 

36 42 U.S.C. §1396g-1(a)(3)(C) (1999). 

37 42 U.S.C. §1396g-1(a)(3)(C) (1999). 
CHAPTER 7

Medical Child Support Working Group Report Page 7-1 

CHAPTER 7. The

Question of Money:

Paying for the Expanded

Role of the IV-D Program

in Obtaining Health Care

Coverage for Children

Introduction

Historically, child support enforcement was 

a private matter, financed by parents and 

governed by State law. State and local 

governments became involved only if a 

child needed public assistance. For almost 

the past fifty years, however, there has been 

increasing Federal involvement in both the 

structure and the funding of child support 

activities.1

An examination of the historic funding of 

the child support enforcement program 

established in Part D of Title IV of the 

Social Security Act (IV-D) reveals that 

Congress has continually adapted program 

funding to encourage activities which it 

believes are important to program 

improvement. 

The IV-D program benefits from a generous 

Federal funding formula. In fiscal year 

1997, the Federal government paid over $2.3 

billion to States for the operation of child 

support enforcement programs. State and 

local governments appropriated an 

additional $1.1 billion.2

 The Federal 

contribution is essential to the success of the 

child support program. Federal funds defray 

a majority of the costs of State child support 

agencies, and are instrumental in 

determining the agencies’ functions and 

directing the priorities of the program. 

!CHAPTER 7 AT A GLANCE

INTRODUCTION, 7-1 

CURRENT IV-D FUNDING STRUCTURE, 7-3 

POLICY ISSUES RELATED TO IV-D FUNDING, 7-4 

Enhanced Federal Financial Participation (FFP), 7-5

Medical Support Performance Incentive Measure, 7-6

Cross-Program Funding, 7-10

Theme

To improve the establishment, implementation, and enforcement of medical child support, 

the Working Group has made recommendations that will considerably enhance the 

responsibilities of child support enforcement agencies. IV-D agencies may need to 

undertake significant restructuring in order to incorporate new options, and new tools, into 

their core functions. Without sufficient resources, the Working Group's recommendations 

cannot be implemented and many of the identified barriers to medical child support 

enforcement will remain. This chapter lays out a Federal funding scheme to support, and 

ultimately reward, successful implementation of these recommendations by IV-D 

agencies. 

# See 

box, “History of 

Federal Funding 

of the IV-D 

Program,” page 7-

2. 
CHAPTER 7

Page 7-2 Medical Child Support Working Group Report 

$ History of Federal Funding of the IV-D Program 

In 1950, without providing funding, Congress required welfare agencies to inform 

appropriate law enforcement officials when AFDC was furnished to a child who had been 

abandoned by a parent. The rationale was to encourage law enforcement officials to take 

action, including the filing of non-support proceedings against those who had abandoned 

their children.3

In 1967, recognizing that its earlier efforts had met with limited success and that many 

families became dependent on welfare because they could not obtain child support, 

Congress required states to set up a single State organizational unit to take responsibility for 

establishing paternity and obtaining child support for deserted children who receive AFDC. 

Federal funding at a 50% Federal Financial Participation (FFP) matching rate was made 

available for this important purpose.4

In 1975, recognizing that better child support enforcement might reduce the need for 

families to resort to welfare, Congress added Title IV, Part D, to the Social Security Act. 

Rather than expanding upon the requirements already contained in Title IVA, Congress 

chose to create a separate program. This change emphasized a major break with the past: 

the new program was to serve non-AFDC families as well as those receiving AFDC. 

Moreover, the Federal government substantially increased its funding for child support 

activities. FFP at a 75% rate was made available for serving both AFDC and non-AFDC 

cases.5 This legislation also provided states with “incentive payments” when they made 

cash collections in AFDC cases: the State could retain 25% of the amount collected for a 

family for the first 12 months of collection and 10% of the amount collected thereafter.6

In 1980, the FFP rate was altered in several significant respects. To encourage the states to 

automate their child support systems, the FFP matching rate for automation activities was 

raised from 75% to 90%. At the same time, in order to have the states pick up a greater 

share of basic program costs, FFP was reduced from 75% to 70% effective October 1, 1982. 

The incentive payment formula was also changed. States were given a flat 15% of all 

AFDC collections as an incentive.7

In 1984, the funding changed again. FFP for basic program functions was reduced, over a 

three year period, from 70% to 66% where it remains today. To encourage automation 

efforts, however, FFP at the 90% level remained available and hardware costs were made 

reimbursable at this higher rate. A new incentive payment structure was also put in place. 

This structure rewarded states for making collections in non-AFDC as well as AFDC 

cases.8

In 1988, to emphasize the growing importance of establishing paternity, Congress provided 

90 percent FFP for the laboratory costs associated with determining paternity.9

In 1998, Congress again changed the incentive payment system. Incentive funding was now 

to be based on the performance of States in key areas. This was a significant step away 

from a compliance-based system to performance. Incentive payments are now provided for 

establishing paternity, establishing support orders, collecting current support, collecting 

arrears and cost-effectiveness.10 Congress also asked that an incentive payment formula for 

medical support enforcement be developed. At the same time, Congress capped the amount 

of money available for incentive payments.11
CHAPTER 7

Medical Child Support Working Group Report Page 7-3 

!FFP

Federal Financial

Participation

With this context in mind, the Working 

Group analyzed the funding stream for 

activities related to medical child support 

enforcement and the impact the funding 

mechanisms have on policy choices. The 

recommendations that follow support the 

programmatic reforms addressed elsewhere 

in this Report or that may arise with further 

study. 

Current IV-D Funding Structure

Funding for the child support enforcement 

program is provided in three general ways. 

❶ Federal Administrative Funding

The largest share of program funding comes 

from Federal administrative funds. The 

Federal government provides 66 percent of 

the operating funds for State child support 

programs.12 Federal funding at this rate is 

“open ended” in that it pays its percentage of 

expenditures by matching the amount spent 

by State and local governments, with no 

upper limit or ceiling. Federal law and 

regulations dictate the specific expenditures 

for which this 66 percent FFP is available, 

and the Federal government reviews 

expenditures to determine whether they 

were reasonable.13

❷ State and Local Administrative 

Funding 

In order to receive any Federal funding, 

State and/or local governments must provide 

34 percent of the funds needed to operate 

their child support enforcement programs. 

Most States pay for a majority of child 

support expenditures from the State’s 

general revenue. Some states pay 

administrative costs from the portion of 

TANF child support collections retained by 

the State. In some States, county 

governments pay a portion of or the entire 

State share. States also have the option to 

charge fees and recover costs for services 

from the custodial and/or noncustodial 

parent.14 

❸ Incentive Payments 

Federal incentive payments are designed to 

encourage States to operate efficient, costeffective child support programs 

A new incentive-funding scheme for child 

support enforcement will be phased in, 

beginning in fiscal year 2000.15 New 

performance measures, developed by OCSE, 

in consultation with State IV-D Directors, in 

response to law enacted by Congress in 

1996, developed base incentives on the 

program’s success in achieving a number of 

goals, in addition to its ability to provide 

services in a cost-effective manner.16 

Incentive payments are tied to the rates of 

paternity establishment, order establishment, 

collection of current child support payments, 

and collection of arrears, as well as the 
CHAPTER 7

Page 7-4 Medical Child Support Working Group Report 

!CSPIA 

Child Support 

Performance and 

Incentive Act of 1998 

!NMSN

National Medical 

Support Notice 

amount of support collected for each dollar 

spent.17

The Federal government provided incentive 

payments totaling over $411 million to State 

child support enforcement programs in fiscal 

1997. Incentive payments will be capped at 

$422 million in fiscal year 2000, and 

gradually increase to $483 million in fiscal 

year 2008.18 States must reinvest the full 

amount of Federal incentive payments in 

their child support programs.19 Incentive 

payments, whose performance measures 

mirror program goals, should encourage 

states to improve their child support 

programs and comply with Congressional 

goals. 

Policy Issues Related to IV-D

Funding

As noted above, the Federal government 

provides 66 percent of the funding for most 

IV-D program activities, including those 

related to medical support. In the past, when 

Congress wanted to encourage activity in a 

given area, it offered FFP at a higher level. 

For example, Congress provided enhanced 

FFP to encourage paternity establishment 

and automation. The Working Group 

believes that Congress should provide 

enhanced FFP at the 90 percent rate for 

medical child support activities to encourage 

states to more aggressively pursue medical 

support enforcement. 

At the current time, States are faced with 

new initiatives and competing priorities to 

medical child support enforcement activities 

at the State level. While recognizing the 

importance of medical support, IV-D 

agencies are fully occupied. Agencies 

report being occupied with implementing 

new mandates and the critical role child 

support collections play in welfare reform. 

In a world of limited TANF benefits, full 

and timely collection of child support is a 

lynchpin, critical to the economic selfsufficiency of millions of single parent 

families. 

Both CSPIA and the Working Group’s 

recommendations require State child support 

agencies to assume new responsibilities. The 

Working Group’s recommendations and 

existing Federal legislation require major 

systems changes for IV-D agencies, which 

are still struggling with PRWORA’s 

automation requirements. Some examples 

of the additional demands for automation 

and for casework services that medical child 

support enforcement—under current law and 

as proposed in this Report—places on IV-D 

agencies include: 

♦ Implementation of the NMSN 

♦ Implementation of PRWORA’s 

requirement that every child support 

order include provision for health care 

coverage 
CHAPTER 7

Medical Child Support Working Group Report Page 7-5 

♦ Implementation of new automated 

systems capable of exchanging 

information with employers and family 

health coverage plans 

♦ Implementation of additional Working 

Group recommendations, including 

recommendations that child support 

agencies make a presumptive 

determination of eligibility for Medicaid 

and help children obtain public health 

care coverage when they do not have 

access to private insurance 

♦ Implementation of the requirement that 

child support agencies consider health 

care coverage available to the custodial 

parent 

The Working Group concluded that child 

support enforcement agencies cannot be 

expected to fulfill these critical mandates 

unless they are able to hire and train 

adequate staff and fund the enhancement of 

systems. Congressional authorization of 

additional funding for medical support is 

essential to improved IV-D performance in 

this area. 

The funds that State and Federal 

governments devote to medical child 

support will be key to improving medical 

support enforcement, and implementing 

reforms. Enhanced FFP and a new incentive 

measure for the IV-D program will provide 

important sources of funding to help State 

child support agencies ensure that every 

child who is eligible for child support 

services has comprehensive health care 

coverage. 

Enhanced Federal Financial 

Participation (FFP) 

Congress has successfully used enhanced 

funding to “jump start” State 

implementation of new child support 

activities. For example, in the Family 

Support Act of 1988 Congress provided 90 

percent enhanced FFP to defray laboratory 

costs incurred in establishing paternity.20 

This enhanced FFP contributed to dramatic 

increases in the number of IV-D cases where 

paternity was established.21

Enhanced Federal funding for establishing 

and improving State automated child 

support systems similarly made it possible 

for States to comply with requirements in 

the Family Support Act and PRWORA that 

they create highly automated child support 

enforcement systems.22 These systems are 

designed to make it faster and easier to 

establish and enforce child support orders 

and to distribute the payments received. 

When completed by all jurisdictions, they 

are expected to make the child support 

program more efficient and cost-effective. 

As with these priority areas, enhanced FFP 

would highlight the importance of medical 

support and give the states the resources 

they need to implement CSPIA’S medical 

support requirements and the Working 

Group’s recommendations. However, the 

Working Group recognizes that the Federal 

government cannot be asked to provide an 
CHAPTER 7

Page 7-6 Medical Child Support Working Group Report 

open-ended commitment to funding medical 

support activities. States will need to 

assume greater responsibility for funding 

medical support. Thus, the Working Group 

recommends that Congress offer an 

enhanced 90 percent FFP rate for medical 

support activities but only for a limited 5-

year period. 

By offering this “carrot” and prioritizing 

IV-D medical support activities, Congress 

would use the power of the purse to ensure 

prompt and effective implementation of 

Title IV-D’s medical support provisions and 

the Working Group’s recommendations. 

This funding could be capped in order to 

limit the total amount of Federal funding 

earmarked for enhanced medical support 

and to help Congress predict the cost of 

implementing these provisions. #See 

Recommendation 65.

Medical Support Performance 

Incentive Measure 

In 1998, Congress established a new 

incentive payment scheme, mandated by 

CSPIA, which rewards performance in five 

areas.23 At the same time, it capped the total 

amount of Federal incentive payments that 

would be made available to the States. The 

new system is currently being phased in, and 

will be fully implemented in FY 2002.24

CSPIA also authorized creation of a sixth 

incentive measure, medical support 

enforcement.25 This legislation required that 

the medical support performance measure be 

incorporated, in a revenue neutral manner, 

into the performance measures already 

established by Pub. L. 105-200. Once a 

medical support performance measure is 

adopted, medical support will be added to 

the list of activities for which states can 

receive incentive payments. However, 

States will still be competing for the same 

pot of money, which will be divided based 

on six factors rather than five. 

CSPIA authorized the Secretary of HHS to 

develop a medical support incentive 

measure in consultation with State IV-D 

agency directors and representatives of 

children eligible to receive child support. 

The Medical Support Incentive Work Group 

began meeting in 1998. The statute requires 

that the incentive measure be based on the 

#Recommendation 65 (Federal Legislation) 

Congress should amend Federal law to provide for 90 percent enhanced 

Federal Financial Participation to State IV-D agencies for a five-year period to 

facilitate the implementation of the Title IV-D medical support requirements, 

contained in §401 of CSPIA 1998, and additional Federal requirements that 

result from the Working Group’s recommendations. This funding may be 

capped. 
CHAPTER 7

Medical Child Support Working Group Report Page 7-7 

States’ effectiveness in establishing and 

enforcing medical child support obligations. 

The Medical Incentive Support Work 

Group’s final report to Congress is due on 

June 1, 2001.26

Developing a medical support performance 

measure has proven a difficult task. The 

Medical Support Incentive Work Group’s 

June 23, 1999 preliminary report to 

Congress states that the primary obstacle is 

the lack of reliable data upon which a 

measure can be based.27 At last review by 

OCSE’s audit division, only seven states 

could provide medical support data—and 

that data was considered to have limited 

reliability. This problem will be addressed 

through the new State IV-D reporting 

requirements,28 but it will be at least a year 

before this process provides enough reliable 

and accurate data to design a truly useful 

performance indicator. 

The Medical Support Incentive Work Group 

also expressed concern about the benefits of 

implementing a performance measure before 

states actually have adequate tools to 

improve their performance in this area. The 

NMSN, which will be key to improving 

medical support enforcement, will not 

actually be finalized and in broad use until 

FY 2002. For all of these reasons, the 

Medical Support Incentive Work Group 

recommended postponing implementation of 

the performance measure. 

In the interim, the Medical Support 

Incentive Work Group will be reviewing 

State-reported data regarding the number of 

cases in which: (1) medical support (cash 

and/or family health coverage) is ordered; 

(2) health care coverage is ordered; or (3) 

health care coverage is provided as ordered. 

In addition, the Medical Support Incentive 

Work Group contemplates a system which 

rewards continuous improvement, as well as 

current performance. Given the historic 

inattention to medical support issues, it is 

important to measure improvement, so that 

States with poor records can hope to earn 

incentives by significant annual 

improvement. 

The Working Group concurs with the 

Medical Support Incentive Work Group’s 

judgment that a performance measure 

should be developed but that data is not yet 

available to do so. The Working Group also 

agrees that the Medical Support Incentive 

Work Group should develop measures that 

reward the full range of medical support 

..... it's absolutely critical that at some 

point down the line, when the dust is 

settled on what the IV-D program's 

responsibilities are in terms of medical

support, that we have an appropriate 

performance measure and we evaluate 

our progress. 

~Lee Sapienza, Chief of Policy and 

Planning, Office of Child Support 

Enforcement, New York
CHAPTER 7

Page 7-8 Medical Child Support Working Group Report 

activities, including securing and enforcing 

health care coverage in IV-D cases, 

contributions toward premiums, and other 

health care reimbursement. Consistent with 

the Decision Matrix adopted by the Working 

Group, the Medical Support Incentive Work 

Group should devise a measure that rewards 

States for enrolling children in the most 

appropriate coverage, whether that is 

private or public. The incentive payment 

scheme should reward States which screen 

cases and follow through, so that children 

who cannot obtain private coverage are 

enrolled in public coverage, such as 

Medicaid or SCHIP. 

The Working Group supports the idea of a 

standard that sets minimum acceptable 

performance levels and rewards significant 

improvement over that level. Finally, the 

Working Group also agrees with the 

Medical Support Incentive Work Group’s 

finding that the states need to have access to 

the tools needed to improve their 

performance, before Congress establishes a 

performance measure. 

A number of the recommendations made in 

this Report require changes in Federal law 

and regulations, which will occur over a 

period of time. Furthermore, the results of 

demonstration projects suggested in Chapter 

8 are designed to provide additional insight 

into ways to further improve medical 

support enforcement. These results are 

several years away. For these reasons, the 

Working Group recommends that the 

medical support incentive payment system 

be developed and implemented in 

conjunction with other funding 

recommendations. #See 

Recommendation 66.

Members debated whether a proposed fiveyear delay in implementing the performance 

measure for medical support was a de facto

approval of putting off improvements in 

medical support enforcement. The Working 

Group also struggled with counterbalancing 

concerns that the automated reporting 

system does not adequately reflect medical 

support activity while counting such 

activities without automation would distract 

from the provision of direct service to the 

children. 

#Recommendation 66 (Federal Legislation) 

Congress should amend Federal law to require that the medical support 

incentive measure is developed in conjunction with the implementation of 

CSPIA 1998 §401 requirements and additional requirements that may be 

imposed by law or regulation, based on the recommendations of the Working 

Group. The measure should also take into account the findings of the 

research and demonstration grants undertaken by States and funded by 

HHS. 
CHAPTER 7

Medical Child Support Working Group Report Page 7-9 

With the need for the development of 

outcome measurements—not only for the 

existing requirements but also for any that 

are implemented due to the Working 

Group’s recommendations—delay was 

unavoidable. But the consensus was that a 

full 5-year delay for development and 

implementation of this incentive measure 

was untenable. The consensus reached 

balances the practical considerations 

described above with the need to send the 

message that medical support activities must 

happen sooner—not later. 

The Working Group does not favor 

indefinite postponement of State 

accountability for improved medical support 

enforcement. Indeed, some members of the 

Working Group felt that postponement of 

the medical support performance incentive 

measure might give states an undeserved 

reprieve, since medical support requirements 

are not new to the IV-D agencies.29 A 

number of Working Group members found 

the lack of data disturbing in light of 

existing statutory requirements. They feared 

that postponing implementation of a medical 

support incentive system would reward 

states that have long ignored medical 

support. 

Others observed that postponing 

implementation of the medical support 

incentive measure could send the wrong 

signal to State child support agencies. The 

Working Group’s decision to develop and 

implement this incentive measure in 

conjunction with other efforts should not be 

interpreted as a decision to downgrade the 

importance of medical support in the child 

support enforcement program. The Working 

Group wants to stress that the period of 

enhanced FFP should be used as a time of 

preparation for and focus on making medical 

support a core child support activity. 

Otherwise, children could needlessly be 

denied health care coverage, at great cost to 

private insurers, public health care 

programs, and most importantly the children 

themselves. 

Ultimately, the Working Group concluded 

that enhanced FFP for a limited time period

would focus states’ attention on medical 

support, and generate increased State 

activity in the medical support area. This 

funding would expire after five years. Thus, 

it seemed appropriate to propose a plan in 

which the medical support incentive 

payment would be phased in and become 

fully operational as enhanced Federal 

funding ends. To achieve this, the medical 

support incentive measure must be 

developed as quickly as possible. 

The Working Group recommends that the 

Medical Support Incentive Work Group 

continue its work and develop its 

recommendations, so that the medical 

support performance indicator will be 
CHAPTER 7

Page 7-10 Medical Child Support Working Group Report 

published in final form within three years of 

the date enhanced FFP becomes available. 

At that point, OCSE should begin gathering 

the data needed to assess State performance, 

so that the medical support performance 

indicator will be fully implemented into the 

incentive payment system when the 

enhanced Federal funding expires at the end 

of the five-year period. 

Under this approach, CSPIA’s requirements 

will be fully implemented, and 

recommendations of the Working Group 

should be in place before the incentive 

payment becomes fully operational. In the 

meantime, enhanced FFP will make it 

possible for states to fund more concerted 

efforts in the medical support area. When 

enhanced funding ends, the incentive 

payments system will reward states for 

continued, focused, medical support activity, 

and they will have the tools necessary to 

ensure that medical support is consistently 

ordered and enforced. #See 

Recommendation 67.

Cross-Program Funding 

Most Working Group members agree that 

medical support efforts of the IV-D agencies 

have resulted in savings to the Medicaid 

program. Identifying the savings to the 

Medicaid program (and the cost avoidance 

to SCHIPs) when the IV-D agency obtains 

coverage on behalf of Medicaid and SCHIP 

recipients is an important and complex 

matter that the Working Group strongly 

believe merits further study. 

So that IV-D agencies benefit from their 

efforts to obtain third-party private health 

insurance, State Medicaid agencies could 

share these cost savings with the IV-D 

agencies. New York State, for example, 

estimates that for every Medicaid child who 

has private health care coverage available, 

there is a potential Medicaid savings of $666 

per year.30

Since receipt of such savings could be a 

strong incentive to the IV-D agency to enroll 

children in private health insurance, the 

#Recommendation 67 (Federal Legislation) 

Congress should amend Federal law to require HHS to publish the medical 

support performance incentive measure in final form within three years of the 

date the 90 percent FFP goes into effect. Implementation of the medical 

support performance incentive measure shall begin upon publication, 

including the collection and submission by the States to OCSE of all data 

necessary to calculate the measure. The medical support performance 

incentive measure shall be included in the calculation of incentive payments 

due States beginning 2 years after publication. This five-year time period 

shall run concurrent with that set forth in Recommendation 65 (Federal 

Legislation). 
CHAPTER 7

Medical Child Support Working Group Report Page 7-11 

medical support incentive measure could be 

used to better identify these savings, with 

the IV-D, Medicaid, and SCHIP agencies 

collaborating in establishing the appropriate 

reporting requirements. 

The Working Group identified several 

complications in the measurement and 

distribution of such savings. First, much of 

the Medicaid savings realized through 

medical child support collection will be 

through cost avoidance instead of cost 

recovery. Expenses that are cost avoided do 

not show up in accounts receivable as a 

specific amount. Not only is it very difficult 

to determine accurately the exact amount of 

Medicaid spending that has been cost 

avoided, but there is no “pot of money” in 

which cost-avoided funds reside. 

Second, because IV-D agencies receive a 

higher rate of FFP than Medicaid agencies, a 

policy of direct cross funding from the 

Medicaid agency to the IV-D agency could 

result in an overall loss of State funds (as 

more of the savings would need to be 

returned to the Federal government). 

Because of its potential and its complexity, 

the Working Group urges further study of 

this possibly useful practice. #See 

Recommendation 68.

The implementation of CSPIA IV-D 

medical support requirements and the 

changing tide of health care coverage 

available to families both from private and 

public sources gives rise to a need for 

evaluation of the effectiveness of child 

support’s involvement in medical support 

enforcement and the interface between 

programs. To that end, Chapter 8 sets forth 

areas where research and demonstration 

projects are required. Of particular relevance 

#Recommendation 68 (Research and Demonstration)

HHS should study the savings and cost avoidance to the Medicaid program 

when IV-D secures and enforces a medical child support order for private 

insurance for Medicaid-eligible children. HHS should also study alternate 

methodologies to supplement funding for the child support enforcement 

program based on such Medicaid program savings and avoided costs. If 

HHS does not have sufficient funds to meet the cost of such a study, it 

should seek an additional appropriation from Congress. 

“[W]e should explore the possibility of

cross-program funding and ... we 

should use that possibility as a vehicle 

for rewarding effective performance. 

It's very consistent with the whole of 

CSPIA,[so that] when IV-D agencies 

actually do good jobs in medical 

support enforcement, they benefit from 

cost-avoiding in the Medicaid 

program.” 

~Ruth Bell Clark, National Child 

Support Association 
CHAPTER 7

Page 7-12 Medical Child Support Working Group Report 

to cross-program funding is 

Recommendation 70. The Working Group 

urges Congress and the Executive branch to 

support such research and demonstration 

through appropriate funding. 

Endnotes 

 

1

 See Krueger, Ruth Gillie. “Analyzing 

American Social Policy: A Study of the 

Development of the Child Support Provisions of 

the Personal Responsibility and Work 

Opportunity Act of 1996 (PRWORA).” 

Dissertation presented to the University of 

Southern California School of Public 

Administration (December 1998); Committee on 

Ways and Means, U.S. House of 

Representatives, “The Child Support 

Enforcement Program: Policy and Practice.” 

U.S. Government Printing Office (December 5, 

1989). 

2

 U.S. Department of Health and Human 

Services, Administration of Children and 

Families, Office of Child Support Enforcement, 

Twenty-second Annual Report to Congress, 

Table 1. Financial for Five Consecutive Fiscal 

Years.

3

 Section 402a of the Social Security Act, 42 

U.S.C. §402(a)(ii). 

4

 Pub. L. 90-248. 

5

 However, for the first five years of the 

program, FFP for non-AFDC cases was 

somewhat problematic. In 1980, financing for 

non-AFDC cases was made permanent. 

6

 Pub. L. 93-647, 42 U.S.C. §651 et seq. 

7

 This figure was reduced to 12 percent effective 

October 1, 1983. Pub. L. 96-178, Pub. L. 96-

265, Pub. L. 96-272. 

8

 Pub. L. 98-378. 

9

 Pub. L. 100-465. 

10 42 USC §658a. This new system is being 

phased in and will be fully operative in FY 2002. 

11 Pub. L. 105-200, § 401 112 Stat. 659 (1998). 

12 42 U.S.C. §655(a) (1999); 45 C.F.R. 304.20 

(1999). 

13 42 U.S.C. §655(a) (1999); 45 C.F.R. 304.20 

(1999). 

14 Fees received and costs recovered for nonTANF cases totaled $40,797,848, in fiscal year 

1997, (Twenty-second Annual Report to 

Congress, Table 22). 

15 42 U.S.C. §658a (1999). 

 

16 42 U.S.C. §658A (1999). This approach was 

endorsed by the U.S. Commission on Interstate 

Child Support Enforcement in its Report to 

Congress, “Supporting Our Children, a Blueprint 

for Reform” (1992), 288. 

17 42 U.S.C. §658a(b)(4). The incentive 

measures are as follows: 

a) Paternity Establishment: The ratio of children 

in the State or IV-D caseload who were born out 

of wedlock and have paternity established 

compared to the total number of children in the 

State or IV-D caseload who were born out of 

wedlock in the prior year. 

b) Order Establishment: The percentage of IV-D 

cases with support orders. 

c) Collection Rate: The IV-D collection rate for 

current support due. 

d) Collection of Arrearage: The percent of IV-D 

arrearage cases paying. 

e) Expenditures:Collections Ratio: The total 

dollars collected per dollar of expenditures. 

18 42 U.S.C. §658a (1999). 

19 42 U.S.C. §658a(f)(1999). 

20 42 U.S.C. §655(a)(1)(C) (1999). 

21 Office of Child Support Enforcement, Twentysecond Annual Report to Congress and Twentyfirst Annual Report to Congress. 

22 42 U.S.C. §654(16), 42 U.S.C. 

§655(a)(1)(1999). 

23 42 U.S.C. §658a (1999). 

24 Id. 25 Pub. L. 105-200 §201(d)(6)(E), 112 Stat. 657 

(1998), codified at 42 U.S.C. §658a, note 2 

(1999). 

26 Id. 27 HHS, Report to Congress on the Development 

of a Medical Support Incentive for the Child 

Support Enforcement Program (June 23, 1999), 

1. 

28 HHS, Report to Congress on the Development 

of a Medical Support Incentive for the Child 

Support Enforcement Program (1999), 2. 

29 Since the 1980s child support agencies have 

been required to enforce medical support. See 

Pub. L. 98-378, the Child Support Amendments 

of 1984. 

30 New York State Department of Health, Office 

of Medicaid Management. 
CHAPTER 8

Medical Child Support Working Group Report Page 8-1 

CHAPTER 8. Shaping

the Future: Strategies for

Ensuring Ongoing

Improvements

Introduction

The Working Group learned many important 

lessons through its deliberations. Two of the 

most important were: (1) we do not have all 

the solutions to improving health care 

coverage for children, and (2) the IV-D 

program by itself cannot “fix” the health 

care coverage problem for children, even for 

those children receiving services through the 

IV-D system. 

One of the major tasks of this first decade of 

the twenty-first century will be to build 

consensus on what we as a society want 

from our system of health care delivery. To 

do this the private and public sector must 

form a partnership that will weigh and 

balance the health care concerns of all 

segments of society. Just a few of the issues 

that need to be considered are: the relative 

importance of health prevention and medical 

treatment; the health care needs of the aging 

baby-boomers relative to those of young 

adults and their children; the role of 

employers and the private insurance industry 

as the primary provider of health care 

coverage and the role of government in 

filling gaps in that coverage; the impact of 

!CHAPTER 8 AT A GLANCE

INTRODUCTION, 8-1 

FINDING NEW SOLUTIONS, 8-2 

Using the New Hire Process to Collect Health Care Coverage Information, 8-2

Learn More About What Works, 8-4

Developing “Fill the Gap” Coverage, 8-7

BETTER COORDINATION OF POLICIES AND PROGRAMS, 8-9 

Building Better Partnership for Health Policy Oversight, 8-11

National Policy Coordination Group, 8-11 

Federal Regulatory Coordination Group, 8-12 

Containing Health Care Cost, 8-13

Consumer Education and Preventive Health Care, 8-13

REVIEW OF TAX POLICY, 8-14 

Theme

To give children the opportunity for health care coverage will require the development of 

new strategies that keep up with the changes in the labor force, health care, family 

structure, and public programs. Research and demonstration activities can help improve 

coordination of coverage, fill gaps, and identify new and better ways to get coverage to 

children. Collaborations within and among Federal and State agencies can help contain 

costs, identify problems, and make mid-course corrections. Like the old paradigm for 

Medical Support, the new ideas presented in this Report will become obsolete; knowledge 

development and coordinated efforts will keep our joint efforts relevant to changing 

conditions. 
CHAPTER 8

Page 8-2 Medical Child Support Working Group Report 

utilization and technological advancements 

on health care costs; and the appropriate 

balance between “market” forces and 

government intervention. All of the choices 

that we as a society make about our health 

care system will have consequences for our 

ability to ensure health care coverage for 

children. 

The development of strategies to improve 

health care coverage for children must be 

the on-going responsibility of all the 

stakeholders—parents, employers, private 

and public health care plans and providers, 

courts, State and Federal agencies—and of 

society as a whole. This chapter considers 

how we can continue to make long-term 

improvements in health care coverage for all 

children. 

Finding New Solutions

The Working Group identified a number of 

important areas where improvements needed 

to be made but where information was 

insufficient to ensure that national adoption 

of a particular policy would have a 

uniformly positive affect. To further 

explore or evaluate these ideas through 

research and demonstration activities 

seemed to be a reasonable approach. Once 

tested, the findings of these activities might 

result in national program or policy 

modifications or technical assistance and 

best practice dissemination. An important 

aspect of the research and demonstration 

activities is to assess the impact of change 

on all the relevant stakeholders, and not to 

focus exclusively on the IV-D perspective. 

Using the New Hire Process to 

Collect Health Care Coverage 

Information 

The need for information about health care 

coverage whenever the obligated parent 

started a new job was recognized as critical 

if the IV-D agency was to keep health care 

coverage current. The Working Group 

discussed strategies that might allow for 

automated or routine collection of this 

information rather than seeking it on a caseby-case basis. This would maximize the 

efficient use of the Notice. One option 

discussed was to include health care 

coverage information as part of the New 

Hire Reporting process. 

The New Hire Reporting system requires 

employers to provide the State with the 

name, address, and social security number of 

each new employee within 20 days of hiring. 

“...we've got to look forward and not 

see just what exists today and how 

health care is delivered today, but also 

what might be on the horizon for the 

future, and what changes could we 

expect for future generations?” 

~Cornelia Gamlem, Vice President at 

Large, Society for Human Resources 

Management 
CHAPTER 8

Medical Child Support Working Group Report Page 8-3 

This information is then matched with the 

State’s child support enforcement data base 

to identify noncustodial parents who are 

being sought for paternity or award 

establishment or for enforcement of a child 

support order. If there is a match and a 

noncustodial parent owes support under an 

existing order, the State issues a Notice to 

Withhold Income for Child Support that 

instructs the employer to withhold child 

support from the employees wages.1

 This 

process, especially when fully automated, 

can significantly reduce the amount of time 

needed to put a wage-withholding order in 

place. Adding health care information to 

this process would make the collection of 

information routine and give the IV-D 

agency a head start on putting new coverage 

in place. 

Eleven States currently ask employers to 

provide health care coverage information as 

part of their New Hire process. The 

Working Group members contacted the 

States and ascertained that reporting is 

mandatory in Iowa and Rhode Island and 

voluntary in the other nine States—the 

District of Columbia, Georgia, Kentucky, 

Maine, Maryland, Montana, New Mexico, 

Oklahoma, and Tennessee. Preliminary 

information from those States was 

considered inconclusive. States with 

voluntary reporting provisions indicated that 

the number of employers who reported the 

information was limited. No State had 

conducted an analysis of whether the 

information collected at the time of hire was 

still accurate at the time the employee 

became eligible to enroll for health benefits. 

In addition, representatives of the employer 

community were concerned that increased 

reporting requirements for employers may 

have unintended consequences. The 

Federally mandated elements of the New 

Hire system are synonymous with other 

Federal reporting requirements, making 

compliance by employers very quick and 

easy. To the extent that employers have to 

spend more resources to comply with new 

Federal requirements, they have less money 

to spend on benefits for employees. This is 

especially true of small employers. 

The Working Group recognizes that a quick, 

routine, and universal reporting system for 

health care coverage data could facilitate a 

more automated approach to issuing the 

Notice and, therefore, increase the number 

of months that child support-eligible 

children are enrolled in private health care 

coverage. However, in the absence of firm 

evidence that the benefits of using the New 

Hire Reporting system to obtain this data 

would outweigh costs, the Working Group 

recommends that HHS quickly undertake a 

study of states where employers currently 

report such information. This study should 
CHAPTER 8

Page 8-4 Medical Child Support Working Group Report 

!SCHIP

State Children’s

Health Insurance

Program

examine both mandatory and voluntary 

reporting. #See Recommendation 69.

Learn More About What Works

The Working Group understands that its 

recommendations have profound 

implications for the IV-D, Medicaid, and 

SCHIP programs. Envisioning a more 

seamless interface between these agencies 

and between private and public coverage 

than currently exists, the next several 

recommendations highlight the need for 

research, demonstrations, and studies that 

will help the public and private sector build 

a more effective and efficient system of 

coverage. 

Better coordination and communication is 

needed if children are to be enrolled in the 

most appropriate private or public coverage 

each time a support order is entered. Such 

coordination is even more important to 

ensure continuity of coverage as children 

move between public and private coverage 

or to a different private provider. 

Information is also needed in order to 

document funding needs for IV-D medical 

support services and to determine the 

amount of public medical cost savings 

attributable to child support agencies’ 

efficient handling of medical support. Such 

issues take on further importance and 

become more complex in interstate cases. 

Current Federal law requires the Secretary 

of HHS to issue regulations that will 

facilitate the exchange of information on 

available family health coverage between 

IV-D and Medicaid agencies.2

 Furthermore, 

current Federal policy requires SCHIP plans 

to include procedures to ensure coordination 

with other public and private programs that 

provide health coverage for low-income 

children.3

 Factors such as high case loads 

and manual procedures, as well as other 

systemic factors, may impede required 

coverage coordination and data exchanges 

between these programs. There is presently 

no set of known best practices that, if 

adopted, would facilitate coordination and 

#Recommendation 69 (Research and Demonstration)

The Federal OCSE should conduct a study of the 11 States that ask 

employers to submit health care coverage information as part of their New 

Hire Reporting process. The study should analyze the costs and benefits of 

these efforts from the point of view of employers and States, consider the 

privacy issues raised by such an information exchange, and identify any 

precautions taken to protect the privacy of case participants. The results 

shall be communicated to the States and to the Congress. 

If HHS does not have sufficient resources available to fund these studies 

and/or demonstration projects, the agency should seek an additional 

appropriation from Congress. 
CHAPTER 8

Medical Child Support Working Group Report Page 8-5 

communication between these programs. 

Consequently, children who are eligible 

often go without public health care 

coverage, while others receive coverage 

from Federally-funded sources, although 

appropriate private coverage is available. 

Documenting and sharing best practices 

would increase the potential for getting 

children into the right coverage option.

Most children enrolled in Medicaid are 

allowed to maintain both Medicaid and 

private coverage concurrently. Whenever 

this occurs, the private coverage is intended 

to be the primary source of coverage, 

leaving Medicaid to pick up where the 

private coverage leaves off. HCFA refers to 

this as “wraparound” coverage. This also 

provides continuous coverage for children 

who lose Medicaid coverage. 

Conversely, with respect to SCHIP, children 

are not allowed to be enrolled in a separate 

SCHIP plan and private coverage 

concurrently. This makes it an ineffective 

source of “back up” coverage for lowincome children who do not qualify for 

Medicaid. Parents who have access to 

family health care coverage at little or no 

cost may choose not to enroll their children 

in the plan because SCHIP provides needed 

services that are not covered under the 

parent’s private group health plan. 

Permitting children who are covered by 

other health care plans to enroll in SCHIP 

would eliminate the problem of crowd-out, 

and provide children with continuous 

coverage if they become ineligible for 

SCHIP or lose coverage under their parent’s 

health plan. This also would ensure a 

smooth transition from Medicaid plus 

private coverage, to SCHIP plus private 

coverage, to only private coverage as the 

parents' incomes rise. The Working Group 

recommends that HCFA use its authority to 

authorize demonstrations allowing States to 

permit SCHIP enrollees to have other 

coverage. 

The movement towards managed care plans 

also complicates dual coverage 

coordination. While some managed care 

plans have interlocking agreements to pay 

for or provide treatment for each others 

enrollees, it was reported by Working Group 

members that some managed care plans do 

not seek reimbursement from another 

managed care plan (and for routine care, 

may not seek reimbursement even from a 

fee-for-service plan). In the context of child 

support-eligible-children enrolled in 

Medicaid managed care plans, this may 

mean that the noncustodial parent is paying 

premiums for health care coverage that is 

never used by her children. 
CHAPTER 8

Page 8-6 Medical Child Support Working Group Report 

Some states have developed policies and 

procedures to avoid unreimbursed or 

underutilized coverage. For example, 

Massachusetts has developed procedures 

where children with private fee-for-service 

coverage are not enrolled in the Medicaid 

managed care plan, but are placed in its 

alternative fee-for-service Medicaid 

program. This allows the Medicaid program 

to only pay for Medicaid services not 

covered by the private plan. Alabama has 

developed system edits to ensure that 

managed care providers do seek appropriate 

third-party reimbursement when private 

coverage for children is obtained. The 

Working Group believes that such practices 

should be encouraged and that additional 

innovative ways of coordinating coverage 

should be developed so that the utilization of 

managed care does not have the unintended 

consequence of increasing Medicaid costs or 

reducing children’s enrollment in private 

health care coverage. #See 

Recommendation 70.

#Recommendation 70 (Research and Demonstration) 

HHS should undertake projects that will examine various aspects of the 

intersections of child and medical support enforcement. These projects will 

encourage States to implement the Working Group’s recommendations and 

promote further innovations to expand health care coverage for children. The 

projects may be, but should not be limited to, §1115 demonstrations and Child 

Support Enforcement State program improvement grants projects. These 

grants might examine issues such as: 

♦ States’ efforts to coordinate health care coverage availability between the 

Child Support, Medicaid, TANF, and SCHIPs programs 

♦ Best practices in establishing and enforcing private family health coverage 

♦ How automation/technologies can be used to improve medical child support 

enforcement and save tax dollars 

♦ States’ creative use of cross-program funding to promote medical support 

enforcement including, but not limited to, SCHIP block grant funds, 

PRWORA-related Medicaid matching funds, Federal TANF or States’ 

maintenance of effort funds (MOE), and other block grant funds 

♦ The availability of private family health coverage to IV-D families with an 

emphasis on access, cost, and comprehensiveness of family health 

coverage 

♦ State-specific demographic and economic variables that impact 

performance and States’ ability to improve medical support enforcement 

performance 

If HHS does not have sufficient resources available to fund these studies and/or 

demonstration projects, the agency should seek an additional appropriation 

from Congress. 
CHAPTER 8

Medical Child Support Working Group Report Page 8-7 

Developing “Fill the Gap” 

Coverage 

One barrier to achieving health care 

coverage for all child support-eligible 

children is that not all parents (even when 

both parents’ health care coverage is 

considered) have access to affordable 

employer-based dependent health coverage.4

While many children may be eligible for 

Medicaid or SCHIP, some are not. About 

one half million children who live in child 

support-eligible families with incomes over 

$ Sacramento IV-D Kids Medical Insurance Project 

In 1995, when California’s child support enforcement responsibility was still vested in 

each of its 58 counties individually, Sacramento County instituted a unique public-private 

partnership approach to providing affordable health care coverage for children by 

contracting with several providers for a child-only pool of reasonably priced “group rate” 

insurance that met medical support requirements. All children in the IV-D system are 

eligible for this coverage. 

The IV-D Kids Program targets a significant health coverage gap—children whose 

parents do not meet income eligibility criteria for Medicaid or SCHIP and yet cannot 

afford the cost of private coverage. Like the SCHIP program, IV-D Kids insurance is 

offered by private-sector insurance companies. Unlike SCHIP, IV-D Kids insurance is 

available regardless of income level, and the premiums are directly paid by parents, rather 

than from public funds. Non-resident parents whose income exceeds SCHIP guidelines 

pay the full unsubsidized cost of this health coverage. 

Some of the unique features responsible for the success of this program include the fact 

that there is no separate application process for the parents. Instead, the court adds the 

modest cost of the premium to the basic child support order at the hearing when ordering 

health coverage for an otherwise uninsured child. Employers of non-resident parents are 

directed, via a wage assignment, to forward insurance premium payments from the 

employees’ wages to a third party administrator. Self-employed non-resident parents 

send premiums directly to the administrator. The administrator signs up the child with 

the provider, pays the premiums and alerts the custodial parent and the IV-D Agency 

when the payment is not received. In order to prevent the policy from lapsing for 

nonpayment, the custodial parent could meet the obligation while the child support 

agency is investigating the delinquency. In the future, California plans to implement an 

“insurance buffer zone” that will allow IV-D Kids insurance benefits to continue if the 

non-resident parent is briefly unemployed or experiences a short-term drop in income (to 

below guideline amounts). 

Experience has shown that by increasing the number of children in the insurance pool, the 

IV-D Kids program could expand benefits (in particular, to include dental and vision 

benefits). It is anticipated that California’s newly centralized Department of Child 

Support Services will achieve this goal by expanding the scope of this program to create 

an avenue though which all 29 of the State’s CHIP providers will be accessible through 

the IV-D Kids program. 

Additional modification to ensure coverage regardless of parents’ income level will be 

developed as California gains more experience with this program.
CHAPTER 8

Page 8-8 Medical Child Support Working Group Report 

200 percent of poverty have no private or 

public health care coverage during a year.5

 

In addition, many other children do not have 

continuous coverage, and these children also 

need better health care coverage. The IV-D 

agencies are ideally situated to identify, 

rapidly and easily, these children who lack 

medical insurance coverage. 

Certain public-private arrangements, such as 

the Sacramento IV-D Kids program have 

had modest success in providing affordable 

coverage for children not otherwise eligible 

for Medicaid or SCHIP. The Working 

Group recommends that demonstration 

projects combining public and private 

resources be funded to determine if 

innovative programs to fill the coverage gap 

can be successful on a large scale and 

replicated in other areas. 

One replication problem the Working Group 

noted was that while a significant number of 

middle-income children need coverage, the 

number of children available for the 

insurance risk pool in any given area varies 

greatly across State and local jurisdictions. 

Because a large risk pool of children is 

needed to absorb the risk of a seriously-ill 

child, small numbers of children place 

insurers at greater risk of not covering costs. 

This increased risk results in higher 

premiums for parents and reduced benefits 

for children, as is the case with the 

Sacramento IV-D Kids program. Therefore, 

the Working Group includes as part of this 

recommendation that the demonstration 

projects include a strong element of 

cooperation with SCHIP as a means to 

expand the scope of dependent health 

coverage provided, geographic areas of 

coverage, numbers of children insured, and 

portability of health insurance coverage. A 

program that could combine the privatepayer features of Sacramento’s IV-D Kids 

pilot program with SCHIP’s larger group of 

providers, comprehensive benefits, and low 

premiums could provide comprehensive 

medical coverage that seamlessly covers 

children, regardless of parents’ income 

levels (Medicaid, SCHIP, or non-aided). 

Another feature that the Working Group 

would like considered in these 

demonstrations is the placement of a 

medical support facilitator within the court 

or administrative unit handing the child 

support actions. The facilitator would 

communicate with the administrators of the 

various coverage options. One aspect of the 

“[T]here are so many people who are 

not eligible now for medical coverage, 

who are not eligible for SCHIP, that 

there's got to be a large segment of the 

population that need a pool, and 

maybe a kids' pool would ... allow 

children to be covered.” 

~R. Ann Fallon, Attorney at Law, 

Whiting, Fallon & Ross 

" See

box,

“Sacramento

IV-D Kids

Medical

Insurance

Project,” page

8-7.
CHAPTER 8

Medical Child Support Working Group Report Page 8-9 

demonstration would explore the different 

ways to structure the multi-layered 

communication to ensure that each child 

gets into the right coverage option and to 

determine the best procedures for 

communicating with the custodial and 

noncustodial parent. 

Payment of premiums would most likely be 

made through wage assignment. But the 

demonstrations should explore whether the 

cost of premiums should vary depending on 

parent income. For example, if the 

noncustodial parent met income 

qualifications for the SCHIP coverage, the 

current requirement that the IV-D agency 

pursue the noncustodial parent for the full, 

unsubsidized cost of the insurance premium 

could be waived: that is, qualifying under 

SCHIP’s income test would itself be prima 

facie evidence of a noncustodial parent’s 

inability to pay a full premium. If the 

noncustodial parent did not qualify for fullysubsidized coverage under the SCHIP means 

test, a wage assignment for the full premium 

would be issued. However, because the 

overall pool of children would now include 

all children—those covered by SCHIP, 

Medicaid, and IV-D Kids—the “full 

premium” could be substantially less than 

the group rate secured by an independent 

“gap” program alone. If the noncustodial 

parent did not qualify under the SCHIPbased means test, then the noncustodial 

parent would be responsible for the 

unsubsidized portion of the premium. 

The SCHIP provider pool should not be 

adversely affected by adding more children 

into the coverage pool. The children 

reached by the new coverage are not insured 

elsewhere, so crowd-out is not an issue 

under this plan. That is, an increase of 

children insured under a combined SCHIPMedicaid-Gap Coverage Program will not 

result in a corresponding market reduction in 

another plan. Instead, children (and their 

parents) will be first-time and potentially 

long-term customers of the insurers who 

provide them with health care coverage. 

Also, the inclusion of additional children, 

accompanied by inexpensive consumer 

education about preventive care, could 

increase insurance company profitability 

while it improves children’s health. #See 

Recommendation 71.

Better Coordination of Policies

and Programs

The mandate of the Working Group focuses 

the health care coverage spotlight on IV-D 

medical child support enforcement. This 

topic, however does not exist in isolation 

and it is subject to meaningful examination 

only if cast against the backdrop of the 

national health care landscape. It is 

extremely important that broad efforts to 

improve health policy continue to be 
CHAPTER 8

Page 8-10 Medical Child Support Working Group Report 

undertaken so that IV-D medical support 

efforts are not hampered by a lack of 

coordination and cooperation in the broader 

health care environment. 

#Recommendation 71 (Research and Demonstration) 

The HHS should seek Congressional appropriation to fund demonstration 

projects for a minimum of three to five years to encourage states to adopt 

public-private partnership health care models for children who are eligible for 

IV-D services. The HHS should provide information to the States regarding how 

to establish a public-private model (such as Sacramento IV-D Kids) that is 

combined with SCHIP/Medicaid program to make private insurance available for 

individual children at a group rate. Model programs will have features such as 

the following:

♦ State IV-D Agencies will gain access to the SCHIP provider pool, making the 

SCHIP’s benefits, including dental and vision, accessible to a pool of 

children eligible for child support services at the reduced rate created by 

the increased population pool. 

♦ The target group will be children served by State child support enforcement 

agencies, regardless of income level, who do not have reasonable access to 

employer-provided insurance due to cost, access, continuity of coverage or 

other reasons. 

♦ Facilitators for the Model program will be stationed in family law courts, 

who will enroll children for coverage at the time the order for support is 

entered. The facilitator will communicate with the third-party administrator, 

who will facilitate all subsequent transactions between the third-party 

SCHIP and the children. 

♦ The efficacy of the court facilitator’s role in the Model program will be 

evaluated separately and as part of the whole Model. The separate 

evaluation will focus on the facilitator’s effectiveness in making families 

aware of various available health care programs and enrolling children in 

the most appropriate and cost-effective programs. 

♦ If the noncustodial parent’s income is higher than the SCHIP-based 

eligibility cut-off, a wage assignment for the full insurance premium will be 

issued. However, since the overall pool of children would include children 

covered by SCHIP, Medicaid, and the Model program, the “full premium” 

could be substantially less than the group rate secured by the IV-D Kids 

Program alone. If the noncustodial parent’s income and assets make the 

children ineligible for SCHIP, then the noncustodial parent will be able to 

buy into the equivalent of the SCHIP program by paying the premium 

required under the Model program. 

♦ Since the medical premium will be part of the child support order, a 

separate health care application process will not be needed. 

♦ Coordinating the third-party administrators of the Model program and the 

SCHIP program will create a system that provides children with seamless 

health care coverage throughout the life of the order, regardless of changes 

in the parents’ income levels. 
CHAPTER 8

Medical Child Support Working Group Report Page 8-11 

Building Better Partnership for 

Health Policy Oversight 

The majority of the nation’s health care 

coverage for children is provided through 

the employer community. Impediments to 

employer-sponsored coverage directly 

impact the extent to which children receive 

health coverage. The lack of coordination at 

the national level creates anomalies and 

confusion, contributes to unwillingness or 

inability to participate in or provide group 

health coverage, and promotes a litigious 

environment. This ultimately discourages 

provision of health coverage and increases 

health care costs, further exacerbating the 

uninsured problem. 

The Working Group recommends that action 

be taken to convene two related working 

groups—a national policy and coordination 

group and a Federal legislative and 

regulatory group—to provide oversight on 

health care programs that affect children. 

National Policy Coordination Group 

The Working Group has been successful in 

exchanging ideas and developing solutions 

that reflect a partnership of diverse 

communities—government, business, 

parents, and advocates. We are 

recommending that this process be 

institutionalized to benefit future generations 

of children and families through the creation 

of a national health care policy coordination 

group. 

Such a group would be able to help establish 

objectives for improved health care and to 

guide initiatives in furtherance of those 

objectives. The policy group could lead the 

effort to help establish national health care 

policies and objectives and to help establish 

priorities for health care needs. It would be 

comprised of various sectors involved in the 

health care field, such as government 

representatives at the State and Federal 

level, as well as industry groups 

representing the insurance industry, 

#Recommendation 72 (Federal Legislation) 

The Administration should convene a national policy and coordination group 

that will act through the Federal agencies to provide oversight on health care 

programs that affect children. The policy group should establish a mechanism 

or process to encourage dialogue and ensure coordination on health care 

program issues, especially those impacting children. This process will ensure 

that interested groups, such as Child Support Enforcement, providers, and 

payers, help in developing and implementing national objectives concerning 

health care coverage for children. The group will help ensure that policies, 

objectives, guidelines, and regulations are consistent, and that these initiatives 

are designed with consideration for their impacts on all affected parties. 
CHAPTER 8

Page 8-12 Medical Child Support Working Group Report 

employers, and business community. The 

charter of the policy group would include 

researching legislation and regulatory 

directives to determine if they present any 

conflicts to existing legislation (both at the 

State and Federal level), and to determine 

whether these directives would negatively 

impact health care costs. This group would 

evaluate whether a proposal will enhance the 

goal of any national health care policy that 

may be developed or will be 

counterproductive (that is, result in higher 

costs or hinder the effects of existing 

legislation.) This group would study the 

effects to assure that there are no resulting 

unintended consequences. #See 

Recommendation 72.

Federal Regulatory Coordination Group 

Piecemeal Federal legislation and/or 

regulatory agencies’ requirements are not 

inherently ineffective, but often do create 

unintended consequences. The work of the 

broad interagency health care policy 

coordination group, discussed above, would 

be strengthened by the establishment of a 

Federal legislative and regulatory oversight 

group with specific responsibility to guide 

development and implementation of specific 

proposals within the context of the broad 

health policy environment. This oversight 

group would consist of representatives of 

HHS to represent medical and social issues, 

DOL to represent employment interests, and 

the Department of Treasury to represent 

interests related to tax implications and 

incentives and others as appropriate. 

States should also be encouraged to develop 

such oversight groups. Numerous State 

programs and mandates have been 

#Recommendation 73 (Administrative Action) 

All Federal and State regulatory agencies should develop mechanisms for 

reviewing proposed health care programs and mandates and incorporating 

programs and mandates for subsequent periodic review. 

Review mechanisms should focus on: 

♦ Research designed to obtain information about how proposed programs or 

mandates may conflict with existing programs or mandates, especially 

those that will impact children. 

♦ Establish standards and goals for initiatives and mandates. For example, 

the number of uninsured children has been reduced by 20 percent (+/-). 

♦ Periodically review established programs, in accordance with standards 

and goals, such as the goal of cost-effectiveness, and determine whether 

and to what extent programs are achieving their intended purposes. For 

example, child support enforcement agencies should determine whether the 

numbers of uninsured parents and children have been reduced or whether 

parents’ obligations to provide health care coverage are being met. 
CHAPTER 8

Medical Child Support Working Group Report Page 8-13 

established to promote health care coverage 

of children. In many States there are 

multiple programs that overlap, including 

those that focus almost exclusively on 

children. Some form of family health 

coverage exclusively for children is 

available in all 50 States, but options for 

coverage are limited and prices vary widely 

between markets. States may develop their 

own tax incentives for health care coverage 

by employers and/or individuals but not 

understand how the incentives and State 

programs interact. Reviews of programs 

and other provisions at both the State and 

Federal level could be used to correct 

individual problems, clarify confusion and 

misunderstandings, and identify gaps in 

coverage or services. These findings should 

feed back into the deliberations of the 

broader policy coordination efforts. #See 

Recommendation 73.

Containing Health Care Cost 

Private family health coverage is a very 

cost-sensitive benefit, both for employers 

and employees. If efforts to expand private 

coverage for children and to enroll children 

in public health care programs when private 

coverage is not an option are to be 

successful, then all stakeholders, including 

the general public as taxpayers, need to be 

concerned about containing health care 

costs. The Working Group makes two 

recommendations, which it believes could 

have a long term positive impact on 

ensuring health care coverage for children; 

the first is on consumer education and 

preventive health care and the second is on 

the need for review of certain tax policies. 

Consumer Education and 

Preventive Health Care 

One cost containment strategy is to 

encourage consumer education and 

preventive health measures. Some programs 

already have been implemented successfully 

by civic groups and health care providers. 

For example, former Surgeon General C. 

Everett Koop, with Senator Robert Graham 

and HHS/HCFA, began promoting 

preventive health measures—from smoking 

$ A Preventive Health 

Program in the Private Sector 

Communication is key to promoting 

healthier lives, according to Linda 

Barnes, Director for Learning 

Services for Magic Valley (Idaho) 

Regional Medical Center, a regional 

county hospital serving an eightcounty area. The hospital has 

implemented or participated in 

programs, such as the following: (1) 

safety education focused on 

children; (2) education on helping 

diabetics follow a healthy diet, 

which helps prevent costly 

hospitalization; (3) cardiac risk 

programs; (4) implementation of a 

diagnostic cardiac laboratory and 

cardiac rehabilitation (case 

management) program; and (5) free 

mammograms. 
CHAPTER 8

Page 8-14 Medical Child Support Working Group Report 

cessation to dieting and exercise—as 

important health care initiatives. 

Community education programs could be 

established to help inform individuals of 

such matters as how the health care system 

works, how individuals and their demand for 

services affects delivery and costs, how to 

shop for health care, and how to assess 

appropriate levels of care. Fee schedules 

that allow “comparison shopping” could be 

published with respect to fees charged by 

physicians, clinics, hospitals, and other 

health care providers. Quality measures, 

such as health care outcomes or other factors 

that can be used to assess care and 

efficiencies accurately, could be made 

available to the public. Employees, 

employers, and other health plan sponsors 

can use such data for comparison shopping 

for the most cost-effective health care 

coverage. These types of efforts could help 

lower overall health cost, thus ensuring 

affordability for both employers and 

employees. #See Recommendation 74.

Review of Tax Policy

Favorable tax treatment can help reduce 

health care costs. Tax policy does not 

always seem consonant with health care 

policy. The Working Group recognized 

technical analysis of the tax laws would be 

beyond its scope, but believed such an 

objective analysis and a broad dissemination 

of funding to trade and bar associations, 

civic organizations, employer groups and 

other outlets, including the courts and IV-D 

agencies, would be important to the overall 

success of expanding health care coverage 

for children. Additionally, the Working 

Group identified specific examples of tax 

policies that seemed inconsistent with 

containing cost and promoting expansion of 

#Recommendation 74 (Technical Assistance) 

The HHS should collaborate with the DOL, Department of Education, and other 

Federal agencies involved in health care, health care benefits, child support, 

and tax policies, to develop consumer education programs in order to help 

contain health care costs. 

These consumer education programs could be promoted through tax 

incentives, grants, private foundation awards, and advocacy groups. The 

programs would focus on: 

♦ The availability and types of health care programs available to children (and 

would target the parents of uninsured children) 

♦ Consumer education that will allow the market to help control health care 

costs, such as developing literature on efficacy and cost of generic and 

brand-name drugs 

♦ Civic health education, screening and preventive programs, civic risk 

education programs, and healthful life-styles programs. 
CHAPTER 8

Medical Child Support Working Group Report Page 8-15 

private family health coverage that should 

be addressed. 

Noncustodial parents are not the only adults 

who assume responsibility for providing 

dependent health care coverage. Sometimes 

stepparents, grandparents, or other family 

members step forward to fill the health care 

coverage gap for children. The current 

Internal Revenue Code, however, may not 

recognize the covered children as 

“dependents.” It is the understanding of 

members of the Working Group that if an 

individual includes a child (who does not 

meet the Code definition of dependent) 

under coverage provided by the individual’s 

employer, that individual may have to 

include the value of that child’s coverage in 

gross income as reported for tax purposes.6

 

This requirement may disadvantage a person 

who voluntarily enrolls a child in employerprovided coverage. A review such as the 

one contemplated by the Working Group 

could help clear up confusion regarding this 

and similar issues and make sure that 

families are not penalized for doing the 

“right thing” for children. #See 

Recommendation 75.

The tax laws currently provide favorable 

treatment for costs incurred in medical 

treatment, but do not similarly treat costs 

incurred in activities that promote general 

health and well-being. The Working Group 

considered the example of smokingcessation programs, which in the past were 

viewed as merely promoting general wellbeing, but which recently have been 

recognized as relating more directly to a 

#Recommendation 75 (Legislative Action) 

Amend Tax Code to Extend Exclusion: The exclusion from income for health 

care costs under §105 and §106 should be extended to step-parents, 

grandparents, and other individuals who accept responsibility for obtaining or 

providing health care coverage for children, regardless of whether the child 

qualifies as a dependent of that individual under other provisions of the tax 

code. 

$ Federal Tax Policy & Family 

Health Coverage 

A parallel consideration in the mission 

to secure health care coverage for 

children residing in single-parent 

households is Federal tax policy. The 

size and availability of tax incentives for 

employers who provide dependent care 

benefits may drive their decision to offer 

family health coverage or to increase 

their contributions to premiums for such 

coverage. In addition, the Internal 

Revenue Code does not equitably 

account for expenditures on a child’s 

health care needs by someone other than 

the custodial parent. As with employers, 

tax incentives may foster cooperation, 

particularly by the noncustodial parent. 
CHAPTER 8

Page 8-16 Medical Child Support Working Group Report 

!HIPAA 

Health Insurance 

Portability and 

Accountability Act of 

1996 

!COBRA 

Consolidated 

Omnibus Budget 

Reconciliation Act of 

1985 

medical condition. Such smoking cessation 

programs generally reduce health-risk 

factors. It is the Working Group’s 

understanding that individuals generally 

may not deduct the cost of participating in 

such programs, and that an employee being 

reimbursed by an employer for such 

participation must include these amounts in 

gross income. A review, such as the one 

recommended by the Working Group, could 

help change tax policy to encourage health 

promotion as well as medical treatment. 

An examination of the Internal Revenue 

Code is essential to fully assess these and 

other health care issues that can be 

addressed more clearly in the Code. 

Furthermore, the manner in which the 

Department of Treasury and the Internal 

Revenue Service address health care issues 

within their purview, such as COBRA 

conversion and HIPAA coverage, should 

also be evaluated to ensure they comport 

with over-arching health policy goals. 

#See Recommendation 76.

Continued improvement in health care 

coverage for children will not happen unless 

there are ongoing efforts to develop new 

strategies and new approaches that are 

responsive to the trends and changes in 

society-at-large. How to develop seamless 

coverage, so that child support-eligible 

children do not fall through the health care 

system’s cracks, as they move between 

different private coverage plans, between 

public and private coverage, and between 

types of public coverage is an important 

#Recommendation 76 (Administrative Action) 

The Administration should establish an interagency group to evaluate the 

impact of tax and health care policy on the provision of children’s health care 

coverage. This group, drawn from the Federal Departments of Treasury, Health 

and Human Services, and Labor should recommend and help develop tax laws 

that support the goal of securing health care coverage for all children. 

♦ The interagency group should consider the impact of tax and health care 

policies upon health care costs, medical insurance costs, and children’s 

access to health care services, with special emphasis on those children 

who live with a single parent. 

♦ In order to reduce heath care costs and make medical insurance more 

affordable, the interagency group should consider granting tax incentives to 

preventive programs, such as health and safety programs. 

♦ The interagency group also should evaluate tax and health care policies, 

with an aim to proposing legislation and developing regulations that 

promote individual awareness and responsibility for improving health and 

reducing health risks. The group might recommend Federal tax incentives 

for programs that promote proper diet, self-administered care, and exercise 

programs for diabetic children. 
CHAPTER 8

Medical Child Support Working Group Report Page 8-17 

task. Undertaken jointly by the child 

support and public health communities and 

their private sector partners—employers, 

plan administrators, and the health insurance 

industry–research and demonstrations will 

help us identify and implement these new 

approaches. But just as important is the 

need for society to work together to develop 

new strategies and new approaches for 

containing health care costs. The overall 

growth in health care costs remains a 

constraint on efforts to increase health care 

coverage for the uninsured. Both the private 

and public sectors need to take leadership in 

promoting preventive health measures as 

important health care initiatives, enhancing 

employers’ and employees’ ability to 

provide health care coverage for children, 

and developing coordinated and consistent 

health care policy. Our children deserve no 

less, for they are our shared responsibility.

“Ask any insurer which kid he wants 

to insure when they become an adult: 

the one who's had access to health 

care all the way through or the one 

who hasn't... [T]he kids win, you win, 

and the insurers win... [T]he nation 

wins because we've reduced future 

health care costs.” 

~Theodore R. Earl, Jr., Registered 

Representative, John Hancock, Inc. 
CHAPTER 8

Page 8-18 Medical Child Support Working Group Report 

Endnotes 

 

1 The Employer’s Desk Guide to Child Support, 

U.S. Department of Health and Human Services, 

Government Printing Office, Washington DC, 

(August 1999). 2

 42 U.S.C. §452(f). 

3

 42 U.S.C. §1397bb(b)(3)E). 

4

 O’Brien, Ellen and Judith Feder, How Well 

Does the Employment-Based Health Insurance 

System Work for Low-Income Families? Kaiser 

Commission on Medicaid and the Uninsured 

(September 1998); GAO, 1998; and Wheaton, 

Laura, “Noncustodial Fathers: To What Extent 

Do they Have Access to Employment Based 

Health Care Coverage?” The Urban Institute 

(forthcoming, June 2000). 

5

 1996 March-April Match File Current 

Population Survey. See data tabulations in 

APPENDIX D: Health Care Coverage for Child 

Support-Eligible Children, page A-32. 

6

 Sections 105 and 106 of the Internal Revenue 

Code relate to the taxability of employer 

contributions to, and employee benefits received 

from, group health plans, and incorporate by 

reference the term “dependent” as defined in 

§152 of the Internal Revenue Code of 1986. 
CHAPTER 9

Medical Child Support Working Group Report Page 9-1 

CHAPTER 9.

Conclusion/Postscript

The current medical support enforcement 

system is ineffective. Modeled on outdated 

assumptions, it does not reflect present 

realities that limit the availability, 

affordability, and stability of dependent 

health coverage. The recommendations 

contained in this report will greatly reduce 

impediments to medical support 

enforcement and establish a new paradigm, 

ensuring that all 21 million IV-D eligible 

children have accessible, comprehensive, 

and seamless health care coverage. 

The Working Group recognizes that all 

proposed solutions cannot be implemented 

immediately. Nor can they be accomplished 

at all without the coordinated commitment 

of the public and private sectors—a 

partnership forged on our shared 

responsibility to America’s children. 

Reforms will cost money. To some degree 

our recommendations require financial 

contributions from parents, employers, and 

the private insurance industry, in addition to 

government. They also require time, 

dedication, innovation, and flexibility, as 

these solutions are tested and even better 

ideas evolve from the research. Mostly, just 

as the Working Group developed consensus 

from disparate interests and legitimate 

competing concerns, so too must society 

forge a consensus to ensure that health care 

is a reality for all America’s children. 

APPENDIX A

Medical Child Support Working Group Report Page A-1 

Appendices

APPENDIX A: Next Steps - List of Recommendations Organized by

Type/Category

Federal Legislation 

Recommendation 6 (Federal Legislation) 

(See page 3-7) 

If the child is presently enrolled in either parent’s private health care coverage and the coverage is 

accessible to the child, that coverage should be maintained. If, however, one of the parents has 

more appropriate coverage (as determined in accord with Recommendation 8 through 

Recommendation 11) and either parent requests that the child be enrolled in this plan, the 

decision maker shall determine whether or not to maintain the existing coverage based upon the 

best interests of the child. 

Recommendation 13 (Federal Legislation) 

(See page 3-20) 

After determining that a child is not enrolled in private health care coverage, and that at least one 

parent could enroll the child in private coverage, the decision maker should determine which plan 

is most appropriate for the child (as defined in Recommendation 8) by evaluating the plan(s) in 

the following manner: 

Step 1. Determine whether the child has access to the services provided under the coverage. 

Step 2. Determine whether the cost of the coverage is reasonable. 

Step 3. Determine whether the coverage is comprehensive. 

Step 4. If, after following steps 1-3, the decision maker finds that only the custodial parent has 

accessible, affordable, and comprehensive coverage, that coverage should be ordered, with 

appropriate allocation of cost, as determined by the State child support guidelines. (See 

Recommendation 2) 

If, after following steps 1-3, the decision maker finds that only the noncustodial parent has 

accessible, affordable, and comprehensive coverage, that coverage should be ordered, with 

appropriate allocation of cost, as determined by the State child support guidelines. (See 

Recommendation 2) 
APPENDIX A

Page A-2 Medical Child Support Working Group Report 

Step 5. If, after following steps 1-3, it is determined that accessible, affordable, comprehensive 

coverage is available to both parents, then coverage available to the custodial parent should be 

ordered unless (1) either parent expresses a preference for coverage available through the 

noncustodial parent; or (2) the noncustodial parent is already carrying dependent’s coverage for 

other children, either under a child support order for those children or because the children reside 

in his current household, and the cost of contributing toward the premiums associated with the 

custodial parent’s coverage is significant. If either of the exceptions applies, the decision maker 

should make an assessment of what is in the best interests of the child and order coverage 

accordingly. 

If neither parent has family health coverage, see Recommendation 14 and Recommendation 15.

Recommendation 16 (Federal Legislation) 

(See page 3-25) 

To facilitate enrollment of eligible children in public coverage, Federal law should require State 

IV-D agencies to: (1) provide parents with information about the Medicaid and SCHIP programs, 

as well as any other subsidized coverage that may be available to the child; and (2) refer the 

family to the appropriate program for possible enrollment. 

Recommendation 17 (Federal Legislation) 

(See page 3-26) 

Congress should amend §1920A of the Social Security Act to include IV-D agencies among the 

“qualified entities” that may enroll children in Medicaid for a presumptive eligibility period, 

based on preliminary information that indicates that the child is income-eligible for Medicaid. 

Recommendation 19 (Best Practice, Federal Legislation) 

(See page 3-28) 

Part A (Best Practice): States should grant authority to the decision maker to order the 

noncustodial parent to contribute toward the State cost of providing coverage under Medicaid and 

SCHIP. Provided, however, no contribution should be ordered from any noncustodial parent 

whose net income (as defined by the State to determine Medicaid eligibility) is less than 133 

percent of poverty. 

Part B (Federal Legislation): Congress should amend §467 of the Social Security Act to provide 

that the amount the noncustodial parent may be ordered to contribute toward the monthly cost of 

coverage under Medicaid or SCHIP shall be the lesser of: (1) the estimated cost of enrolling the 
APPENDIX A

Medical Child Support Working Group Report Page A-3 

child in Medicaid or SCHIP; (2) five percent of the noncustodial parent’s gross income; or (3) the 

amount indicated by a sliding fee schedule, developed by the State, which takes into account 

ability to pay and average Medicaid/SCHIP costs for dependent children. 

Recommendation 20 (Federal Legislation) 

(See page 3-31) 

Congress should amend Title IV-D of the Social Security Act to preclude State IV-D agencies 

from attempting to recover Medicaid-covered prenatal, birthing, and perinatal expenses from the 

noncustodial parent. 

Recommendation 35 (Federal Legislation) 

(See page 4-11) 

Congress should enact legislation requiring health care plans to send a copy of any COBRA 

notice related to a child’s loss of health coverage to the State IV-D agency if the health care plan 

received any QMCSO, including the National Medical Support Notice for that child, from the 

IV-D agency. 

Recommendation 42 (Federal Legislation) 

(See page 4-14) 

Congress should enact legislation that would allow Federal agencies to enroll Federal employees 

and their dependents in the Federal Employees Health Benefits Program without the employee’s 

consent if the employee is ordered to provide such coverage for his or her dependent(s). 

Recommendation 43 (Federal Legislation) 

(See page 4-14) 

Congress should enact legislation to allow the U.S. military to enroll its employees and their 

dependents in Tri-Care without the employee’s consent if the employee is ordered to provide such 

coverage for his or her dependents. 

Recommendation 44 (Federal Legislation) 

(See page 5-5) 

When the decision maker requires the custodial parent to provide coverage for the children, the 

parent should verify that the children have been enrolled within a reasonable time, to be 

determined by the State. When the child support enforcement agency provides enforcement 

services, and the children are not enrolled as ordered, the child support enforcement agency 

should take appropriate steps to enforce the order against the custodial parent. However, any 
APPENDIX A

Page A-4 Medical Child Support Working Group Report 

notice that is sent to the parent should ask the custodial parent to contact the child support 

enforcement agency if she did not provide health care coverage because of some financial 

difficulty, a change in employment, other change in circumstances, and/or the noncustodial 

parent’s failure to comply with an order that required him/her to pay a portion of the premium. 

Recommendation 58 (Federal Legislation) 

(See page6-16) 

Congress should repeal §1902(a)(25)(F) of the Social Security Act to allow State Medicaid 

agencies to cost-avoid claims where the third party coverage is derived through a noncustodial 

parent’s obligation to provide medical coverage. 

Recommendation 62 (Federal Legislation) 

(See page 6-21) 

Congress should amend ERISA §701(f)(2)(A)(iii) to include children enrolled pursuant to a 

QMCSO among the categories of dependents who, if certain other requirements are met, must be 

given special enrollment rights. 

Recommendation 63 (Federal Legislation) 

(See page 6-23) 

Provided that Congress makes the following changes to §1908 of the Social Security Act (42 

U.S.C. §1396g-1), Congress should also amend §1908 to state explicitly that the laws it requires 

States to pass as a condition of participation in the Medicaid program apply to all children 

(regardless of whether they are eligible for assistance under the State Medicaid plan), and should 

amend §609 of ERISA to incorporate the requirements of the amended §1908. The necessary 

changes are: 

♦ Clarify that a child who is in enrolled in a group health plan pursuant to a court or 

administrative order could be disenrolled under circumstances under which other dependent 

children would lose coverage (for example, elimination of family health coverage for all 

employees in the same business unit or job category). 

♦ Amend §1908(a)(1) to provide that, if there is no QMCSO, a child would be enrolled only if 

the participant enrolls or consents to the enrollment of the child. 

Recommendation 65 (Federal Legislation) 

(See page 7-6) 

Congress should amend Federal law to provide for 90 percent enhanced Federal Financial 

Participation to State IV-D agencies for a five-year period to facilitate the implementation of the 
APPENDIX A

Medical Child Support Working Group Report Page A-5 

Title IV-D medical support requirements, contained in §401 of CSPIA 1998, and additional 

Federal requirements that result from the Working Group’s recommendations. This funding may 

be capped. 

Recommendation 66 (Federal Legislation) 

(See page 7-8) 

Congress should amend Federal law to require that the medical support incentive measure is 

developed in conjunction with the implementation of CSPIA 1998 §401 requirements and 

additional requirements that may be imposed by law or regulation, based on the recommendations 

of the Working Group. The measure should also take into account the findings of the research 

and demonstration grants undertaken by States and funded by HHS. 

Recommendation 67 (Federal Legislation) 

(See page 7-10) 

Congress should amend Federal law to require HHS to publish the medical support performance 

incentive measure in final form within three years of the date the 90 percent FFP goes into effect. 

Implementation of the medical support performance incentive measure shall begin upon 

publication, including the collection and submission by the States to OCSE of all data necessary 

to calculate the measure. The medical support performance incentive measure shall be included 

in the calculation of incentive payments due States beginning 2 years after publication. This fiveyear time period shall run concurrent with that set forth in Recommendation 65 (Federal 

Legislation). 

Recommendation 72 (Federal Legislation) 

(See page 8-11) 

The Administration should convene a national policy and coordination group that will act through 

the Federal agencies to provide oversight on health care programs that affect children. The policy 

group should establish a mechanism or process to encourage dialogue and ensure coordination on 

health care program issues, especially those impacting children. This process will ensure that 

interested groups, such as Child Support Enforcement, providers, and payers, help in developing 

and implementing national objectives concerning health care coverage for children. The group 

will help ensure that policies, objectives, guidelines, and regulations are consistent, and that these 

initiatives are designed with consideration for their impacts on all affected parties. 
APPENDIX A

Page A-6 Medical Child Support Working Group Report 

Recommendation 75 (Legislative Action) 

(See page 8-15) 

Amend Tax Code to Extend Exclusion: The exclusion from income for health care costs under 

§105 and §106 should be extended to step-parents, grandparents, and other individuals who 

accept responsibility for obtaining or providing health care coverage for children, regardless of 

whether the child qualifies as a dependent of that individual under other provisions of the tax 

code. 

Federal Regulation 

Recommendation 1 (Federal Regulation) 

(See page 3-3) 

The HHS should require each State to maximize the enrollment of children in appropriate health 

care coverage; the first recourse should be appropriate private coverage of either parent. 

(“Appropriate coverage” is defined in Recommendation 8.)

Recommendation 2 (Federal Regulation) 

(See page 3-4) 

Each State’s child support guidelines should show how the cost of health care coverage will be 

allocated between the parents. 

Recommendation 3 (Federal Regulation) 

(See page 3-5) 

Each State should develop mechanisms that require both parents to disclose information about 

actual and potential private health care coverage in order to help the decision maker determine 

whether private coverage is available to either parent. 

Recommendation 4 (Federal Regulation) 

(See page 3-5) 

States should use existing automated databases providing information about private health care 

coverage available through employers or use insurers’ databases. Such databases need not 

contain information about the types of benefits offered, only whether dependent coverage is 

offered by an employer. For further details about the development of or modification to such 

databases, see Recommendation 64. 
APPENDIX A

Medical Child Support Working Group Report Page A-7 

Recommendation 8 (Federal Regulation) 

(See page 3-10) 

If a child is not enrolled in private coverage, the decision maker shall determine whether one or 

both parents are able to obtain appropriate coverage for the child based on three factors: (1) 

comprehensiveness of the plan, (2) access to services, and (3) affordability. Each factor should 

be assessed individually and then considered together in accord with Recommendation 13. 

If a child has special needs, the decision maker should consider this circumstance in conjunction 

with the needs of the primary plan member and other dependents (see Recommendation 12).

Coverage is comprehensive if it includes at least medical and hospital coverage; provides for 

preventive, emergency, acute, and chronic care; and imposes reasonable deductibles and copayments. In determining which coverage is more comprehensive when both parents have such 

coverage, the decision maker should consider the following: basic dental coverage, orthodontics, 

eyeglasses, mental health services, and substance abuse treatment. 

Coverage is accessible if the covered children can obtain services from a plan provider with 

reasonable effort by the custodial parent. When the only health care option available through the 

noncustodial parent is a plan that limits service coverage to providers within a defined geographic 

area, the decision maker should determine whether the child lives within the plan’s service area. 

If the child does not live within the plan’s service area, the decision maker should determine 

whether the plan has a reciprocal agreement that permits the child to receive coverage at no 

greater cost than if the child resided in the plan’s service area. The decision maker should also 

determine if primary care is available within the lesser of 30 minutes or 30 miles of the child’s 

residence. If primary care services are not available within these constraints, the coverage should 

be deemed inaccessible. In lieu of the 30 miles/30 minutes standard, States may adopt an 

alternative standard for time and distance, such as the standard that the State uses to administer 

programs such as Medicaid managed care services or to regulate managed care provider 

networks. 

In determining accessibility, the decision maker should also assess whether one can reasonably 

expect the coverage to remain effective for at least one year, based on the employment history of 

the parent who is to provide the coverage. 

Reasonable cost should be assessed based on Recommendation 9 through Recommendation 11. 
APPENDIX A

Page A-8 Medical Child Support Working Group Report 

Recommendation 9 (Federal Regulation) 

(See page 3-14) 

The Federal regulation that deems all employment-related or group-based coverage to be 

reasonable in cost should be replaced with a standard based on the cost of coverage relative to the 

income of the parent who provides the coverage. Except as noted in Recommendation 10 and 

Recommendation 11, if the cost of providing private coverage does not exceed five percent of the 

gross income of the parent who provides coverage, then the cost should be deemed reasonable. 

Recommendation 21 (Federal Regulation) 

(See page 3-32) 

The States should give the decision maker authority to order either or both parents to contribute 

toward: (1) the cost of any co-payments, deductibles, or costs associated with the ordered health 

care coverage; and (2) any uncovered medical expenses incurred by the child. 

Recommendation 22 (Federal Regulation) 

(See page 3-33) 

To the extent that unreimbursed costs are not included in the State’s basic child support guideline 

formula, those costs should be apportioned pro rata between the parties. 

Recommendation 29 (Federal Regulation) 

(See page 4-8) 

HHS and DOL should publish the National Medical Support Notice in final form no later than 

September 1, 2000 to allow States sufficient time to implement automated processes by October 

1, 2001. 

Recommendation 36 (Federal Regulation) 

(See page 4-12) 

If some or all of the options under a health care plan are limited to specified geographic service 

areas, such as those covered by specific zip codes, then: 

♦ The plan administrator should indicate that geographic restrictions apply and should provide 

information that would make it possible for the IV-D agency to determine whether the 

coverage is accessible to a child (see Recommendation 8). 

♦ The plan administrator should be instructed to enroll the child—unless the IV-D agency 

requests that a child not be enrolled—even if the only available plan coverage is 

geographically limited and the child is outside the plan’s service area. 
APPENDIX A

Medical Child Support Working Group Report Page A-9 

Recommendation 37 (Federal Regulation) 

(See page 4-12) 

If the plan administrator cannot determine a child’s zip code or location from the Notice because 

a Substitute Official’s address is used, the plan administrator should be instructed to contact the 

IV-D agency and provide sufficient information to permit the agency to decide whether or not the 

coverage is accessible as defined in Recommendation 8. 

Recommendation 39 (Federal Regulation) 

(See page 4-13) 

If an employee is in a waiting period that will expire within 90 days after the receipt date of the 

Notice, then the plan administrator should: (1) determine whether the Notice is a qualified order, 

and (2) notify the IV-D agency and the parents of the date on which coverage will begin. 

If the waiting period expires more than 90 days after the receipt of the Notice, or if the duration of 

the waiting period is determined by some measure other than the passage of time (for example, 

the completion of a certain number of hours worked), then once the plan administrator has 

determined that the Notice is a qualified order, the plan administrator would describe the waiting 

period on the portion of the Notice returned to the IV-D agency (Part B), and the employer would 

notify the plan administrator when the employee is eligible to enroll in the plan and when a 

NMSN is in effect with respect to one or more children of the employee. The plan administrator 

then notifies both parents. 

Recommendation 45 (Federal Regulation) 

(See page 5-6) 

The Secretaries of HHS and DOL should request the Department of Commerce to review the 

current provisions of the Consumer Credit Protection Act, which specifies limits on wage 

garnishment for family support payments, 15 U.S.C. §167(b)(2)(A) and (B). The Department 

should clarify whether the lower wage garnishment applies only to individuals who have an order 

to support a spouse or one or more children outside of their households and are also supporting a 

spouse and/or child within their household. 

Recommendation 49 (Federal Regulation) 

(See page 5-11) 

A Federal policy on the priority of allocation by employers of funds collected through wage 

withholding should be promulgated. Employers should first attribute withheld funds to current 

cash support (alimony and child support), then to health care premiums and other current medical 
APPENDIX A

Page A-10 Medical Child Support Working Group Report 

support, then to arrears (cash or medical) and then to other obligations. Decision makers should 

have the flexibility under State law to deviate on a case-by-case basis and provide that health care 

premiums will be paid first when that is in the best interest of the child. 

Recommendation 52 (Federal Regulation) 

(See page 6-7) 

HCFA should issue SCHIP regulations that allow a child to be eligible for SCHIP if the child is 

enrolled in a group health plan but does not have reasonable access to care under that plan. 

Recommendation 61 (Federal Regulation) 

(See page 6-21) 

The DOL should issue regulation(s) that make it clear that ERISA §701(f)(1)(C)(ii) (special 

enrollment for individuals losing other coverage) permits a child to be specially enrolled in a new 

plan, after prior coverage obtained through a Qualified Medical Child Support Order (QMCSO) is 

terminated, if the coverage ends during the period covered by the order or at the end of the period 

covered by the order. This would permit a child to enroll in other available coverage provided by 

either parent, if coverage is terminated for some reason related to the medical support order. 

Recommendation 64 (Federal Regulation) 

(See page 6-24) 

The term “family health coverage” should be defined in regulations and guidelines to include 

health coverage that provides benefits to dependents, including a dependent-only policy. 

Federal Guidance 

Recommendation 5 (Federal Guidance) 

(See page3-6) 

To further expand the ability of IV-D agencies to obtain information about actual and potential 

health care coverage available to both parents, OCSE should inform these agencies that 

§466(c)(1)(C) gives the agencies the authority to request health care benefits information from 

employers before they establish a medical support order. In conjunction with this, the DOL 

should inform plan administrators subject to ERISA that they must respond to such IV-D requests 

when they are made for the purpose of drafting a Qualified Medical Child Support Order 

(QMCSO). (See Recommendation 29.) 
APPENDIX A

Medical Child Support Working Group Report Page A-11 

Recommendation 12 (Federal Guidance) 

(See page 3-16) 

The decision maker must consider a child’s special medical needs when deciding which form of 

private or public coverage is appropriate under Recommendation 8 through Recommendation 11. 

HHS should identify governmental agencies that are currently studying issues involving children 

with special needs and should coordinate with these agencies in the development of a common 

definition of “special needs” children. HHS should provide guidance to State IV-D agencies on 

how best to use the decisionmaking matrix set out in Recommendation 13 when a special needs 

child is involved. 

HCFA should require Medicaid agencies to identify whether there is a special needs child in any 

case they refer to the IV-D program pursuant to the child support cooperation requirement of the 

Medicaid program. 

Recommendation 18 (Federal Guidance) 

(See page 3-26) 

Provided that Congress amends the Social Security Act to allow State IV-D agencies to 

presumptively enroll children in Medicaid, OCSE and HCFA should strongly encourage all States 

to exercise this option or to take other steps to facilitate Medicaid enrollment, including placing 

Medicaid or SCHIP staff in IV-D offices, providing application forms to potentially eligible 

families, and arranging eligibility appointments. 

Recommendation 25 (Federal Guidance) 

(See page 3-34) 

To facilitate implementation of Recommendation 24, the DOL and HHS should develop model 

language regarding health care coverage for inclusion in child support orders. The model 

language, which would not be mandatory, would alert attorneys, child support workers, and court 

personnel to common issues that should be addressed in such orders. 

Recommendation 27 (Federal Guidance) 

(See page 4-4) 

DOL and HHS should: (1) make it clear that the Notice is deemed to be a Qualified Medical 

Support Order only if issued by IV-D agencies, and (2) explain how the QMCSO process works 

for private parties. (See Recommendation 25) 
APPENDIX A

Page A-12 Medical Child Support Working Group Report 

Recommendation 33 (Federal Guidance) 

(See page 4-9) 

The DOL should inform employers, insurers, and plan administrators that when a noncustodial 

parent carries health care coverage for a child, and the provider of services or the custodial parent 

of such child submits the claim, 42 USC §1396g(a)(5) requires the insurer to pay the person or 

entity that submits the claim to the same extent the employee is entitled to be paid. 

Recommendation 40 (Best Practice/Guidance/Technical Assistance/Notice 

Comments) 

(See page 4-14) 

Where the court determines that a pattern of misappropriation of insurance payments exists, the 

court may, at its discretion, order the insurer to pay all claims for reimbursement directly to the 

provider of services. This provision should be binding on all parties. 

Technical Assistance/Education 

Recommendation 26 (Technical Assistance) 

(See page 3-34) 

Following adoption of the recommendations of the Medical Child Support Working group, DOL 

and HHS should provide training and technical assistance to courts to facilitate implementation of 

the recommendations, particularly those relating to the decision-making matrix and enrolling 

children in Medicaid and SCHIP. 

Recommendation 28 (Technical Assistance) 

(See page 4-5) 

The DOL and HHS should collaborate with State IV-D agencies and organizations representing 

employers, plan administrators, and payroll agents to develop automated State IV-D systems that 

can produce the National Medical Support Notices and distribute these Notices and their 

responses to affected parties. 

Recommendation 30 (Education/Technical Assistance) 

(See page 4-9) 

The DOL and HHS should develop strategies to educate and reach out to all categories of 

constituents who have a need for, or interest in, the National Medical Support Notice, including 

the following categories of constituents:

♦ American Bar Association 
APPENDIX A

Medical Child Support Working Group Report Page A-13 

♦ State and Local Bar Associations 

♦ State Courts 

♦ Private Attorneys 

♦ American Payroll Association 

♦ Child Support Organizations (NCSEA, ERICSA, WICSEC) 

♦ National Coordinating Committee for Multi-employer Plans 

♦ AFL-CIO 

♦ International Foundation of Employee Benefit Plans 

♦ Association of Private Pension and Welfare Plans 

♦ ERISA Industry Committee 

♦ Society of Professional Benefit Administrators 

♦ National Association of Insurance Commissioners 

♦ Society for Human Resource Management 

♦ Native American Tribes 

♦ Federal Government 

♦ Military 

♦ Faith-Based Organizations 

♦ State and local governments 

Recommendation 31 (Education and Technical Assistance) 

(See page 4-9) 

DOL and HHS should reach out to courts and administrative authorities to educate them 

regarding the Notice and the health coverage data required for completion. 

Recommendation 32 (Education/Technical Assistance) 

(See page 4-9) 

The DOL and HHS should draft an easy-to-understand booklet similar to HHS’s The Employer’s 

Desk Guide to Child Support and DOL’s booklet on Qualified Domestic Relations Orders 

(QDRO) under ERISA. The booklet should explain the National Medical Support Notice and the 
APPENDIX A

Page A-14 Medical Child Support Working Group Report 

DOL’s views and interpretations of ERISA’s Qualified Medical Child Support Order (QMCSO) 

provisions. 

Recommendation 34 (Technical Assistance) 

(See page 4-10) 

The DOL and HHS should develop and make available to States a suggested model “Notice of 

Release” that State IV-D agencies may issue to employers when a noncustodial parent’s 

obligation to provide health care coverage terminates. 

Recommendation 40 (Best Practice/Guidance/Technical Assistance/Notice 

Comments) 

(See page 4-14) 

Where the court determines that a pattern of misappropriation of insurance payments exists, the 

court may, at its discretion, order the insurer to pay all claims for reimbursement directly to the 

provider of services. This provision should be binding on all parties. 

Best Practice 

Recommendation 7 (Best Practice) 

(See page 3-9) 

DOL and HHS should request the NAIC to encourage insurance providers with limited coverage 

areas to enter coordination agreements under which children who are covered under a 

geographically inaccessible plan can obtain services from a plan that is geographically accessible 

to them. Child support enforcement should publicize the availability of such plans and encourage 

States to take into account the possibility that out-of-area coverage may be available when 

assessing whether a particular plan is accessible to the child. 

Recommendation 10 (Best Practice) 

(See page 3-15) 

No parent whose net income is at or below 133 percent of the Federal poverty level should be 

ordered to provide private coverage, unless that parent has access to private coverage that does 

not require an employee contribution to obtain coverage. 
APPENDIX A

Medical Child Support Working Group Report Page A-15 

Recommendation 11 (Best Practice) 

(See page 3-15) 

No parent whose resident child is covered by Medicaid, based on that parent’s income, should be 

ordered to provide private coverage, unless the parent has access to private coverage that does not 

require an employee contribution to obtain coverage. 

Recommendation 14 (Best Practice) 

(See page 3-22) 

When neither parent has access to private health care coverage at reasonable cost but a stepparent does, enrolling the children in the step-parent’s coverage should be considered under 

certain conditions. These conditions are: (a) the coverage is accessible to the children; (b) the 

step-parent is willing to provide such coverage; and (c) there are no employer/insurer constraints 

for enrollment of the child. 

When these conditions are met, the parent who is married to the step-parent should be ordered to 

provide health care coverage for the children. The order should specify that this obligation may 

be met by enrolling the children in the step-parent’s health care coverage. Moreover, the order 

must make it clear that if the obligated parent and the step-parent later commence proceedings for 

a separation or divorce, the obligated parent has responsibility for obtaining information about the 

cost and availability of COBRA coverage for the children and enrolling the children in this 

coverage. The order should also specify that if COBRA (or other) coverage is not available or 

affordable, the obligated parent must immediately seek modification of the medical provisions of 

the child support order. As an alternative, the custodial parent should seek publicly-funded 

coverage in order to minimize any lapse in coverage for the children. 

Recommendation 15 (Best Practice) 

(See page 3-24) 

When neither parent can provide comprehensive, accessible, affordable private health care 

coverage, the decision maker should explore the possibility of providing coverage to the child 

through Medicaid or the SCHIP. If the child is ineligible for Medicaid or SCHIP, the decision 

maker should explore whether there is any available lower-cost, child-only plan, such as 

Sacramento IV-D Kids. 
APPENDIX A

Page A-16 Medical Child Support Working Group Report 

Recommendation 19 (Best Practice, Federal Legislation) 

(See page 3-28) 

Part A (Best Practice): States should grant authority to the decision maker to order the 

noncustodial parent to contribute toward the State cost of providing coverage under Medicaid and 

SCHIP. Provided, however, no contribution should be ordered from any noncustodial parent 

whose net income (as defined by the State to determine Medicaid eligibility) is less than 133 

percent of poverty. 

Part B (Federal Legislation): Congress should amend §467 of the Social Security Act to provide 

that the amount the noncustodial parent may be ordered to contribute toward the monthly cost of 

coverage under Medicaid or SCHIP shall be the lesser of: (1) the estimated cost of enrolling the 

child in Medicaid or SCHIP; (2) five percent of the noncustodial parent’s gross income; or (3) the 

amount indicated by a sliding fee schedule, developed by the State, which takes into account 

ability to pay and average Medicaid/SCHIP costs for dependent children. 

Recommendation 23 (Best Practice) 

(See page3-33) 

Since the extent of unreimbursed costs is unknown at the time an order is established, each State 

should develop protocols that permit the court or administrative agency to reduce such expenses 

to a judgment based on the language of the order. These protocols should include time limits for 

the parent who has paid the expenses to claim reimbursement and time limits for the obligated 

parent to pay these expenses, as well as simple pro se procedures for making or contesting such 

claims. The protocols should also include procedures to enforce collection from the noncustodial 

parent. 

Recommendation 24 (Best Practice) 

(See page 3-34) 

State child support guidelines should require that the medical support provisions of a child 

support order for private or public health care coverage clearly explain the obligation of each 

parent in meeting the child’s health care needs. Although not necessary to be qualified under 

§609(a) of ERISA, orders should address, as fully as possible, each of the following issues: 

♦ The party (custodial or noncustodial parent) responsible for obtaining public or private health 

care coverage 

♦ The type of coverage to be obtained 
APPENDIX A

Medical Child Support Working Group Report Page A-17 

♦ The cost of premiums and the manner in which each parent will contribute to those premiums 

♦ The type of uncovered expenses for which the parties will share costs 

♦ The specific manner in which each parent will contribute to the cost of uncovered expenses 

♦ The designation of primary and secondary coverage in any case in which both parties are to 

provide health care coverage 

♦ The circumstances under which the obligation to provide health care coverage for the child 

will shift from one parent to the other 

Recommendation 38 (Best Practice) 

(See page 4-12) 

In situations in which the IV-D agency is advised that a choice is required with regard to plan 

options, the agency should do the following: 

♦ If there is a Medicaid assignment in effect, the IV-D agency should consult with the custodial 

parent and the Medicaid agency, review the State’s treatment of coverage under child support 

guidelines, choose the appropriate option consistent with the best interests of the child, and 

notify the plan. 

♦ If there is no Medicaid assignment in effect, the IV-D agency should contact the custodial 

parent regarding the options, review such options in light of the State’s treatment of coverage 

under the child support guidelines, ascertain the custodial parent’s choice, and notify the plan. 

Recommendation 40 (Best Practice/Guidance/Technical Assistance/Notice 

Comments) 

(See page 4-14) 

Where the court determines that a pattern of misappropriation of insurance payments exists, the 

court may, at its discretion, order the insurer to pay all claims for reimbursement directly to the 

provider of services. This provision should be binding on all parties. 

Recommendation 46 (Best Practice) 

(See page 5-7) 

The current Federal wage-withholding limits should be maintained, but the Federal OCSE should 

advise the States that they can set lower limits, as long as they are not so low that they make it 

impossible to order the parent to provide health care coverage, in addition to child support, when 

it is available at reasonable cost. 
APPENDIX A

Page A-18 Medical Child Support Working Group Report 

Recommendation 47 (Best Practice) 

(See page 5-8) 

In any case where the amount of the parent’s current child support payments exceeds Federal 

wage withholding limits, the decision maker should examine the calculation of the noncustodial 

parent’s disposable income to determine whether the parent is reducing their disposable income 

through excessive withholding or other reductions in gross income that are not contemplated by 

the Consumer Credit Protection Act (CCPA). 

Recommendation 48 (Best Practice) 

(See page 5-9) 

If the cost of providing private health care coverage increases a parent’s child support obligation 

so that the amount exceeds Federal wage-withholding limits, the decision maker should have the 

authority to direct the custodial parent to apply for the Medicaid or SCHIP. If the child is found 

eligible, the decision maker may require the noncustodial parent to contribute toward the cost of 

coverage consistent with Recommendation 19. 

Recommendation 55 (Best Practice) 

(See page 6-11) 

State child support enforcement and SCHIP agencies should establish effective ways of 

communicating with each other. 

Recommendation 56 (Best Practice) 

(See page 6-12) 

In IV-D cases, when coverage is provided through Medicaid or SCHIP and information provided 

by the parties or obtained through New Hire Reporting indicates that private dependent health 

care coverage may now be available, it should be determined whether that coverage is appropriate 

for the child (as defined in Recommendation 8). If private dependent health care coverage is 

available and appropriate, the order should be modified as needed and a National Medical 

Support Notice should be sent to the employer and the child should be enrolled. 

Research and Demonstration 

Recommendation 68 (Research and Demonstration) 

(See page 7-11) 

HHS should study the savings and cost avoidance to the Medicaid program when IV-D secures 

and enforces a medical child support order for private insurance for Medicaid-eligible children. 
APPENDIX A

Medical Child Support Working Group Report Page A-19 

HHS should also study alternate methodologies to supplement funding for the child support 

enforcement program based on such Medicaid program savings and avoided costs. If HHS does 

not have sufficient funds to meet the cost of such a study, it should seek an additional 

appropriation from Congress. 

Recommendation 69 (Research and Demonstration) 

(See page 8-4) 

The Federal OCSE should conduct a study of the 11 States that ask employers to submit health 

care coverage information as part of their New Hire Reporting process. The study should analyze 

the costs and benefits of these efforts from the point of view of employers and States, consider the 

privacy issues raised by such an information exchange, and identify any precautions taken to 

protect the privacy of case participants. The results shall be communicated to the States and to 

the Congress. 

If HHS does not have sufficient resources available to fund these studies and/or demonstration 

projects, the agency should seek an additional appropriation from Congress. 

Recommendation 70 (Research and Demonstration) 

(See page 8-6) 

HHS should undertake projects that will examine various aspects of the intersections of child and 

medical support enforcement. These projects will encourage States to implement the Working 

Group’s recommendations and promote further innovations to expand health care coverage for 

children. The projects may be, but should not be limited to, §1115 demonstrations and Child 

Support Enforcement State program improvement grants projects. These grants might examine 

issues such as: 

♦ States’ efforts to coordinate health care coverage availability between the Child Support, 

Medicaid, TANF, and SCHIPs programs 

♦ Best practices in establishing and enforcing private family health coverage 

♦ How automation/technologies can be used to improve medical child support enforcement and 

save tax dollars 

♦ States’ creative use of cross-program funding to promote medical support enforcement 

including, but not limited to, SCHIP block grant funds, PRWORA-related Medicaid matching 

funds, Federal TANF or States’ maintenance of effort funds (MOE), and other block grant 

funds 
APPENDIX A

Page A-20 Medical Child Support Working Group Report 

♦ The availability of private family health coverage to IV-D families with an emphasis on 

access, cost, and comprehensiveness of family health coverage 

♦ State-specific demographic and economic variables that impact performance and States’ 

ability to improve medical support enforcement performance 

If HHS does not have sufficient resources available to fund these studies and/or demonstration 

projects, the agency should seek an additional appropriation from Congress. 

Recommendation 71 (Research and Demonstration) 

(See page 8-10) 

The HHS should seek Congressional appropriation to fund demonstration projects for a minimum 

of three to five years to encourage states to adopt public-private partnership health care models 

for children who are eligible for IV-D services. The HHS should provide information to the 

States regarding how to establish a public-private model (such as Sacramento IV-D Kids) that is 

combined with SCHIP/Medicaid program to make private insurance available for individual 

children at a group rate. Model programs will have features such as the following:

♦ State IV-D Agencies will gain access to the SCHIP provider pool, making the SCHIP’s 

benefits, including dental and vision, accessible to a pool of children eligible for child support 

services at the reduced rate created by the increased population pool. 

♦ The target group will be children served by State child support enforcement agencies, 

regardless of income level, who do not have reasonable access to employer-provided 

insurance due to cost, access, continuity of coverage or other reasons. 

♦ Facilitators for the Model program will be stationed in family law courts, who will enroll 

children for coverage at the time the order for support is entered. The facilitator will 

communicate with the third-party administrator, who will facilitate all subsequent 

transactions between the third-party SCHIP and the children. 

♦ The efficacy of the court facilitator’s role in the Model program will be evaluated separately 

and as part of the whole Model. The separate evaluation will focus on the facilitator’s 

effectiveness in making families aware of various available health care programs and 

enrolling children in the most appropriate and cost-effective programs. 

♦ If the noncustodial parent’s income is higher than the SCHIP-based eligibility cut-off, a wage 

assignment for the full insurance premium will be issued. However, since the overall pool of 

children would include children covered by SCHIP, Medicaid, and the Model program, the 

“full premium” could be substantially less than the group rate secured by the IV-D Kids 

Program alone. If the noncustodial parent’s income and assets make the children ineligible 

for SCHIP, then the noncustodial parent will be able to buy into the equivalent of the SCHIP 

program by paying the premium required under the Model program. 

♦ Since the medical premium will be part of the child support order, a separate health care 

application process will not be needed. 
APPENDIX A

Medical Child Support Working Group Report Page A-21 

♦ Coordinating the third-party administrators of the Model program and the SCHIP program 

will create a system that provides children with seamless health care coverage throughout the 

life of the order, regardless of changes in the parents’ income levels. 

Administrative Action 

Recommendation 54 (Administrative Action) 

(See page 6-10) 

The Secretary of HHS should convene a Working Group to develop protocols for implementing 

the recommendations concerning the enrollment of IV-D children in public rather than private 

health care coverage, particularly in interstate cases. This group should be comprised of staff 

from OCSE, HCFA, the Office of the Secretary, State Child Support, Medicaid, and SCHIP 

agencies as well representatives of other appropriate agencies and the courts. 

Among the tasks of this Working Group should be: (1) determining the feasibility and 

advisability of developing and mandating the use of a standard notification system to transmit 

information between the State courts, child support enforcement agencies, and Medicaid and 

SCHIP agencies; (2) assessing the feasibility of each State creating a IV-D/Medicaid/SCHIP 

database to facilitate a standardized system for information exchange; and (3) exploring the 

possibility of administrative simplification between the IV-D, Medicaid, and SCHIP programs.

Recommendation 73 (Administrative Action) 

(See page 8-12) 

All Federal and State regulatory agencies should develop mechanisms for reviewing proposed 

health care programs and mandates and incorporating programs and mandates for subsequent 

periodic review. 

Review mechanisms should focus on: 

♦ Research designed to obtain information about how proposed programs or mandates may 

conflict with existing programs or mandates, especially those that will impact children. 

♦ Establish standards and goals for initiatives and mandates. For example, the number of 

uninsured children has been reduced by 20 percent (+/-). 

♦ Periodically review established programs, in accordance with standards and goals, such as the 

goal of cost-effectiveness, and determine whether and to what extent programs are achieving 

their intended purposes. For example, child support enforcement agencies should determine 

whether the numbers of uninsured parents and children have been reduced or whether 

parents’ obligations to provide health care coverage are being met. 
APPENDIX A

Page A-22 Medical Child Support Working Group Report 

Recommendation 76 (Administrative Action) 

(See page 8-16) 

The Administration should establish an interagency group to evaluate the impact of tax and health 

care policy on the provision of children’s health care coverage. This group, drawn from the 

Federal Departments of Treasury, Health and Human Services, and Labor should recommend and 

help develop tax laws that support the goal of securing health care coverage for all children. 

♦ The interagency group should consider the impact of tax and health care policies upon health 

care costs, medical insurance costs, and children’s access to health care services, with special 

emphasis on those children who live with a single parent. 

♦ In order to reduce heath care costs and make medical insurance more affordable, the 

interagency group should consider granting tax incentives to preventive programs, such as 

health and safety programs. 

♦ The interagency group also should evaluate tax and health care policies, with an aim to 

proposing legislation and developing regulations that promote individual awareness and 

responsibility for improving health and reducing health risks. The group might recommend 

Federal tax incentives for programs that promote proper diet, self-administered care, and 

exercise programs for diabetic children. 
APPENDIX B

Medical Child Support Working Group Report Page A-23 

APPENDIX B: Glossary

Beneficiary

A person designated by a participant, or by the terms of an employee benefit plan, who is or may 

become entitled to a benefit thereunder. (ERISA §3(8), 29 USC 1002(8)). 

Child support-eligible Children

Children whose parents have divorced, separated, or decided not to marry or live together. Not 

all child support-eligible children live in single-parent households; about 20 percent live in 

married step-parent families. Some child support-eligible children live with neither parent, 

staying instead with a guardian or in placement through foster care. 

Cost Avoidance

A method of avoiding payment of Medicaid claims when other insurance resources are available 

to the Medicaid beneficiary. Whenever the Medicaid agency is billed first, claims are denied and 

returned to the provider who is required to bill and collect from liable third parties. Cost 

avoidance also includes payment avoided when the provider bills the third party first. 

Custodial Parent

Person with legal custody and with whom the child lives; may be parent, other relative, or 

someone else. Sometimes called obligee. 

Group Health Plan

An employee welfare benefit plan that provides medical, surgical, hospital, or other health care 

benefits to participants or beneficiaries directly or through insurance, reimbursement, or 

otherwise (ERISA §607(1), 29 USC 1167(1)). 

Guidelines

A standard method for setting child support obligations based on the income of the parent(s) and 

other factors as determined by State law. 

IV-D Program

The Federal child support enforcement program, as established under Part D of Title IV of the 

Social Security Act. The IV-D program provides Federal funds to State Child Support 

Enforcement services operating under the Federal IV-D statute, regulations, and rules. 

Individuals who are receiving public assistance are required to cooperate with the IV-D program 

to establish and enforce a child support order. Individuals who are not receiving public assistance 
APPENDIX B

Page A-24 Medical Child Support Working Group Report 

may participate in the IV-D program by completing an application, and may be required to pay a 

nominal application fee, no greater than $25. 

IV-D Child Support Orders

Child support orders that are enforced by the State child support enforcement agency that must 

follow the requirements of Title IV-D of the Social Security Act. 

Insured Plan

An employee welfare benefit plan under which benefits are provided through a contract or policy 

between the plan and an insurance company, HMO, or similar entity. The policies or contracts 

through which such plans provide benefits, as well as the insurance company, HMO or similar 

entity, are subject to State insurance laws. 

Liable Third Party

Any individual, entity, or program that is, or may be, liable to pay all or part of the medical cost 

of any medical assistance furnished to a beneficiary under the approved State plan. This includes 

a group health plan as defined in §607(a) of ERISA, a service benefit plan, and a health 

maintenance organization. 

Medicaid

A jointly-funded, Federal-State health insurance program for certain low-income and needy 

people. It covers approximately 36 million individuals including children, the aged, blind and/or 

disabled, and people who are eligible to receive Federally-assisted income maintenance 

payments. 

Medical Child Support Order

A judgment, decree, or order issued by a court or administrative agency, including an 

administrative notice issued by such an agency, which has the force and effect of law, that 

provides for child support with respect to a child of a participant in a group health plan or 

provides for health benefit coverage to such child and relates to benefits under such plan. 

Generally, a “medical child support order” is the medical support component of a broader order 

for child support. (ERISA § 609(a)(2)(B), 29 USC § 1169(a)(2)(B)) 
APPENDIX B

Medical Child Support Working Group Report Page A-25 

Medical Support

Legal provision for payment of medical and dental bills. Can be either family health coverage or 

cash medical support. Note: States vary widely on what type of medical bills are included in this 

definition. 

Multiemployer Plan

A plan to which more than one employer is required to contribute that is maintained pursuant to 

one or more collective bargaining agreements between one or more employee organizations 

(generally, unions) and more than one employer. Such plans are also subject to certain rules of 

the Labor Management Relations Act. They are established and maintained pursuant to a joint 

board of trustees that is composed of equal numbers of employer and union trustees. Generally, 

contributions are made by employers pursuant to a formula contained in the collective bargaining 

agreement(s) based on the number of hours worked by union employees of the signatory 

employers. (ERISA §3(38)(A), 29 USC 1002(37)(A)) 

Noncustodial Parent

Parent who does not have primary custody of a child. Sometimes called obligor. Also known as 

“participant” for family health coverage purposes. 

Order

Direction of a magistrate, judge, or properly empowered administrative officer. 

Participant

An employee or former employee of employer, or a member or former member of an employee 

organization, who is or may become eligible to receive a benefit of any type from an employee 

benefit plan that covers employees of such employer or members of such organization, or whose 

beneficiaries may be eligible to receive any such benefit. (ERISA §3(7), 29 USC 1002(7)) 

Pay and Chase

A method used in which Medicaid pays the beneficiary’s medical bills and then attempts to 

recover from liable third parties. 

Plan Administrator

The administrator of a plan is the person specifically so designated by the plan’s organizational 

documents. If no administrator is specifically designated, then the administrator of the plan is the 
APPENDIX B

Page A-26 Medical Child Support Working Group Report 

plan’s sponsor. The plan administrator has several specific responsibilities under ERISA with 

respect to plan administration. (ERISA §3(16)(A), 29 USC 1002(16)(A)) 

Plan Fiduciary

ERISA generally defines a fiduciary to include someone with discretionary authority with respect 

to the administration of a plan, or the management of a plan or its assets. (ERISA §3(21), 29 

USC 1002(21)) 

Plan Sponsor

For a plan that is established or maintained by an employer or employee organization, the sponsor 

is the employer or employee organization. For a plan that is established or maintained by two or 

more employers or jointly by one or more employers and one or more employee organizations, 

the sponsor is the joint board or trustees or similar group of representatives of the parties who 

establish or maintain the plan. (ERISA §3(16)(B), 29 USC 1002(16)(B)) 

Preemption

In general, the doctrine that certain matters, either implicitly or by explicit expression of 

Congress, are of such a national, as opposed to local, character, that Federal laws supercede or 

take precedence over State laws. ERISA has a very broad explicit preemption of any State law 

that “relates to” an employee benefit plan, whether or not the State law conflicts with ERISA. 

(ERISA §514(a), 29 USC 1144(a)) 

Qualified Domestic Relations Order (QDRO)

A domestic relations order which creates or recognizes the existence of an alternate payee’s right 

to receive, or assigns to an alternate payee the right to receive, all or a portion of the benefits 

payable with respect to a participant under a pension plan, and that includes certain information 

and meets certain other statutory requirements. An alternate payee is a spouse, former spouse, 

child, or other dependent of the participant. (ERISA §206(d)(3), 29 USC 1056(d)(3)) 

Qualified Medical Child Support Order (QMCSO)

A medical child support order which creates or recognizes the existence of an alternate recipient’s 

right to receive benefits for which a participant or beneficiary is eligible under a group health 

plan, and that includes certain information and meets certain other statutory requirements. An 

alternate recipient is a child of a participant who is recognized under a medical child support 

order as having a right to enrollment under a group health plan with respect to the participant. 

(ERISA §609(a)(2), 29 USC 1169(a)(2)) 
APPENDIX B

Medical Child Support Working Group Report Page A-27 

Self-Insured Plan

An employee welfare benefit plan under which all benefits are paid either from the general assets 

of the sponsor of the plan, or from a trust into which the sponsor and/or participants have made 

contributions. Such plans generally are exempt from State law. 

State Children’s Health Insurance Programs (SCHIP)

The Balanced Budget Act of 1997 created a new children’s health insurance program under Title 

XXI of the Social Security Act which enables States to initiate and expand health insurance for 

uninsured children with family incomes too high for Medicaid but too low to afford private 

family coverage. The law allows States to expand coverage for children through a separate child 

health insurance program, through the Medicaid program, or through a combination of these 

programs. 

Temporary Assistance for Needy Families (TANF)

Time-limited assistance payments to poor families. The TANF program provides parents with 

job preparation, work, and support services to help them become self-sufficient. 

Uniform Reciprocal Enforcement Of Support Act And Uniform Interstate Family

Support Act (URESA and UIFSA)

Laws enacted at the State level that provide mechanisms for establishing and enforcing support 

obligations when the noncustodial parent lives in one State and the custodial parent and child(ren) 

live in another State. 
APPENDIX D

Page A-28 Medical Child Support Working Group Report 

APPENDIX C: Legislation

Legislative History of Major Medical Support Provisions 

1974: Pub. L. 93-406 The Employee Retirement Income Security Act of 1974 (ERISA). 

Regulated most privately sponsored pension plans and health benefit plans. Covered such 

health benefit plans regardless of whether benefits are provided through the purchase of 

insurance or from the sponsor’s or the plan’s general assets. Imposed health plan benefit 

requirements related to information which must be provided to plan participants and 

beneficiaries; internal procedures for determining benefit claims; and standards of conduct 

of those responsible for plan management. Included a broad “preemption” provision, 

which provides that unless one of the statutory exceptions applies, the provisions of 

ERISA supersede any State laws that relate to any covered plan. 

1975: Pub. L. 93-647 The Social Services Amendments of 1974. Created Title IV-D of the 

Social Security Act to establish the Child Support Enforcement Program, in which the 

Secretary of Health, Education, and Welfare (now Secretary of Health and Human 

Services) is charged with the responsibility for overseeing the operation of the new 

program, including the following major functions: establishing a parent locator service; 

establishing standards for State program organization, staffing, and operation; reviewing 

and approving State plans; providing technical assistance to States; maintaining records of 

program operations, expenditures, and collections; and submitting an annual report to 

Congress. Primary responsibility for direct program operations—including locating 

absent parents, establishing paternity, and securing support for individuals receiving 

AFDC—was assigned to States. Applicants and recipients for AFDC were required to 

assign their rights to child support to the State as a condition of eligibility. 

1977: Pub. L. 95-142 The Medicare-Medicaid Anti-Fraud and Abuse Amendments of 1977. 

Established a medical support enforcement program under which States could require 

Medicaid applicants to assign to the State their rights to medical support. State Medicaid 

agencies allowed to enter into cooperative agreements with any appropriate agency of any 

State, including the IV-D agency, for assistance with the enforcement and collection of 

medical support obligations. Incentives were made available to agencies making child 

support collections for States and to States securing collections on behalf of other States. 
APPENDIX D

Medical Child Support Working Group Report Page A-29 

1984: Pub. L. 98-378 The Child Support Enforcement Amendments of 1984. Mandated that 

all States enact statutes providing for such improved child support enforcement 

mechanisms as: (1) mandatory income withholding procedures; (2) expedited processes 

for establishing and enforcing support orders; (3) State income tax refund interceptions; 

(4) liens against real and personal property; (5) the formulation of guidelines for 

determining appropriate child support obligations and the distribution of guidelines to 

judges and other individuals with authority to establish obligation amounts; (6) 

establishment of medical support awards in addition to cash support awards; (7) allowing 

paternity actions any time prior to a child’s 18th birthday; and (8) submission of reports of 

support delinquency information to consumer reporting agencies. 

1988: Pub. L. 100-485 The Family Support Act of 1988. Judges and other officials required to 

use State guidelines for support awards unless they are rebutted by a written finding that 

applying the guidelines would be unjust or inappropriate in the case. Required States to: 

(1) meet Federal standards for the establishment of paternity beginning in FY 1992; (2) 

require all parties in a contested paternity case to take a genetic test upon request of any 

party; and (3) develop a Federally-approved, single, statewide automated data processing 

and retrieval system with the capacity to process IV-D cases statewide by October 1, 1995. 

(This deadline was later extended to October 1, 1997.) States were also encouraged to 

adopt a simple civil process for voluntarily acknowledging paternity and a civil procedure 

for establishing paternity in contested cases. 

1988: Pub. L. 101-239 The Omnibus Budget Reconciliation Act of 1989. Made permanent the 

requirement that Medicaid benefits continue for four months after a family loses AFDC 

eligibility as a result of collection of child support payments. 

1993: Pub. L. 103-66 The Omnibus Budget Reconciliation Act of 1993 (OBRA ‘93). 

Amended Title XIX of the Social Security Act by adding §1908 to require States to have 

laws prohibiting employers and insurers from denying enrollment of a child under a 

parent’s family health coverage plan due to various factors such as: the child being born 

out of wedlock, the child was not claimed as dependent on the parent’s Federal income tax 

return, or the child does not live with the parent or in the insurer’s service area. State Title 

XIX agencies were permitted to garnish wages, salary, or other employment income, and 

withhold State tax refunds from any person who is legally required by court or 

administrative order to offer coverage of health services costs to a child eligible for 
APPENDIX D

Page A-30 Medical Child Support Working Group Report 

medical assistance under Title XIX and who has received payment from a third party but 

has not reimbursed either the other parent or guardian of the child or the provider of the 

services. 

Also amended ERISA by adding §609 (29 U.S.C. §1169) which, among other things, 

requires covered group health plans to provide benefits in accordance with applicable 

requirements of “medical child support orders” that satisfy the statutory requirements 

contained in this section related to “qualified medical child support orders” (QMCSOs). 

For purposes of §609, a “medical child support order” was defined to mean a judgment, 

decree, or order issued by a court of competent jurisdiction which provides for child 

support with respect to a child of a health plan participant or for health coverage of a child 

of a participant, or which enforces a law relating to medical child support described in 

§1908 of the Social Security Act with regard to a group health plan. 

1996 Pub. L. 104-193 The Personal Responsibility and Work Opportunity Act of 1996. 

Established the requirement that States implement further expedited administrative 

procedures for establishing paternity and for establishing, modifying, and enforcing 

support obligations and develop and expand additional databases of State IV-D agencies. 

Also expanded the authority of IV-D agencies to act without obtaining an order from a 

judicial or administrative tribunal and required IV-D agencies to expand their use of 

administrative enforcement remedies, including income withholding, seizure of funds, 

statutory liens, voiding of fraudulent property transfers, license suspension, repayments, 

work requirements, credit bureau reporting, and passport revocations. All IV-D orders 

were required to include a provision for health care coverage. (Previously, IV-D agencies 

were required to simply petition for the inclusion of medical support in new and modified 

support orders when health care coverage was available to the noncustodial parent through 

employment-related or other group family health coverage.) States were also required to 

provide for a simple administrative process for enrolling a child in a new health plan 

involving the use of a notice of coverage, which operates to enroll a child in a new 

employer’s health plan. 

Also amended §609(a) of ERISA to expand the definition of “medical child support 

orders” to permit certain administrative orders to be considered QMCSOs if applicable 

requirements in §609(a) are satisfied. (This expanded definition permitted administrative 

agencies to issue QMCSOs, whereas previously only courts were allowed to do so.) 
APPENDIX D

Medical Child Support Working Group Report Page A-31 

1997 Pub. L. 105-33 The Balanced Budget Act of 1997. Created Title XXI of the Social 

Security Act to establish the State Children’s Health Insurance Program (SCHIP), which 

provides funds to States to enable them to initiate or expand the provision of child health 

assistance to uninsured children of low-income families. Established a flexible 

administrative framework that enables States to operate their respective SCHIP programs 

as an extension to the Medicaid Program, as a separate entity, or as a combination of these 

two approaches. 

1998 Pub. L. 105-200 The Child Support Performance and Incentive Act of 1998. 

Mandated that several actions be taken to improve medical support enforcement in the 

child support enforcement program, including: (1) the joint establishment of a Medical 

Support Working Group by the Secretaries of HHS and Labor to identify impediments to 

the effective enforcement of medical support by State IV-D agencies and submit to the 

Secretaries of HHS and Labor a report containing recommendations addressing identified 

impediments; (2) the joint development and promulgation of a National Medical Support 

Notice by the Departments of HHS and Labor, to be issued by State IV-D agencies as a 

means of enforcing health care coverage provisions contained in child support orders; (3) 

the joint development and issuance by the Departments of HHS and Labor of Federal 

interim and final regulations which include appropriate procedures for the transmission of 

the National Medical Support Notice to employers by State IV-D agencies; and (4) the 

joint submission by the Secretaries of HHS and Labor of a Report to Congress that 

addresses recommendations made by the Working Group and includes an assessment of 

the National Medical Support Notice. In addition, the HHS Secretary, in consultation with 

State IV-D Directors and representatives of children potentially eligible for medical 

support, was directed to develop a performance measure based on the effectiveness of 

States in establishing and enforcing medical support obligations and to make 

recommendations for the incorporation of the measure in a revenue neutral manner into 

the Child Support Incentive Payment System, no later than October 1, 1999. 
APPENDIX D

Page A-32 Medical Child Support Working Group Report 

APPENDIX D: Health Care Coverage for Child Support-Eligible Children

In this Report, 21 million children were considered to be potentially eligible for child support as 

of 1995. Child support-eligible children are children under age 19 whose parents are divorced, 

separated, or never-married (and not cohabiting). Children are considered eligible for support 

regardless of current child support award or custody status. About 17 percent of child supporteligible children live in a married two-parent household (with a custodial parent and step-parent). 

Age 18 was used as the upper age limit because most states limit mandatory parental obligations 

for support to children under age 18 or until completion of secondary school. Additionally, 

eligibility for employment-based dependent health care coverage and for public coverage often 

terminates around this age. It is recognized that some children older than 18 may continue to be 

eligible for child support (and for private or public health care coverage), depending on individual 

circumstances, such as adult disabled children or children attending college. In addition, some 

children under age 19 who do not live with either parent are also eligible for child support. 

However, national data does not allow us to identify these children. 

The tables below provide information on the status of children’s health care coverage. Data 

indicates that about 13 percent of child support-eligible children have at least two different kinds 

of coverage (such as multiple private, public and private, or private plus other insurance, such as 

CHAMPUS (health care for military dependents) during the course of a year. Coverage from any 

source may only be for part of the year. Children identified as being insured had some type of 

health care coverage during part or all of the year. Children identified as uninsured have no 

coverage during the entire year. Current data sources do not allow us to identify children who 

have coverage some part of the year and no coverage during other parts of the year. Therefore, 

these tables underestimate the number and percent of children who may not have coverage for 

some part of the year. 

The first four tables (Tables 1-1 through 1-4) provide information based on the child supporteligible population as of 1995. Table 1-1 provides information on the number of children with 

and without health care coverage by family income expressed as a percent of the poverty. Health 

care coverage includes private, public, and other coverage such as CHAMPUS (health care for 

military dependents). Tables 1-2 and 1-3 are elaborations of Table 1-1. Information is presented 

for child support-eligible children who live with one parent and for children who live in a step-
APPENDIX D

Medical Child Support Working Group Report Page A-33 

parent family. Table 1-4 provides information only for child support-eligible children with 

private coverage. In this table, income is expressed as a percent of the poverty and private 

coverage is broken down by provider source: from within the household (e.g., parent, stepparent), and from outside the household (most likely the noncustodial parent). For those children 

with private coverage, Medicaid and other coverage is also indicated. 

TABLE 1-1

Child Support-eligible Children by Poverty and Health Coverage Status 

(1996 CPS-CSS)

Total <100% 

poverty 

100% to 

<200% 

poverty 

200% to 

<300% 

poverty 

=>300% 

poverty 

Private 10.4m (49%) 1.6m (19%) 2.7m (51%) 2.6m (75%) 3.6m (84%) 

Public 8.6m (40%) 5.9m (72%) 1.8m (35%) .5m (14%) .4m (09%) 

Other .8 m (04%) .3m (04%) .24m (06%) .14m (05%) .14m (04%) 

Insured* 18.2m (86%) 7.1m (87%) 4.3m (81%) 2.9m (87%) 3.9m (91%) 

Uninsured** 2.9 m (14%) 1.1m (13%) 1.0m (19%) .45m (13%) .4m (09%) 

Total*** 21.1m 8.2m 5.3m 3.4m 4.2m 

* Insured at any time during the year. Total of children with private, public and other health care coverage greater 

than total insured because 13% of children have simultaneous or sequential coverage during the year. 

** Indicates no health care coverage at anytime during the year 

*** Total child support-eligible children 

TABLE 1-2 

Child Support-Eligible Children in Single Parent Households with Private 

Health Care Coverage by Poverty and Coverage Source (1996 CPS-CSS) 

Total <100% 

poverty 

100% to <200% 

poverty 

200% 

to<300% 

poverty 

=>300% 

poverty 

Private within 

household 5.8m (34%) .74m (10%) 1.6m (36%) 1.5m (58%) 1.9m (66%) 

Private outside 

household 2.6m (15%) .79m (10%) .77m (17%) .50m (19%) .54m (19%) 

Public 8.0m (46%) 5.6m (74%) 1.6m (37%) 0.41m (16%) .35m (12%) 

Other 0.57m (03%) .25m (03%) 0.14m (03%) 0.08m (03%) .09m (03%) 

Insured * 15.1m (86%) 6.6m (87%) 3.7m (81%) 2.3m (86%) 2.5m (89%) 

Uninsured** 2.5m (14%) .96m (13%) 0.83m (19%) .37m (14%) .32m (11%) 

Total 

children*** 17.6m 7.6m 4.5m 2.6m 2.9m 

* Insured at any time during the year. Total of children with private, public and other health care coverage greater 

than total insured because children have simultaneous or sequential coverage during the year 

** Indicates no health care coverage at anytime during the year 

*** Total child support-eligible children in single parent household 
APPENDIX D

Page A-34 Medical Child Support Working Group Report 

TABLE 1-3 Child Support-Eligible Children In Two Parent Households with 

Private Health Care Coverage by Poverty and Coverage Source (1996 CPS-CSS)

Total <100% 

poverty 

100% to 

<200% poverty 

200% to 

<300% 

poverty 

=>300% 

poverty 

Private within 

household 2.4m (67%) .15m (24%) .4m (50%) .56m (76%) 1.25m (90%) 

Private outside 

household .48m (14%) .04m (07%) .08m (10%) .11m (15%) .25m (18%) 

Public .6m (17%) .3m (51%) .18m (23%) .07m (10%) .05m (03%) 

Other .24m (07%) .04m (07%) .10m (13%) .05m (07%) .05m (03%) 

Insured* 3.1m (87%) .47m (80%) .61m (76%) .66m (89%) 1.3m (96%) 

Uninsured** .44m (13%) .12m (20%) .19m (24%) .08m (11%) .05m (04%) 

Total 

children*** 3.5m .59m .8m .74m 1.4m 

* Insured at any time during the year. Total of children with private, public and other health care coverage greater 

than total insured because children have simultaneous or sequential coverage during the year 

** Indicates no health care coverage at anytime during the year 

*** Total child support-eligible children two parent families 

TABLE 1-4

Child Support-Eligible Children with Private Health Care Coverage by Poverty and 

Coverage Source (1996 CPS-CSS)

Total <100% 

poverty 

100% to <200% 

poverty 

200% to 

<300% 

poverty 

=>300% 

poverty 

Private within 

household 8.1m 0.88m 2.0m 2.1m 3.2m 

Private outside 

household 3.1m 0.83m 0.85 0.6m 0.8m 

Public 0.5m 0.49m 0.37m 0.16m 0.13m 

Other 0.15m 0.08m 0.10m 0.07m 0.09m 

Private* Coverage 10.4m 1.6m 2.7m 2.6m 3.6m 

* Private coverage at any time during the year. Sum of private, public and other health care coverage greater than 

total with private coverage because children have simultaneous or sequential coverage during the year 

Tables 2-1 and 2-2 (below) show health care coverage trends for 1995-1998 from the March 

Current Population Income Supplement in 1996-1999. This data is not limited to the child 

support-eligible population but includes all children in single- and two-parent households. This 

data is provided to show likely trends in health care coverage for the child support-eligible 

population from 1995-1998. For children in single parent households, the number and proportion 

of children with private health care coverage has increased, but the number of children and 

proportion with public coverage has decreased at a faster rate, thereby increasing the total number 
APPENDIX D

Medical Child Support Working Group Report Page A-35 

of children with no health care coverage of any kind. The changes for child support-eligible 

children are more likely to resemble the changes in single parent households, because the 

majority of child support-eligible children (83 percent) live in single-parent households. 

TABLE 2-1

Children in Single Parent Households by Health Coverage Status and Year (1996-

1999 CPS)

1996 1997 1998 1999 Change 96-99 

# ( %) 

Private 9.1m (43%) 9.3m (44%) 9.5m (45%) 9.9m (47%) +9 % (+9%) 

Public 9.4m (45%) 8.9m (42%) 8.3m (39%) 8.1m (38%) -14% (-16%) 

Other 0.71m (03..3%) 0.75m (03.6%) 0.72m (03.4%) 0.79m (03.7%) +11% (+12%) 

Insured* 17.7m (84%) 17.2m (82%) 17.2m (81%) 17.1m (80%) -3.4% (-4.8%) 

Uninsured*

* 3.5m (16%) 3.8m (18%) 4.0m (19%) 4.2m (20%) +2.2% (+2.5%) 

Total*** 21.1m 21.0m 21.2m 21.3m +1% 

* Insured at any time during the year. Total of children with private, public and other health care coverage greater 

than total insured because children have simultaneous or sequential coverage during the year 

** Indicates no health care coverage at anytime during the year 

*** Total children in single-parent households 

TABLE 2-2

Children in Two Parent Households by Health Coverage Status and Year (1996-

1999 CPS)

1996 1997 1998 1999 Change 

# % 

Private 39.5m (78%) 39.7m (78%) 40.2m (79%) 40.7m (79%) +3% (+1.6%) 

Public 6.0m (12%) 5.5m (11%) 5.4m (11%) 5.2m (10%) -13% (-17%) 

Other 2.6m (05.1%) 2.4m (04.7%) 2.3m (04.5%) 2.3m (04.5%) -12% (-12%) 

Insured* 44.6m (88%) 44.6m (88%) 45.0m (88%) 45.4m (88%) +2% (0%) 

Uninsured** 5.9m (12%) 6.2m (12%) 6.1m (12%) 6.1m (12%) +3% (0%) 

Total*** 50.6m 50.8m 51.1m 51.4m 1.5% 

* Insured at any time during the year. Total of children with private, public and other health care coverage greater 

than total insured because children have simultaneous or sequential coverage during the year. 

** Indicates no health care coverage at anytime during the year 

*** Total children in two parent households 

Source: Data for tables 1-1 through 1-4 is from the 1996 March-April public use match file of the 

Current Population Survey(CPS)—Income(March) and Child Support (April) Supplements. The 

CPS is conducted by the Bureau of the Census. The 1996 data file represents income and child 

support status as of calendar year 1995. This was the latest data available that could identify the 
APPENDIX D

Page A-36 Medical Child Support Working Group Report 

health care coverage status of child support-eligible children. Data for tables 2-1 and 2-2 are 

from the 1996, 1997, 1998, and 1999 CPS-March Income Supplement. All data tabulations were 

produced by HHS/Office of Planning and Evaluation specifically for this Report.
APPENDIX E

Medical Child Support Working Group Report Page A-37 

APPENDIX E: National Medical Support Notice

Technical Revision Recommendations 

The proposed National Medical Support Notice is comprised of two parts: Part A, Employer 

Withholding Notice, and Part B, Medical Support Notice to the Plan Administrator. Each part 

includes the actual notice containing information to be provided by the State IV-D agency, 

including the names and mailing addresses of the employee/obligor, the child and the employer, 

and the type of coverage to be provided, such as basic, dental, vision, mental health, and 

prescription. They also contain information related to the underlying child support order. 

Part A includes an Employer Response form. If the employer does not offer group health 

coverage or if the employee is not employed by the employer, the employer checks the 

appropriate box and returns it to the State agency. Otherwise, the employer forwards Part B to 

the appropriate plan administrator. If, after receiving enrollment information from the plan 

administrator, the employer determines that State or Federal withholding limitations prevent 

withholding the required employee contribution to obtain coverage, the employer checks the 

appropriate box and returns the Response to the State agency. 

Part A also includes Instructions to Employer, which informs the employer of the following: its 

responsibilities with respect to the Notice, including forwarding Part B to the administrator of 

each group health plan in which the child may be eligible to enroll; the limitations on and priority 

of withholding; the duration of the withholding obligation; possible sanctions the employer may 

be subject to; the employer’s obligation to notify the State agency if the employee’s employment 

terminates; the employee’s liability for making any necessary employee contributions to the plan; 

and a means to contact the State agency with any questions. 

Part B includes a Plan Administrator Response form that the administrator of a group health plan 

uses to notify the State agency of the following: any defects in the Notice (by checking the 

appropriate box); when it was determined to be a QMCSO; whether the child has been enrolled in 

the plan or, if not, what options are available (indicated by checking the appropriate box); and the 

effective date of coverage and the options selected. 

The Instructions to the Plan Administrator informs the Plan Administrator of his/her 

responsibilities with respect to the Notice. These responsibilities include the need to: inform the 

parties when coverage is effective and provide a description of the coverage; provide the 
APPENDIX E

Page A-38 Medical Child Support Working Group Report 

custodial parent with forms, documents, and information necessary to effectuate coverage; and 

notify the participant that his/her coverage may change based on an election made for the child. 

The Instructions also inform the administrator that the child may not be denied coverage on the 

ground that the child was born out of wedlock, is not claimed as a dependent on the participant’s 

Federal income tax return, or does not reside with the participant, and that enrollments must be 

made without regard to open season restrictions. Finally, the Instructions inform the 

administrator that the child is to be treated as a dependent under the terms of the plan, that the 

child may be entitled to COBRA continuation coverage under certain circumstances, and the 

conditions under which the child may be dis-enrolled from the plan. 
APPENDIX E

Medical Child Support Working Group Report Page A-39 

Technical Notice Comments 

Parts A and B (IV-D agency portion) 

1. That “court name” in the common case identification data section of both Parts A 

and B be changed to “Court or Administrative Authority” to recognize cases in 

which the order has been issued by an administrative authority rather than by a 

court. 

2. That the phrase “alternate recipient(s)/child(ren)” be replaced by “child(ren)” 

throughout the Notice. Similarly, “employee/obligor” should be replaced by 

“employee.” 

3. The types of coverage at the bottom of both Parts A and B should be replaced 

with the following language: 

The order requires the child(ren) be enrolled in [ ] any health coverages available 

under your plan or [ ] only the following coverage(s): ___ Medical; ____ Dental; 

____ Vision; ___ Prescription drug; ____ Mental health; ____ Other 

(specify):___________________. 

Employer Response (Part A) 

4. The parenthetical just below the title should be revised to read: “To be completed 

within 20 business days after the date of the Notice or sooner if reasonable” and 

moved so that it only applies to whether family health coverage is available to the 

employee through the employer (not to whether withholding limitations prevent 

the withholding of required employee contributions). This will make the time 

limit clearer. 

5. The Employer Response would be easier to read and the responses would be more 

useful to the agency if response 1 were split into two responses: 

1. Employer does not provide any family health coverage. 

2. The employee is among a class of employees that are not eligible for 

family health coverage (for example, part-time or non-union 

employees). 

[The current response 2 would become response 3, and current response 3 would become 

response 4.] 

6. In current response 2 (renumbered 3), a line should be added for “Date of 

termination:” 

7. Space for the employer’s EIN (employer identification number) should be added 

at the bottom of the Employer Response, to be completed if the EIN is not shown 

on the portion of the Notice completed by the IV-D agency. 
APPENDIX E

Page A-40 Medical Child Support Working Group Report 

Instructions to Employers (Part A) 

8. That the word “also” be deleted from the first sentence under Instructions To 

Employer where reference is made to “children identified above.” 

9. That the clause “As the employer of the employee, you are required to:” in the 

first sentence under Employer Responsibilities, Part A, be deleted. (These 

responsibilities are included under the general heading of Instructions To 

Employers so it is evident that they apply to the employer who previously has 

been identified by name. 

10. That the first sentence in Part A under Limitations on Withholding be revised to 

clarify that the maximum CCPA limit applies to the combined amount withheld 

for both cash and medical support. The following language is proposed: “The 

total amount withheld for both cash and medical support cannot exceed ___% of 

the Employee’s aggregate disposable weekly earnings.” 

11. That Item 3 under Limitations on Withholding in the instructions to Part A be 

revised to allow each Issuing Agency to indicate the amount allowed by the child 

support order. The following language is proposed to replace the current Item 3: 

“The amounts allowed for medical support by the child support order, as indicated 

here:” Similarly, under Priority of Withholding, the Issuing Agency should be 

allowed to insert a description of priorities under state law, if any. 

(These amounts and methods of calculation differ from State to State and 

Employers will not know them unless the employers are informed by the Issuing 

Agency.) 

12. That the paragraph in the section under Notice of Termination of Employment, 

Part A, be revised to eliminate unnecessary words. The following language is 

proposed: “ In any case in which the employee’s employment terminates, the 

Employer must promptly notify the Issuing Agency listed above of such 

termination. This requirement may be satisfied by sending the Issuing Agency a 

copy of any notice the Employer is required to provide under...” 

Plan Administrator Response (Part B) 

13. The parenthetical just below the title should be revised to read: “(To be completed 

and returned to the Issuing Agency within 40 business days after the date of the 

Notice or sooner if reasonable).” This will make the time limit for the response 

more prominent. 

14. Part B deals first with orders that are not qualified and then orders that are 

qualified, but the instructions are in the opposite order. The form and the 

instructions should be in the same order. It would probably be best if the current 

response 1 (the order is not qualified), be made the last on the Response. 
APPENDIX E

Medical Child Support Working Group Report Page A-41 

15. In the second sentence of response 2 on Part B, the phrase "If dependent only 

coverage is not available" is confusing and should be eliminated. Few plans have 

such coverage. Even in a plan that had such coverage, it is not clear what should 

happen. Dependent only coverage may not always be the appropriate choice. For 

example, if the employee already has family coverage that covers the employee 

the plan should not disturb the existing coverage (particularly since that could 

deprive other children of coverage). 

16. If the Notice is determined to be a qualified order and the employee is enrolled in 

a plan (or option within the plan) that has family coverage available, the Plan 

Administrator Response (Part B) should so indicate and the plan administrator 

should enroll the child in that option. A new b. and c. should be inserted under 2, 

as follows: 

b. The participant is enrolled in an option that is providing dependant 

coverage and the child(ren) will be enrolled in the same option; 

c. The participant is enrolled in an option that permits dependent 

coverage that has not been elected; dependent coverage will be 

provided. 

The instructions would then indicate that the Plan Administrator should inform 

the Employer to withhold any additional employee contribution. 

17. A new item 2 should be added for the plan administrator to indicate whether the 

child is outside of the service area, or if the plan administrator cannot make that 

determination (for instance, if a State official has been substituted for the address 

of the child). 

18. Current item 2b should be renumbered to 3, and the lines provided for Plan 

Administrator to indicate the various options should be revised as follows to 

permit the Plan Administrators to indicate the respective employee premium 

amount for each option and whether the plan has a limited geographic service 

area: 

Each child may be included as a dependent under one of the following options 

that provide family coverage: 

Option 

Additional 

Cost to 

Cover Child 

Plan Service 

Area Limited Default 

% (1) _______________________ ___________ ____________ [ ] 

% (2) _______________________ ___________ ____________ 

% (3) _______________________ ___________ ____________ 

The plan administrator would be instructed to list the plan's default option, if any, 

first and to enroll the child in that option if there is no response from the IV-D 

agency within [20] business days. 

19. In the first sentence of the current item 3 the word “all” should be replaced with 

“sufficient.” 
APPENDIX E

Page A-42 Medical Child Support Working Group Report 

20. "PIN or Contract Number" should be replaced with "Plan, policy or contract 

number". 

Instructions to the Plan Administrator 

21. Starting the instructions to the plan administrator with the Paperwork notice is 

confusing and makes it difficult to find the start of the real instructions. The 

Paperwork notice should be eliminated, moved to the end or separated in some 

way so that the reader can find the beginning of the instructions. 

22. That a sentence be added in Instructions to the Plan Administrator to clearly 

indicate that: “If the plan requires that the Employee be enrolled in order for the 

child(ren) to be enrolled, you must enroll both the employee and the child(ren).” 

This sentence might be added at the end of the section on Unlawful Refusal to 

Enroll. 

23. The instructions should make it clear that the plan administrator is allowed to 

attach the plan's enrollment information or summary plan description to provide 

the information required in new responses 3 and 4, since it won't necessarily fit in 

the space provided and the enrollment materials are likely to contain additional 

information. 

24. If the Notice covers more than one child but fails to provide the address of one of 

the children, the instructions should make clear that the Notice should be treated 

as a qualified order with respect to the children for whom the address has been 

provided. Similarly, if the employee's address is not provided but the plan has a 

record of the address in its files, the instructions should make it clear that the 

absence of the address does not disqualify the order. This is similar to guidance 

that DOL has provided with respect to QDROs. 

25. Instruction (A)(1) should be divided into two separate instructions as follows: 

(1) Complete Part B - Plan Administrator Response and send it to the Issuing 

Agency; 

(2) Notify the employee, each child and the custodial parent that coverage of the 

child(ren) is or will become available (notification of the custodial parent 

will be deemed notification of the child(ren) who reside at the same address); 

[(2), (3), (4), (5) and (6) should be renumbered.] 

26. Current instruction (A)(4) (renumbered (6)) should be reworded as follows: 

(6) if the option in which the participant is enrolled does not provide coverage for 

children or the child(ren) are outside of the option’s service area, notify the 

participant that this Notice may require that the option that he or she has 

elected be changed in order to enroll the child(ren) 

27. An example should be added at the end of current instruction (A)(5)(b) as 

follows: “(for example, selection of the coverage option if more than one option is 

available).” 
APPENDIX E

Medical Child Support Working Group Report Page A-43 

28. An instruction should be added informing the plan administrator that if the IV-D 

agency does not respond within 20 business days after the administrator has 

returned the Plan Administrator Response informing the IV-D agency that a 

choice among more than one option is required, and the plan has a default option, 

the administrator is to enroll the child(ren), and the participant if necessary, in the 

plan’s default option. 

29. The plan administrator should send the description of the coverage only to the 

custodial parent (or the Substitute Official if the custodial parent’s address is not 

given), not to the Issuing Agency. 

30. If some options (such as HMOs) have a limited geographic service area and the 

child's address or zip code is not provided, the instructions should advise the plan 

administrator to contact the Issuing Agency for information necessary to 

determine which options are available in the child’s area. 

31. Add instructions dealing with waiting period and withholding limits consistent 

with process recommendations. 

32. Explain “Employee Cost.” 
APPENDIX E

Page A-44 Medical Child Support Working Group Report 

Notice 

NATIONAL MEDICAL SUPPORT NOTICE OMB NOS. 

PART A

EMPLOYER WITHHOLDING NOTICE

This Notice is issued under Section 466(a)(19) of the Social Security Act and Section 

609(a)(5)(C) of the Employee Retirement Income Security Act of 1974 (ERISA). 

Issuing Agency: __________________________ 

Issuing Agency Address: ___________________ 

________________________________________ 

Date of Notice: _______________________ 

Case Number: ________________________ 

Telephone Number: ___________________ 

Court or Administrative Authority: _______________________ 

Date of Support Order: _____________________ 

Support Order Number: ____________________ 

_____________________________________) 

Employer/Withholder’s Federal EIN Number 

_____________________________________) 

Employer/Withholder’s Name 

_____________________________________) 

Employer/Withholder’s Address 

_____________________________________) 

Custodial Parent’s Name (Last, First, MI) 

_____________________________________) 

Custodial Parent’s Mailing Address 

_____________________________________) 

Child(ren)’s Mailing Address (if different from 

Custodial Parent’s) 

_____________________________________) 

_____________________________________) 

_____________________________________) 

Name, Mailing Address, and Telephone 

Number of a Representative of the Child(ren) 

Child(ren)’s Name(s) DOB SSN 

__________________________ _______ ________ 

__________________________ _______ ________ 

__________________________ _______ ________ 

RE* _______________________________________ 

 Employee’s Name (Last, First, MI) 

 _______________________________________ 

 Employee’s Social Security Number 

 _______________________________________ 

 Employee’s Mailing Address 

 _______________________________________ 

 Substituted Official/Agency Name and Address 

Child(ren)’s Name(s) DOB SSN 

____________________________ _________ __________ 

____________________________ _________ __________ 

____________________________ _________ __________ 

The order requires the child(ren) to be enrolled in [ ] any health coverages available 

under your plan; or [] only the following coverage(s): __medical; __dental; __vision; 

__prescription drug; __mental health; __other 

(specify):______________________________ 
APPENDIX E

Medical Child Support Working Group Report Page A-45 

EMPLOYER RESPONSE

If either 1, 2, or 3 below applies, check the appropriate box and return this Part A to the 

Issuing Agency within 20 business days after the date of the Notice, or sooner if 

reasonable. NO OTHER ACTION IS NECESSARY. If neither 1, 2, nor 3 applies, 

forward Part B to the appropriate plan administrator(s) within 20 business days after the 

date of the Notice, or sooner if reasonable. Check number 4 and return this Part A to the 

Issuing Agency if the Plan Administrator informs you that the child(ren) is/are enrolled in 

an option under the plan for which the employee contribution exceeds the amount that 

may be withheld from the employee’s income due to State or Federal withholding 

limitations and/or prioritization. 

& 1. Employer does not maintain or contribute to plans providing dependent or family 

health care coverage. 

& 2. The employee is among a class of employees (for example, part-time or non-union) 

that are not eligible for family health coverage under any group health plan maintained by 

the employer or to which the employer contributes. 

& 3. Health care coverage is not available because the employee is no longer employed 

by the employer: 

Date of termination:___________________ 

Last known address: _________________________________________________ 

Last known telephone number: _________________________________ 

New employer (if known): ____________________________________________ 

New employer address: ______________________________________________ 

New employer telephone number: _______________________________ 

& 4. State or Federal withholding limitations and/or prioritization prevent the 

withholding from the employee’s income of the amount required to obtain coverage 

under the terms of the plan. 

Employer Representative: 

Name: _____________________________ Telephone Number: _____________ 

Title: _____________________________ Date: ________________ 

EIN (if not provided by Issuing Agency on Employer Withholding Notice):___________ 
APPENDIX E

Page A-46 Medical Child Support Working Group Report 

INSTRUCTIONS TO EMPLOYER

This document serves as notice that the employee identified on this Notice is obligated by 

a court or administrative child support order to provide health care coverage for the 

child(ren) identified on this Notice. This Medical Support Notice replaces any Medical 

Support Notice that the Issuing Agency has previously served on you with respect to the 

employee and the children listed on this Notice. 

The document consists of Part A - Employer Withholding Notice for the employer to 

withhold any employee contributions required by the group health plan(s) in which the 

children is/are enrolled; and Part B - Medical Support Notice to the Plan 

Administrator, which must be forwarded to the administrator of each group health plan 

identified by the employer to enroll the eligible child(ren). 

EMPLOYER RESPONSIBILITIES

1. If the individual named above is not your employee, or if family health care 

coverage is not available, please complete item 1, 2, or 3 of the Employer 

Response as appropriate, and return it to the Issuing Agency. NO FURTHER 

ACTION IS NECESSARY. 

2. If family health care coverage is available for which the child(ren) identified 

above may be eligible, you are required to: 

a. Transfer, not later than 20 business days after the date of this Notice, a 

copy of Part B - Medical Support Notice to the Plan Administrator to 

the administrator of each appropriate group health plan for which the 

child(ren) may be eligible, and 

b. Upon notification from the plan administrator(s) that the child(ren) is/are 

enrolled, either 

1) withhold from the employee’s income any employee 

contributions required under each group health plan, in accordance with 

the applicable law of the employee’s principal place of employment and 

transfer employee contributions to the appropriate plan(s), or 

2) complete item 4 of the Employer Response to notify the Issuing 

Agency and the parties that enrollment cannot be completed because of 

prioritization or limitations on withholding. 

c. If the plan administrator notifies you that the employee is subject to a 

waiting period that expires more than 90 days from the date of its receipt 

of this Notice, or whose duration is determined by a measure other than 

the passage of time (for example, the completion of a certain number of 

hours worked), notify the plan administrator when the employee is eligible 

to enroll in the plan and that this Notice requires the enrollment of the 

child(ren) named in the Notice in the plan. 
APPENDIX E

Medical Child Support Working Group Report Page A-47 

LIMITATIONS ON WITHHOLDING

The total amount withheld for both cash and medical support cannot exceed ___% of the 

employee’s aggregate disposable weekly earnings. The employer may not withhold more 

than the lesser of: 

1. The amounts allowed by the Federal Consumer Credit Protection Act (15 

U.S.C., section 1673(b)); 

2. The amounts allowed by the State of the employee’s principal place of 

employment; or 

3. The amounts allowed for medical support by the child support order, as 

indicated here:_________________________________. 

In applying these limits, medical child support is the amount of additional employee 

premium which will be required to add family or dependent coverage. The premium 

required for individual coverage is subtracted from the cost of family coverage for this 

purpose. For example, if the employee premium is $50 for self-only coverage and $150 

for family coverage, the amount of medical child support would be $100 ($150 minus 

$50). 

The Federal limit applies to the aggregate disposable weekly earnings (ADWE). ADWE 

is the net income left after making mandatory deductions such as State, Federal, local 

taxes; Social Security taxes; and Medicare taxes. 

PRIORITY OF WITHHOLDING

If withholding is required for employee contributions to one or more plans under this 

notice and for a support obligation under a separate notice and available funds are 

insufficient for withholding for both cash and medical support contributions, the 

employer must withhold amounts for purposes of cash support and medical support 

contributions in accordance with the law, if any, of the State of the employee’s principal 

place of employment requiring prioritization between cash and medical support, as 

described here: 

_______________________________________________________________________ 

_______________________________________________________________________. 

DURATION OF WITHHOLDING 

The child(ren) shall be treated as dependents under the terms of the plan. Coverage of a 

child as a dependent will end when similarly situated dependents are no longer eligible 

for coverage under the terms of the plan. However, the continuation coverage provisions 

of ERISA may entitle the child to continuation coverage under the plan. The employer 

must continue to withhold employee contributions and may not disenroll (or eliminate 

coverage for) the child(ren) unless: 
APPENDIX E

Page A-48 Medical Child Support Working Group Report 

1. The employer is provided satisfactory written evidence that: 

a. The court or administrative child support order referred to above is 

no longer in effect; or 

b. The child(ren) is or will be enrolled in comparable coverage which 

will take effect no later than the effective date of disenrollment 

from the plan; or 

2. The employer eliminates family health coverage for all of its employees. 

POSSIBLE SANCTIONS

An employer may be subject to sanctions or penalties imposed under State law and/or 

ERISA for discharging an employee from employment, refusing to employ, or taking 

disciplinary action against any employee because of medical child support withholding, 

or for failing to withhold income, or transmit such withheld amounts to the applicable 

plan(s), as the Notice directs. 

NOTICE OF TERMINATION OF EMPLOYMENT

In any case in which the employee’s employment terminates, the employer must 

promptly notify the Issuing Agency listed above of such termination. This requirement 

may be satisfied by sending the Issuing Agency a copy of any notice the employer is 

required to provide under the continuation coverage provisions of ERISA or the Health 

Insurance Portability and Accountability Act. 

EMPLOYEE LIABILITY FOR CONTRIBUTION TO PLAN

The employee is liable for any employee contributions that are required under the plan(s) 

for enrollment of the child(ren) and is subject to appropriate enforcement. The employee 

may contest enforcement based on a mistake of fact (such as the identity of the obligor). 

Should an employee contest, the employer must proceed to comply with the employer 

responsibilities in this Notice until notified by the Issuing Agency to discontinue 

withholding. To contest enforcement, the employee should contact the Issuing Agency at 

the address and telephone number listed on the Notice. 

CONTACT FOR QUESTIONS 

If you have any questions regarding this Notice, you may contact the Issuing Agency at 

the address and telephone number listed above. 
APPENDIX E

Medical Child Support Working Group Report Page A-49 

NATIONAL MEDICAL SUPPORT NOTICE OMB NOS.

PART B

MEDICAL SUPPORT NOTICE TO PLAN ADMINISTRATOR

This Notice is issued under section 466(a)(19) of the Social Security Act and section 609(a)(5)(C) 

of the Employee Retirement Income Security Act of 1974 (ERISA). Receipt of this Notice from 

the Issuing Agency constitutes receipt of a Medical Child Support Order under ERISA 

section 609(a)(5)(A) and (B). The rights of the parties and the duties of the plan administrator 

under this NOTICE are in addition to the existing rights and duties established under such 

section.

Issuing Agency: __________________________ 

Issuing Agency Address: ___________________ 

________________________________________ 

Date of Notice: _______________________ 

Case Number: ________________________ 

Telephone Number: ___________________ 

Court or Administrative Authority: ___________________ 

Date of Support Order: _____________________ 

Support Order Number: ____________________ 

_____________________________________) 

Employer/Withholder’s Federal EIN Number 

_____________________________________) 

Employer/Withholder’s Name 

_____________________________________) 

Employer/Withholder’s Address 

_____________________________________) 

Custodial Parent’s Name (Last, First, MI) 

_____________________________________) 

Custodial Parent’s Address 

_____________________________________) 

Child(ren)’s Mailing Address (if Different from 

Custodial Parent’s) 

_____________________________________) 

_____________________________________) 

_____________________________________) 

Name(s), Mailing Address, and Telephone 

Number of a Representative of the Child(ren) 

Child(ren)’s Name(s) DOB SSN 

__________________________ _______ ________ 

__________________________ _______ ________ 

__________________________ _______ ________ 

RE* _______________________________________ 

 Employee’s Name (Last, First, MI) 

 _______________________________________ 

 Employee’s Social Security Number 

 _______________________________________ 

 Employee’s Address 

 _______________________________________ 

 Substituted Official/Agency Name and Address 

Child(ren)’s Name(s) DOB SSN 

____________________________ _________ __________ 

____________________________ _________ __________ 

____________________________ _________ __________ 

The order requires the child(ren) to be enrolled in [] any health coverages available under 

your plan; or [] only the following coverage(s): __medical; __dental; __vision; 

__prescription drug; __mental health; __other 

(specify):______________________________ 
APPENDIX E

Page A-50 Medical Child Support Working Group Report 

PLAN ADMINISTRATOR RESPONSE

(To be completed and returned to the Issuing Agency within 40 business days after the 

date of the Notice, or sooner if reasonable) 

This Notice was received by the plan administrator on ________. 

& 1. This Notice was determined to be a “qualified medical child support order,” on 

_______. The employee and child(ren) are to be enrolled in the following family 

coverage. Complete question 4. 

& a. There is only one type of coverage provided under the plan. The child(ren) 

is/are included as dependents of the participant under the plan. 

& b. The participant is enrolled in an option that is providing dependent coverage 

and the child(ren) will be enrolled in the same option. 

& c. The participant is enrolled in an option that permits dependent coverage that 

has not been elected; dependent coverage will be provided. 

2. & a. The child is outside of the plan/option’s service area. 

 & b. The plan administrator cannot determine if the child is in the plan/option’s 

service area. 

& 3. This Notice is qualified, but there is more than one option available under the plan 

and the participant is not enrolled, or is enrolled in an option that is not accessible to the 

child(ren). The Issuing Agency must select from the available options and return this 

Part B to the Plan Administrator named below for processing. Each child is to be 

included as a dependent under one of the following options that provide family coverage. 

List the plan’s default option, if any, first. If you receive no response from the Issuing 

Agency within 20 business days after the return of this Response, enroll the child(ren), 

and the participant if necessary, in the default option: 

Option 

Additional Employee 

Contribution to cover 

the child(ren) 

Limited 

Service Area? Default 

% (1) _____________________ ___________ ____________ [ ] 

% (2) _____________________ ___________ ____________ 

% (3) _____________________ ___________ ____________ 

& 4a. The plan administrator received sufficient information necessary for enrollment on 

______(date). Coverage is effective as of __________. Any necessary withholding 

should commence if permitted under State and Federal withholding and/or prioritization 

limitations. The child(ren) has/have been enrolled in the following option(s): 

Name and address of plan 

or insurance carrier(s): 

Plan, Policy or Contract 

number: 

Address to submit claims: 

_____________________ ______________________ ______________________ 

_____________________ ______________________ ______________________ 

_____________________ ______________________ ______________________ 

_____________________ ______________________ ______________________ 
APPENDIX E

Medical Child Support Working Group Report Page A-51 

4b. The plan administrator & has & has not confirmed that the necessary withholding 

is available under applicable State and Federal withholding limitations. 

& 5. This Notice is qualified, but the participant is subject to a waiting period that expires 

more than 90 days from the date of receipt of this Notice, or the duration of which is 

determined by some measure other than the passage of time (for example, the completion 

of a certain number of hours worked). Upon the satisfaction of the waiting period, the 

employer will notify the plan administrator that the participant is eligible to enroll in the 

plan and that this Notice requires the enrollment of the child(ren) named in the Notice, 

and the participant if necessary to enroll the child(ren). 

& 6. This Notice does not constitute a "qualified medical child support order" because: 

& The name of the & child(ren) or & participant is missing. 

& The mailing address of the & child(ren) or & participant is missing. 

& The following child(ren) is/are at or above the age at which dependents are no 

longer eligible for coverage under the plan ___________________ (insert 

name(s) of child(ren)). 

Plan Administrator or Representative: 

Name: _____________________________ Telephone Number: _____________ 

Title: _____________________________ Date: ________________ 

Address:___________________________________ 
APPENDIX E

Page A-52 Medical Child Support Working Group Report 

INSTRUCTIONS TO PLAN ADMINISTRATOR

This Notice has been forwarded from the employer identified above to you as the plan 

administrator of a group health plan maintained by the employer (or a group health plan 

to which the employer contributes) and in which the noncustodial parent/participant 

identified above is enrolled or is eligible for enrollment.

This Notice serves to inform you that the noncustodial parent/participant is obligated by 

an order issued by the court or agency identified above to provide health care coverage 

for the child(ren) if available under the group health plan(s) as described on Part B. 

(A) If the participant and child(ren) and their mailing addresses (or that of a Substituted 

Official or Agency) are identified above, and if coverage for the child(ren) is or will 

become available, this Notice constitutes a “qualified medical child support order” under 

ERISA, and you must, within 40 business days of the date of this Notice, or sooner if 

reasonable: 

(1) Complete Part B - Plan Administrator Response and send it to the Issuing 

Agency; 

(2) notify the noncustodial parent/participant named above, each named child, and 

the custodial parent that coverage of the child(ren) is or will become available 

(notification of the custodial parent will be deemed notification of the child(ren) if they 

reside at the same address); 

(3) furnish the custodial parent a description of the coverage available and the 

effective date of the coverage, either on the Plan Administrator Response or attached 

thereto (such as a summary plan description); 

(4) provide to the custodial parent any forms, documents, or information 

necessary to effectuate such coverage (including the applicability of creditable coverage 

under HIPAA); 

(5)(a) if no other information or action is required, include the child(ren) in the 

available coverage, or, 

(b) notify the custodial parent and the Issuing Agency of any additional steps 

to be taken (for example, selection of the coverage option if more than one 

option is available); 

(6) if the option in which the participant is enrolled does not provide coverage for 

children or the child(ren) are outside of the option’s service area, notify the participant 

that this Notice may require that the option that he or she has elected be changed in order 

to enroll the child(ren); 
APPENDIX E

Medical Child Support Working Group Report Page A-53 

(7) if some or all of the options under the plan are limited to specified geographic 

service areas (e.g., specific zip codes): 

(a) if a Substitute Official’s name and address has been substituted for the 

address of the custodial parent and child(ren), indicate that geographic 

restrictions apply and provide information that would allow the Issuing 

Agency to determine whether there is coverage that is accessible to the 

child(ren); or 

(b) if the only available plan coverage is geographically limited and the 

child(ren) is/are outside the plan's service area, enroll the child unless the 

Issuing Agency notifies you not to enroll; 

(8) if the participant is subject to a waiting period that expires more than 90 days 

from the date of receipt of this Notice, or whose duration is determined by a measure 

other than the passage of time (for example, the completion of a certain number of hours 

worked), check the appropriate box on the Plan Administrator Response and return to the 

Issuing Agency and the employer, and notify the participant and the custodial parent; and 

(9) upon completion of the enrollment information, transfer the applicable 

information on Part B to the employer for a determination that the necessary employee 

contributions are available. Inform the employer that the enrollment is pursuant to a 

National Medical Support Notice, and what additional employee contribution, if any, is 

required to cover the child(ren) named on the Notice. 

(B) If you checked box 3 on the Plan Administrator Response and the plan has a 

default option, you are to enroll the child(ren) in the default option within a reasonable 

period of time if you have not received a response from the Issuing Agency within 20 

business days of the date you returned the Response. If the plan does not have a default 

option, you are not required to enroll the child(ren) until you receive a response from the 

Issuing Agency. 

(C) If within 40 business days of the date of this Notice, or sooner if reasonable, you 

determine that this Notice does not constitute a "qualified medical child support order," 

you must complete Part B - Plan Administrator Response and send it to the Issuing 

Agency, and inform the noncustodial parent/participant, custodial parent, and child(ren) 

of the specific reasons for your determination. If the mailing addresses for one or more 

of the children are missing, but are present for others, this Notice constitutes a “qualified 

medical child support order” with respect to those children for whom the address is 

present (and to any others for whom a mailing address is known). Similarly, if the 

participant’s mailing address is not present, but it is present in the plan’s files, you may 

not find this Notice not to be a “qualified medical child support order” on that basis. 

(D) Any required notification of the noncustodial parent, child(ren) and/or participant that 

is required may be satisfied by sending the party a copy of the Plan Administrator 

Response, if appropriate. 
APPENDIX E

Page A-54 Medical Child Support Working Group Report 

UNLAWFUL REFUSAL TO ENROLL 

Enrollment of a child may not be denied on the ground that: (1) the child was born out of 

wedlock; (2) the child is not claimed as a dependent on the participant's Federal income 

tax return; or (3) the child does not reside with the participant or in the plan's service 

area. All enrollments are to be made without regard to open season restrictions. If the 

plan requires that the participant be enrolled in order for the child(ren) to be enrolled, you 

must enroll both the participant and the child(ren). 

PERIOD OF COVERAGE 

The child(ren) shall be treated as dependents under the terms of the plan. Coverage of a 

child as a dependent will end when similarly situated dependents are no longer eligible 

for coverage under the terms of the plan. However, the continuation coverage provisions 

of ERISA may entitle the child to continuation coverage under the plan. Once a child is 

enrolled in the plan as directed above, the child may not be disenrolled unless: 

(1) The plan administrator is provided satisfactory written evidence that either: 

(a) the court or administrative child support order referred to above is no 

longer in effect, or 

(b) the child is or will be enrolled in comparable coverage which will take 

effect no later than the effective date of disenrollment from the plan; 

(2) The employer eliminates family health coverage for all of its employees; or 

(3) Any available continuation coverage is not elected, or the period of such 

coverage expires. 

CONTACT FOR QUESTIONS 

If you have any questions regarding this Notice, you may contact the Issuing Agency at 

the address and telephone number listed above. 

Paperwork Reduction Act Notice 

The Issuing Agency asks for the information on this form to carry out the law as specified 

in the Employee Retirement Income Security Act. You are required to give the Issuing 

Agency the information. You are not required to respond to this collection of 

information unless it displays a currently valid OMB control number. The Issuing 

Agency needs the information to determine whether health care coverage is provided in 

accordance with the underlying child support order. The Average time needed to 

complete and file the form is estimated below. These times will vary depending on the 

individual circumstances. 

Learning about the law or the form Preparing the form

First Notice 1 hr. 1 hr., 45 min. 

Subsequent Notices ------ 35 min. 
APPENDIX F

Medical Child Support Working Group Report Page A-55 

APPENDIX F: Washington State Model Notice of Release Form
APPENDIX G

Page A-56 Medical Child Support Working Group Report 

APPENDIX G: Meeting Schedule

The Working Group met nine times. The first meeting, in March 1999, included a swearing-in 

ceremony, program briefings, and presentations. The Working Group discussed issues to be 

contained in the Group’s Report to the Secretaries and recommendations to remove the 

impediments to effective enforcement of medical child support. 

At the Working Group’s third meeting, in May, the Working Group formed four subcommittees 

to address various barriers, issues, options, and recommendations between the Working Group 

meetings. At subsequent meetings of the full Working Group, each subcommittee presented its 

draft recommendations to the full Working Group for discussion and consideration. 

Schedule of Working Group Meetings 

Meeting # Dates Place Topic(s) 

Meeting #1 March 3-5, 1999 Washington, DC 

Swearing In Ceremony, 

Briefings and 

Presentations 

Meeting #2 April 13, 1999 Washington, DC National Medical Support 

Notice 

Meeting #3 May 12-13, 1999 Washington, DC 

Mission, Goals, 

Objectives, Priorities, and 

Organizational Structure 

developed Subcommittees 

Meeting #4 August 12-13, 1999 

Chicago, Illinois 

Hooking onto the 

National Child 

Support Enforcement 

Association Annual 

Meeting 

Subcommittee Reports and 

Discussion 

Meeting #5 October 4-5, 1999 Washington, DC Discuss and Adopt 

Recommendations 

Meeting #6 November 18-19, 

1999 Washington, DC 

Finalized Working 

Group’s 

Recommendations 
APPENDIX G

Medical Child Support Working Group Report Page A-57 

Meeting # Dates Place Topic(s) 

Meeting #7 January 10-11, 2000 Washington, DC 

Finalize 

Recommendations and 

Discuss Report 

Meeting #8 March 30, 2000 Washington, DC 

Finalize 

Recommendations and 

Working Group’s Report 

Meeting #9 June 8, 2000 Washington, DC 

Final Meeting to Vote on 

Working Group’s Report 

to the Secretaries 

Subcommittees were chaired by Working Group members, assisted by staff leads from HHS and 

DOL. There were four subcommittees: 

♦ The Notice and Related Issues Subcommittee 

♦ Guidelines Subcommittee 

♦ Coordination of Medical Support, Medicaid, SCHIP, and private Insurance Subcommittee 

♦ Big Picture, Environmental, Tax or “Unintended Consequences” Subcommittee 

These four subcommittees of the Working Group met bi-weekly doing research, identifying 

principles, barriers, and issues, and defining options and early recommendations. Federal 

Advisory Committee Act (FACA) regulations permit subcommittees to meet in person or by 

conference call between meetings of the entire Working Group. Subcommittees may develop 

advice or recommendations to present to the whole Working Group for review and discussion. 

Federal regulations do not permit subcommittees to make recommendations directly to Federal 

agencies. Subgroups were not authorized to make binding decisions or perform tasks for which 

the full Working Group or Agencies is/are responsible. In addition, meetings of such subgroups 

need not be open to the public and do not require a Federal Register Notice. Each subgroup 

meeting was attended by at least one employee of each Agency, designated by the Co-Chairs. 
APPENDIX G

Page A-58 Medical Child Support Working Group Report 

Subcommittees presented their draft recommendations to the full Working Group at regular 

meetings for discussion and consideration. The Working Group developed the following strategy 

to work through issues and recommendations: 

1. Subcommittee(s) discuss issues and recommendations to be brought to the full Working 

Group. 

2. The full Working Group discusses subcommittee issues and recommendations. 

• Those identified as needing more work by the subcommittee (substantive rework/revision) are sent back to subcommittee, to be brought back again to the full 

Working Group. 

• Those agreed to in content and concept by the full Working Group but identified as 

needing just minor revision or refinement (e.g., rewording) are sent back to the 

appropriate subcommittee. Such issues and recommendations are not brought back 

before the full Working Group for discussion. 

• Those with complete agreement by the full Working Group (consensus recommendation) 

are finalized. 

3. The full Working Group drafts Report of final issues and recommendations. 
APPENDIX H

Medical Child Support Working Group Report Page A-59 

APPENDIX H: Model Joint Medicaid/SCHIP Application Form

The following document is available on the web at: http://www.hcfa.gov/init/chpelig.htm

September 10, 1998 

Dear State Health Official: 

This letter is a follow-up to a letter issued by the Department of Health and Human 

Services on January 23, 1998 regarding opportunities for outreach to uninsured children. 

First, it highlights the flexibility States have to simplify the application and enrollment 

processes. Second, it provides clarification of two eligibility-related issues that have 

come to our attention as a result of the January letter: the provision of Social Security 

numbers (SSNs) for applicants and non-applicant family members; and establishment of 

immigration status for non-citizens. 

I. Application and Enrollment Simplification

As we indicated in our letter dated January 23, 1998, a major key to successfully 

enrolling children in CHIP and Medicaid is a simple application and enrollment process. 

While it is important to maintain program integrity, a burdensome application and 

enrollment process can be a significant barrier to successful enrollment. 

Many States have already begun to simplify their application and enrollment processes. 

Listed below are actions that States already have taken, as well as some other 

recommendations that States could adopt to change their current processes and to reduce 

the stigma and complexity of seeking assistance: 

• Shorten application forms and/or use mail-in applications; 

• Create joint CHIP/Medicaid applications; 

• Use joint Medicaid and CHIP applications; 

• Eliminate assets test; 

• Allow self-reporting of income by the family with follow-up verification by the 

State; 

• Reduce verification/documentation requirements that go beyond Federal 

regulation; 

• Allow redeterminations to be done by mail; 

• Speed up processing; 

• Develop a follow-up process for families not completing the application process; 
APPENDIX H

Page A-60 Medical Child Support Working Group Report 

• Establish an effective referral system between the State’s CHIP eligibility agency, 

the Medicaid and maternal and child health programs, schools as well as other 

Federal and State agencies that serve low-income families; 

• Offer phone interviews, or have transportation vouchers to assist individuals in 

getting to face-to-face interviews; 

• Expand outstationing opportunities; 

• Increase staff with multi-lingual ability; 

• Extend office hours so that applicants do not have to take off work to apply for 

benefits; 

• Take advantage of new options like presumptive eligibility and 12 month 

continuous eligibility; and 

• Try to reduce stigma of seeking public assistance by using techniques such as a 

different name for program (such as Arkansas’ ARKids, Michigan’s MIChild, and 

Connecticut’s HuskyCare). 

The Federal requirements for the application and enrollment process for Medicaid and for 

separate SCHIP programs provide a great deal of flexibility to States to design an 

application and enrollment process that is streamlined and simple, and avoids 

burdensome requirements for families that apply for benefits. For example, under 

Medicaid with the exception of obtaining documentation of immigration status for 

qualified alien applicants and the applicant’s Social Security numbers, States have 

flexibility to determine documentation requirements, including self-declaration of income 

and assets. In addition, States with separate CHIP programs can streamline and 

coordinate their application and enrollment processes for CHIP and Medicaid in a 

number of ways to make it easier for families to apply, including use of a joint 

application. 

The current application and enrollment requirements for Medicaid and separate SCHIP 

programs are listed in an attachment to this letter. They do not call for families to provide 

extensive amounts of documentation and information in order to file for benefits. For the 

most part, they deal in a very broad way with the basic elements of the application and 

enrollment process, and provide a great deal of flexibility to States to design a process 

that best suits their needs. 

Enrolling America’s uninsured children in Medicaid and CHIP is a national priority that 

requires an aggressive, sustained effort. There are many ways that States can, and are, 

modifying their processes to make them more user friendly. It is our hope that you will 

make, or continue to make, a firm commitment to simplify your application and 

enrollment processes in an effort to reduce barriers to enrolling uninsured children. 
APPENDIX H

Medical Child Support Working Group Report Page A-61 

II. Clarification of Eligibility Requirements

Provision of Social Security Numbers (SSNs) 

Attached to the January 23, 1998 outreach letter was a model joint CHIP/Medicaid 

application States could use in order to simplify the eligibility process for this new 

program. One of the pieces of information requested on the model application was a SSN 

for all family members, including those who were not applying for benefits. We wish to 

clarify that, under Section 1137 of the Act, a SSN must be supplied only by applicants for 

and recipients of Medicaid benefits. In all other cases, including non-applicant parents of 

children applying for Medicaid and children applying for a separate SCHIP program 

(non-Medicaid), States are prohibited from making the provision of a SSN by another 

family member a condition of the child’s eligibility. This also applies to other members 

of the household whose income might be used in making the child’s eligibility 

determination. 

A revised joint application form for CHIP/Medicaid children is enclosed. As you will see, 

the form now requires a SSN only for children applying for Medicaid benefits. For 

children applying for a separate SCHIP program (non-Medicaid) and members of the 

household not applying for benefits, the SSN is indicated as being optional. 

Some States use parents’ SSN as a means of verifying family income in the process of 

making an eligibility determination. While the statute does not require disclosure of the 

SSN for non-applicants, voluntary disclosure by the parent may facilitate the verification 

of income and contribute to a speedier and more accurate determination of the child's 

eligibility. States may advise parents and other household members of this as long as they 

do so in a manner that does not coerce provision of the SSN or deter application for 

benefits. Once more, we wish to clarify that States have no legal basis for denying an 

application based upon the failure to supply the SSN for verification purposes. 

III. Establishing Citizenship and Immigration Status of Non-Citizens

Children who are citizens and who are applying for either Medicaid or a separate SCHIP 

program may establish their citizenship on the basis of self-declaration; States are 

permitted to require further verification as a condition of eligibility. Children applying for 

either program who are qualified aliens must present documentation of their immigration 

status, which States must verify using systems established for that purpose. The 

citizenship or immigration status of non-applicant parents (or other household members), 

however, is irrelevant to their children’s eligibility. States may not require that parents 

disclose this information. 

There are both statutory and programmatic bases for our policy. Under the statute 

(Section 1137 of the Act), there is no authority for requiring individuals other than those 

applying for benefits to provide their SSNs or to document their immigration status. 

Furthermore, the Privacy Act makes it unlawful for a State to deny benefits to an 

individual based upon that individual’s failure to disclose the SSN, unless the disclosure 

is required by Federal law or was part of a Federal, State, or local system of records in 

operation before January 1, 1975. States may only seek the SSN of these individuals on a 
APPENDIX H

Page A-62 Medical Child Support Working Group Report 

strictly voluntary basis. The CHIP law does not require applicants to provide SSNs and 

the Medicaid law only requires it for applicants and recipients of Medicaid benefits. 

From a programmatic point of view, asking non-applicants for their SSNs or evidence of 

immigration status may discourage immigrant parents, who may not wish to disclose 

information about themselves, from applying for benefits on behalf of their children who 

are U.S. citizens. When this occurs, the children are, in effect, denied access to medical 

care that they both need and are eligible for under the law. 

We encourage States to actively provide information to adults applying for benefits on 

behalf of their children to inform them that their children’s eligibility for Medicaid or 

CHIP is not contingent on disclosure of a parent’s SSN (or lack thereof), or on 

information about non-applicant parents’ immigration status. 

If you have questions or suggestions on any of these eligibility-related issues and the use 

or adaptation of the model form and guidance attached, please contact your HCFA 

regional office staff. 

Sincerely, 

Sally K. Richardson 

Director 

Attachments

cc: 

All HCFA Regional Offices 

All PHS Regional Offices 

HHS Regional Directors 

Lee Partridge 

American Public Human Services Association 

Nolan Jones 

National Governors Association 

Joy Wilson 

National Conference of State Legislators 

Cheryl Beversdorf 

Association of State and Territorial Health Officials 

Mary Beth Senkewicz 

National Association of Insurance Commissioners 
APPENDIX H

Medical Child Support Working Group Report Page A-63 

MODEL JOINT APPLICATION FOR CHIP/MEDICAID FOR CHILDREN

[Revised 8/31/98] 

Purpose: The attached model joint application can be used for both the Children’s Health 

Insurance Program (CHIP) and children’s Medicaid eligibility (under the children’s 

poverty level related groups). States could allow individuals to use this form to apply for 

both programs and the information on this form would be sufficient for determining 

which program a child is eligible for. It includes only the information that is required in 

all circumstances, and it is provided as a base form that a State can adapt to meet its own 

needs. As presented, the form is suitable for completion by an intake worker. 

Modifications would be required to make the form suitable for direct completion by the 

applicant. 

Screening: This application will meet the statutory requirement in Title XXI that States 

identify children who are eligible for Medicaid. 

NOTE: Non-State employees cannot determine Medicaid eligibility. Therefore, in a State 

that has contracted out the process of CHIP eligibility determination (i.e., determinations 

are performed by non-State employees), this model application would have to be 

modified for use as a pure screening form (or a combination of an application for CHIP 

and a screening form) by removing all references to it as a Medicaid application. The 

statement about the use of the Social Security Number [33] still would be required. The 

inclusion of the section on rights and responsibilities [34] (but omitting any reference to 

Medicaid), however, would be at State option. 

If the form were so modified, in order to permit the information on the form to be 

submitted for use in making a Medicaid determination, the eligibility workers could 

provide a separate page to be completed by those whom the screen indicates are 

Medicaid-eligible. On that page, the individual should consent to submission of the 

information as part of a Medicaid application, and accept the rights and responsibilities 

outlined in this model (including a statement under penalty of perjury that the 

information provided on the "attached screening form" or "attached CHIP application" is 

correct). Once this page is completed, the form could be forwarded to the State for a 

Medicaid eligibility determination. 

Mandatory Information About Medicaid: If a State uses a joint CHIP/Medicaid 

application and denies the Medicaid application, then the State must thoroughly inform 

the individual about the availability of Medicaid and his or her right to apply for 

Medicaid on a basis other than as a poverty-level child. This includes an explanation of 

the Medicaid program and the various eligibility groups, the advantages of Medicaid over 

CHIP and information about how and where to apply for Medicaid. 

Federal Verification Requirements: Under Federal law, there are no verification 

requirements pertaining to eligibility for the children under Medicaid other than those 

related to alien status of non-citizens, the post-eligibility requirements of §1137 

pertaining to use of the individual’s Social Security Number and an income and 

eligibility verification system. Eligibility of a citizen child may be established on the 
APPENDIX H

Page A-64 Medical Child Support Working Group Report 

basis of self-declaration under penalty of perjury. States are permitted, however, to 

require further verification as a condition of eligibility. 

Section 1137's requirement for furnishing a Social Security number applies only to the 

applicants for and recipients of Medicaid. It does not apply to the parents of Medicaid 

applicants, nor does it apply to a State-run Children’s Health Insurance Program that is 

separate from the State’s Medicaid program. The Privacy Act, § 7 of Public Law No. 93-

579, 88 Stat. 1896, makes it unlawful for a State to deny benefits to an individual based 

upon that individual’s failure to disclose the Social Security number unless the disclosure 

is required by Federal law or was part of a Federal, State, or local system of records in 

operation before January 1, 1975. Since the new CHIP program does not require that 

Social Security Numbers be supplied and the Medicaid program requires it only for 

applicants and recipients, States may seek these account numbers from applicants for a 

non-Medicaid CHIP program only on a strictly voluntary basis. 

Additional Simplification of Medicaid Eligibility Determination: If the total gross 

income of the family is at or below the applicable Medicaid income standard, the 

questions in the shaded areas need not be answered. The individual is obviously income 

eligible for Medicaid without further information. 

Explanation of Certain Fields: There are some questions on the application that may 

not elicit all the information needed to make a determination. Under certain 

circumstances, additional information will be required. For example: 

• If the answer to the question about citizenship [18] is no, actual status will need to 

be determined, official documents submitted, etc. 

• If the child has insurance [22] and is Medicaid-eligible, information about the 

insurance company and policy number will be needed; and 

• If the child had medical bills in the last 3 months [32] and is Medicaid-eligible, 

eligibility information for the last three months will be needed to establish 

retroactive eligibility, in addition to information about the bills. 

In addition, the question concerning employment by a public agency in the State [25] is 

only needed for CHIP eligibility and is not needed for Medicaid. This field does not ask 

directly about the availability and nature of health insurance, on the assumption that the 

eligibility worker would have access to a list of public agencies that offer State health 

insurance of the type that would preclude CHIP eligibility. If this is not the case in your 

State, this field would need to be expanded. 
APPENDIX H

Medical Child Support Working Group Report Page A-65 

Examples of State Modifications: 

• A State may wish to include voter registration; or 

• A State may want to use this as an application for Medicaid for the adults, which 

would require additional information about the adults and stock affidavits 

concerning assignment of rights and pursuit of support. 

• A State will need to add a question concerning each individual’s resources 

(assets) if: 

- the State applies a resource test for the poverty level 

children; or 

- the State has not chosen to cover children born 

before 10/1/83 under the poverty level group AND the 

State applies a resource test for the optional group of 

categorically needy children ("Ribicoff children"). 
APPENDIX H

Page A-66 Medical Child Support Working Group Report 

-- SAMPLE -- 

CHILDREN’S HEALTH INSURANCE PROGRAM / MEDICAID 

 JOINT APPLICATION FORM [Revised 8/31/98] 

I. Person Applying for the Child or Children

Name [1] FIRST MIDDLE LAST 

 

Home Phone 

[2] 

 

Work Phone 

[3] 

 

Home Address [4] Street Apt. # [5] City [6] State [7] Zip [8] County [9]

Mailing Address (if different from 

above) [10] Street 

Apt. # [11] City [12] State [13] Zip [14] County [15]

II. Family Members Living in the Home (Attach extra sheet if needed)

Children 

(under 19) 

living in 

the home 

NAMES [16]

Date 

of 

Birth 

[17]

Citizen 

(Yes or No -- 

If no, see 

also 

attachment) 

[18]

Social Security Number 

[required for 

applicants -- otherwise 

optional] [19]

Mother’s 

Name [20]

Father’s Name [21] Covered 

by Health 

Insurance 

other than 

Medicaid 

[Yes or 

No] If yes, 

what 

insurance? 

[22]

 

 

 
APPENDIX H

Medical Child Support Working Group Report Page A-67 

Adults 

living in 

the home 

NAMES [23]

Social Security 

Number 

[optional][24]

 If employed by a public agency in the State, what agency? [25] 

 

 

 

III. Income and Child Care Payments

List all the Income Received by Family Members Listed Above (Attach Extra Sheet if Needed)

Name of person(s) working or 

receiving money* [26]

Who provides the money? [27] 

Employer, program or person

How Often? [28] 

Weekly, twice a 

month, monthly

What amount? [29] 

Before taxes or any 

deductions

1. 

2. 

3. 

*Be sure to include all sources of gross income (before taxes) such as wages, dividends & interest, TANF, SSI annuities, pension, disability, child support, alimony, cash 

gifts, & other unearned income.

List the payments made for child care (or care for an adult who cannot care for himself) so that someone in your 

household can work. [30]

Name of person(s) who works Name of 

Person Care 

For

Under 

Age 2?

How 

Often?

What amount?

 Yes ' No '
APPENDIX H

Page A-68 Medical Child Support Working Group Report 

 

IV. Medicaid Questions 

Is any child: [31] Pregnant: Yes ' No ' In an 

Institution: Yes ' No ' 

Do any of the children have unpaid medical bills 

from the last 3 months? [32] Yes ' No '

Social Security Number (SSN) [33]

If you are applying for Medicaid for a child, you are not required to provide your own Social Security Number (SSN), 

but we must have the child’s SSN in order for the child to receive Medicaid. If you are applying for CHIP [State-specific 

program name] for a child, you are not required to provide either your own or the child’s SSN. If you are applying for 

Medicaid for yourself, you must provide your SSN. This policy is dictated by section 1137(a(1) of the Social Security 

Act and the Medicaid regulations at 42 CFR 435.910. The Medicaid agency will use the SSN to verify your income, 

eligibility, and the amount of medical assistance payments we will make on your behalf. It is possible that the Medicaid 

agency will also use the SSN to determine another person’s right to Medicaid or to comply with Federal law requiring 

that we release information from Medicaid records. The information may be matched with the records in other 

agencies, such as the Social Security Administration or the Internal Revenue Service. These matches may be done by 

computer or on an individual basis. 

Rights and Responsibilities [34] 

I agree to the release of personal and financial information from this application form 

and supporting documents to the agencies that run these programs so that they can 

evaluate it and verify eligibility. I understand that the agencies that run the programs 

will determine confidentiality of this information according to the federal laws, 42CFR 

431.300-431.307.1, and any applicable federal and state laws and regulations. 

Officials from the programs that I, or members of my household, have applied for 

may verify all information on this form. 

I understand that I must immediately tell the Medicaid agency about any changes in 

information on this form. 

I understand that I may be asked to provide additional information. 

I understand my eligibility will not be affected by my race, color, national origin, age, 

disability, or sex, except where this is required by law. 

 I understand that this application is an application for one kind of children’s health 

benefits under Medicaid and is not a full Medicaid application. I understand that if I 

am not found eligible for this kind of children’s health benefits under Medicaid, I may 

be eligible for Medicaid benefits on some other basis and have a right to complete a 

full Medicaid application. 

I have the right to appeal any decisions made by a local Medicaid program. 

Information on the appeals process can be obtained from the local Medicaid agency. 

I understand that anyone who knowingly lies or misrepresents the truth or arranges 

for someone to knowingly lie or misrepresent the truth is committing a crime which 

can be punished under federal law, state law, or both. I understand that I may also be 

liable for repaying in cash the value of the benefits received and my be subject to civil 

penalties. 

I certify under penalty of perjury that everything on this application form is the truth as 

best I know.

 

Signature [35] Date 

Date Received by Agency [36] 
APPENDIX H

Medical Child Support Working Group Report Page A-69 

Application and Enrollment Requirements for Medicaid and Separate SCHIP

1. Requirements for Separate State (non-Medicaid) CHIP 

If a State chooses to develop a separate State (non-Medicaid) CHIP program, the only 

Federal requirements for the application and enrollment process for CHIP are: 

• A screening and enrollment process designed by the State to ensure that Medicaid 

eligible children are identified and enrolled in Medicaid; and 

• For qualified aliens, verification of applicant’s immigration status with INS. 

2. Requirements for Medicaid

The Federal requirements for the application and enrollment process for Medicaid 

(including CHIP-related Medicaid programs) are explained in 42 CFR 435.900ff. 

Specifically, States must: 

• Give individuals the opportunity to apply for Medicaid without delay. Pregnant 

women and infants must have the opportunity to apply for Medicaid at required 

outstation locations other than welfare offices. 

• Require a written application on a form prescribed by the State Medicaid agency 

and signed under a penalty of perjury. The application must be filed by the 

applicant, an authorized representative, or if the applicant is incompetent or 

incapacitated, someone acting responsibly for the applicant. 

• Provide written (or oral, if appropriate) information to all applicants on Medicaid 

eligibility requirements, available services, and the rights and responsibilities of 

applicants and recipients. The State also must have pamphlets or bulletins that 

explain the eligibility rules and appeal rights in simple, understandable terms. 

• Obtain the Social Security number (SSN) of the applicant. (Note that the SSN 

cannot be required of other family members who are not applying for Medicaid). 

• If the applicant is a qualified alien, obtain documentation of satisfactory 

immigration status and verify immigration status with INS. (Note that this 

requirement does not apply to parents if the parents are not applying for 

Medicaid). 

• Take action on applications within a time standard set by the State (not to exceed 

45 days for individuals who apply on a basis other than disability) and inform the 

applicant about when a decision can be expected. 

• Record in each applicant’s case record facts to support its eligibility decision. 

• Send a written decision notice to every applicant. If the application is denied, the 

notice must include the reasons for the denial, the specific regulations supporting 

the action and an explanation of the applicant’s right to a hearing. 
APPENDIX H

Page A-70 Medical Child Support Working Group Report 

It also is important to note that the State’s application and enrollment process must be 

consistent with our data collection requirements. 

Federal law requires no verification of information pertaining to eligibility for children 

under 

Medicaid other than the requirement for verification of immigration status of qualified 

aliens, 

and the post-eligibility requirement in Section 1137 for an income and eligibility 

verification 

system (IEVS). Under IEVS, the State must request information from other Federal and 

State agencies to verify the applicant’s income and resources. The applicant must be 

informed 

in writing, at the time of application, that the agency will be requesting this information. 

Last updated September 17, 1998