Federal Register / Vol. 71, No. 182 / Wednesday, September 20, 2006 / Proposed Rules 54965 

* * * * * 

[FR Doc. E6–15471 Filed 9–19–06; 8:45 am] 

BILLING CODE 6560–50–S 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Administration for Children and 

Families 

45 CFR Parts 302, 303, 304, 305, and 

308 

RIN 0970–AC22 

Child Support Enforcement Program; 

Medical Support 

AGENCY: Administration for Children 

and Families, Department of Health and 

Human Services (HHS). 

ACTION: Notice of Proposed Rulemaking 

(NPRM). 

SUMMARY: These proposed regulations 

would revise Federal requirements for 

establishing and enforcing medical 

support obligations in child support 

enforcement program cases receiving 

services under title IV–D of the Social 

Security Act (the Act). The proposed 

changes would: require that all support 

orders in the IV–D program address 

medical support; redefine reasonablecost health insurance; require health 

insurance to be accessible, as defined by 

the State; and make conforming changes 

to the Federal substantial-compliance 

audit and State self-assessment 

requirements. 

DATES: Consideration will be given to 

comments received by November 20, 

2006. 

ADDRESSES: Send comments to the 

Office of Child Support Enforcement, 

Administration for Children and 

Families, 370 L’Enfant Promenade, SW., 

4th Floor, Washington, DC 20447, 

Attention: Director, Division of Policy, 

Mail Stop: OCSE/DP. Comments will be 

available for public inspection Monday 

through Friday, 8:30 a.m. to 5 p.m. on 

the 4th floor of the Department’s offices 

at the above address. A copy of this 

regulation may be downloaded from 

http://www.regulations.gov. In addition, 

you may transmit written comments 

electronically via the Internet: http:// 

www.regulations.acf.hhs.gov. 

FOR FURTHER INFORMATION CONTACT: 

Thomas G. Miller, OCSE Division of 

Policy, 202–401–5730, e-mail: 

tgmiller@acf.hhs.gov. Deaf and hearing 

impaired individuals may call the 

Federal Dual Party Relay Service at 1–

800–877–8339 between 8 a.m. and 7 

p.m. eastern time. 

SUPPLEMENTARY INFORMATION: 

Statutory Authority 

This notice of proposed rulemaking is 

published under the authority granted 

to the Secretary of Health and Human 

Services (the Secretary) by section 1102 

of the Social Security Act, 42 U.S.C. 

1302. Section 1102 of the Act authorizes 

the Secretary to publish regulations, not 

inconsistent with the Act, that may be 

necessary for the efficient 

administration of the title IV–D 

program. 

This proposed rule is also published 

in accordance with section 452(f) of the 

Act, as amended by section 7307 of the 

Deficit Reduction Act of 2005 (DRA of 

2005), which directs the Secretary to 

issue regulations which require that 

State agencies administering IV–D 

programs ‘‘enforce medical support 

included as part of a child support order 

whenever health care coverage is 

available to the noncustodial parent at 

reasonable cost.’’ Section 7307 of the 

DRA of 2005 also added two additional 

sentences to section 452(f) of the Act: 

‘‘A State agency administering the 

program under this part [title IV–D] may 

enforce medical support against a 

custodial parent if health care coverage 

is available to the custodial parent at a 

reasonable cost, notwithstanding any 

other provision of this part [title IV–D].’’

And: ‘‘For purposes of this part, the 

term ‘medical support’ may include 

health care coverage, such as coverage 

under a health insurance plan 

(including payment of costs of 

premiums, co-payments, and 

deductibles) and payment for medical 

expenses incurred on behalf of a child.’’

This proposed regulation is also 

published in accordance with section 

466(a)(19) of the Act, as amended by 

section 7307 of the DRA of 2005, which 

requires States to have in effect laws 

requiring the use of procedures under 

which all child support orders enforced 

pursuant to title IV–D of the Act ‘‘shall 

include a provision for medical support 

for the child to be provided by either or 

both parents.’’

Background 

In 2001, the Census Bureau estimated 

that 9.2 million of the nation’s children 

under the age of 19 (12.1 percent) were 

without health insurance (Children With 

Health Insurance: 2001, Current 

Population Reports, U.S. Census 

Bureau, August 2003). Of all children, 

52.4 million were covered through 

private health insurance. Ninety-three 

percent of the 52.4 million children 

were covered through an employersponsored plan (ESI) and 19.5 million 

had coverage through a government 

program. Children With Health 

Insurance: 2001, reports that the rate of 

uninsured children in 2001 was lower 

than reported in 1997, when Congress 

established the State Children’s Health 

Insurance Program (SCHIP). 

A more recent Census Bureau report, 

Health Insurance Coverage in the 

United States: 2002 (Current Population 

Reports, U.S. Census Bureau, September 

2003), found that the proportion of 

children who remained uninsured did 

not change from 2001 to 2002, despite 

an increase in the number and 

percentage of uninsured in the general 

population to 43.6 million people (15.2 

percent) in 2002. It appears children 

were largely protected as a result of 

increased government-sponsored health 

insurance coverage through Medicaid, 

SCHIP and military health care (Health 

Insurance Coverage: 2002). While public 

coverage increased, the percentage of 

people covered by employmentsponsored health insurance (ESI) 

dropped in 2002, from 62.6 percent to 

61.3 percent, driving an overall increase 

of 2.4 million U.S. residents who were 

uninsured during the entire year of 

2002. Only for children did expanded 

public coverage offset the decrease in 

ESI. 

The income disparity as to who does 

or does not receive ESI is widely 

documented. Children With Health 

Insurance: 2001 estimates that 85 

percent of children in families with 

incomes of at least 250 percent of the 

poverty level have ESI, compared with 

51.3 percent of children in families with 

incomes between 133 and 200 percent 

of poverty level. In 2002 the coverage 

rate for households with incomes of 

$25,000 to $50,000 decreased 1.5 

percentage points from 2001 rates 

(Health Insurance Coverage: 2002). 

For children who live apart from one 

or both of their parents, securing private 

health care coverage or defraying the 

cost of public benefits has proven even 

more complex and burdensome. From 

its creation in 1975 Part D of title IV of 

the Act, the Child Support Enforcement 

Program (IV–D program), has been 

responsible for locating noncustodial 

parents; establishing paternity; 

establishing, modifying and enforcing 

child support orders; and collecting and 

distributing child support owed by the 

noncustodial parent. The initial focus of 

this Federal/State/local partnership was 

to secure reimbursement for Federal 

welfare expenditures from the 

noncustodial parents of these children. 

The Child Support Enforcement 

Amendments of 1984 added a new 

section to the Act, requiring State IV–D 

agencies to petition for health care 

coverage in all IV–D cases in which 


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such coverage is available at reasonable 

cost. The Secretary of HHS defined 

‘‘reasonable cost’’ by regulation at 45 

CFR 303.31: The cost of health care 

coverage is reasonable if it is available 

through the child support noncustodial 

parent’s employment. 

Federal regulations require that the 

State child support guidelines must, at 

a minimum, ‘‘provide for the 

child(ren)’s health care needs, through 

health insurance coverage or other 

means.’’ (45 CFR 302.56(c)(3)). The 

mechanism for accomplishing this 

mandate is determined by each State. 

Generally, guidelines use one or a 

combination of the following methods: 

One parent is ordered to provide health 

insurance and the cost is deducted from 

his/her income before the support 

obligation is calculated or the cost of 

health insurance is added to the basic 

award and prorated between the 

parents. Where there is no ESI or there 

are significant uninsured or 

extraordinary medical expenses, States 

generally add an amount to the support 

award and apportion it between the 

parents or consider such expenses a 

basis to deviate from the guideline 

amount. 

The Federal statute and regulations 

fostered cooperation between State IV–

D and Medicaid agencies. Under 42 CFR 

433.151, Medicaid State plans must 

provide for entering into cooperative 

agreements for enforcement of rights to 

and collection of third party benefits 

with, among other agencies, IV–D 

agencies. Child support program 

regulations required State child support 

agencies to notify Medicaid agencies 

when private family health coverage 

was obtained or discontinued for a 

Medicaid-eligible person, and 

authorized Federal financial 

participation for the cost of these 

services (45 CFR 304.20). 

Seeking to remove legal impediments 

to securing private health care coverage 

from noncustodial parents of child 

support-eligible children, the Omnibus 

Budget Reconciliation Act of 1993 

(OBRA ’93) amended the Employee 

Retirement Income Security Act of 1974 

(ERISA), creating the Qualified Medical 

Child Support Order (QMCSO). Every 

employer group health plan must honor 

a properly prepared QMCSO that 

requires a plan participant to provide 

coverage for a dependent child (29 

U.S.C. 1169(a)). OBRA ’93 required 

States as a condition of Medicaid 

funding to enact laws prohibiting 

employers and insurers from denying 

enrollment of a child under a parent’s 

health coverage plan due to various 

factors such as: The child’s birth out-ofwedlock, failure to claim the child as a 

dependent on the parent’s Federal 

income tax return, or the child’s 

residence outside the insurer’s service 

area or with someone other than the 

employee. 

Medical child support was 

strengthened in the Personal 

Responsibility and Work Opportunity 

Reconciliation Act of 1996 (PRWORA). 

This legislation mandated that all child 

support orders contain provisions for 

medical support. [The Child Support 

Performance and Incentive Act of 1998 

(CSPIA) discussed below, later moved 

this requirement from section 466(a)(19) 

to section 452(f) of the Act. The DRA of 

2005 moved the requirement back to 

section 466(a)(19) as noted under 

Statutory Authority.] 

States also were required to provide a 

simple administrative process for 

enrolling a child in a new health plan 

using a notice of coverage. Section 

609(a) of ERISA was amended to expand 

the definition of ‘‘medical child support 

orders’’ to permit certain administrative 

orders to be considered QMCSOs, rather 

than just court orders. 

Recognizing that States’ efforts to 

secure and enforce medical support 

orders against child support obligors 

had met with limited success and that 

significant problems remained, Congress 

enacted CSPIA. This law included even 

stronger provisions to improve medical 

support enforcement in the IV–D 

program. Further, the CSPIA directed 

the Secretaries of HHS and the 

Department of Labor (DOL) to establish 

a Medical Child Support Working Group 

(Working Group). The Working Group 

included thirty members representing: 

HHS and DOL, State child support 

directors, State Medicaid directors, 

employers (including payroll 

professionals), sponsors and 

administrators of group health plans 

defined by section 607(1) of ERISA, 

organizations representing children 

potentially eligible for medical support, 

SCHIP programs, and organizations 

representing child support 

professionals. The Working Group was 

asked to identify impediments to the 

effective enforcement of medical 

support by State IV–D agencies and 

make recommendations to the 

Secretaries to eliminate them. 

A final report, 21 Million Children’s 

Health: Our Shared Responsibility, 

offered 76 recommendations broken into 

five categories: Federal Statute/ 

Legislation; Federal Regulation/ 

Guidance; Best Practice; Technical 

Assistance and Education; and Research 

and Demonstration. This proposed rule 

responds to several of the Working 

Group’s key recommendations. The 

Secretaries of HHS and DOL jointly 

transmitted 21 Million Children to the 

Congress on August 16, 2000. 

CSPIA also directed HHS and DOL to 

develop and promulgate a National 

Medical Support Notice (NMSN), to be 

issued by State IV–D agencies as a 

means of enforcing health care coverage 

provisions contained in child support 

orders. HHS and DOL issued the final 

rule on the NMSN jointly on December 

27, 2000 (amending 29 CFR part 2590 

and 45 CFR part 303) (65 FR 82154). All 

States have now implemented the 

NMSN. Under ERISA, an appropriately 

completed NMSN is deemed to be a 

QMCSO for the child, and the employer 

is required to comply with the Notice in 

a timely manner. 

After review of 21 Million Children 

and promulgation of the NMSN, OCSE 

consulted with a wide range of program 

stakeholders in 2001 and 2002, 

including State and local workers and 

administrators, national organizations, 

advocates and other parties interested in 

medical support enforcement. These 

consultations explored the feasibility 

and impact of the Working Group’s 

recommendations, establishing which 

recommendations had wide support. 

Those included in the consultations 

were the National Governors 

Association (NGA), the National 

Conference of State Legislators (NCSL), 

the American Public Human Services 

Association (APHSA), the National 

Child Support Enforcement Association 

(NCSEA), the National Council of Child 

Support Directors (NCCSD), the Eastern 

Regional Interstate Child Support 

Association (ERICSA), and the Western 

Interstate Child Support Council 

(WICSEC). 

Resolutions passed by NCSEA, 

NCCSD, and ERICSA urged OCSE to 

expand the definition of reasonable cost 

under 45 CFR 303.31 to include both 

parents and to decouple it from ESI. 

These organizations joined in the 

Working Group’s conclusion that the 

definition ‘‘deeming employmentrelated coverage to be per se reasonable’’

in cost is an artifact of earlier decades 

when employment-related insurance 

was both widely available and more 

heavily subsidized by the employer. 

Therefore, there is broad support for 

eliminating the employer-tied definition 

of reasonable cost. 

Additionally, the HHS study Health 

Care Coverage Among Child SupportEligible Children, published in 2002 

after the Working Group’s Report, 

suggests that untapped employersponsored insurance through custodial 

mothers and their spouses might reduce 

the share of children without private 

health insurance more significantly than 

similar insurance through noncustodial 


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parents, for a variety of reasons, 

including availability, accessibility, cost 

and preference. ‘‘Half of child supporteligible children living with their 

mothers are currently covered by 

[employer-sponsored] insurance. The 

sources of this coverage are as follows: 

the resident mother (26 percent), the 

noncustodial father (13 percent), a stepfather (7 percent), and another adult in 

the child’s household (4 percent),’’

(HHS, December 2002). Another 6.7 

percent appear to have access to 

employer-sponsored insurance (ESI) but 

are not covered. (Custodial fathers are 

more likely to either provide ESI or have 

access to it). Therefore, it appears that 

custodial mothers are the most 

important source of ESI for child 

support-eligible children living with 

their mothers, and provide more than 

one-quarter of those children with ESI. 

Indeed, the Working Group’s decision 

matrix to determine appropriate health 

insurance coverage, presented in 21 

Million Children, contains a preference 

for using the custodial parent’s (or stepparent’s) health insurance. 

Provisions of the Regulation 

We propose amending parts 302, 303, 

304, 305, and 308, as discussed below. 

Part 302 

Section 302.56—Guidelines for Setting 

Child Support Awards 

Currently, under § 302.56(c)(3), the 

State guidelines for setting and 

modifying child support awards must 

provide for the child(ren)’s health care 

needs, through health insurance 

coverage or other means. We propose to 

amend § 302.56(c)(3) to require that 

guidelines ‘‘address how the parents 

will provide for the child(ren)’s health 

care needs through health insurance 

coverage and/or through cash medical 

support in accordance with § 303.31(b) 

of this chapter.’’

The recommendations of the Working 

Group grew from a fundamental 

understanding that parents share 

primary responsibility for their 

children’s needs. The proposed 

regulation clarifies that the resources of 

both parents must be considered. The 

Working Group found that ‘‘* * * only 

27 States’’ child support guidelines 

direct the decision maker to consider 

both parents as potential sources of 

health care coverage’’ (21 Million 

Children). 

The proposed language is purposely 

broad, ensuring that child support 

guidelines consider not only health 

insurance coverage that may be 

available from either, or both parents, 

but also how the parents will meet the 

child’s health care needs when no 

insurance is available, when the cost of 

insurance is beyond the reasonable 

means of the parents, or where the cost 

is extraordinary or unreimbursed by 

insurance. It is possible that both health 

insurance coverage and cash medical 

support would be included in a support 

order. For example, where a custodial 

parent has access to maintain health 

insurance coverage for the parties’ child, 

the noncustodial parent may be required 

to pay a share of the premium’s cost. 

And each parent may be ordered to pay 

a fixed sum or a percentage of the cost 

of allergy shots, or orthodontic 

treatment or psychological counseling, 

not covered by insurance. 

This regulation does not mandate that 

State guidelines label the payment of 

medical costs as a stand-alone item. 

States are free to incorporate health 

costs within an existing methodology, 

such as those described below, so long 

as the insurance and resources of both 

parents are considered. The sole 

limitation is that considerations of 

accessibility and affordability must be 

addressed in accordance with 

§ 303.31(b), as proposed. 

Currently, the health insurance 

premium to cover the child is generally 

either deducted from the income of the 

parent providing coverage or treated as 

an ‘‘add on’’ to the basic support 

obligation, which may be further 

apportioned. Uninsured and 

extraordinary medical expenses are 

usually either an ‘‘add on’’ or treated as 

a factor allowing deviation from the 

guideline amount. 

The Working Group acknowledged 

the variation in approach. The elected 

methodology clearly affects the amount 

of the support obligation. These are 

policy choices left to each State. Each 

State should ensure that its child 

support guidelines address with 

specificity how the cash child support 

award would then ‘‘* * * increase or 

decrease in order to account for health 

care premiums, and child support 

orders should clearly specify how such 

amounts are to be allocated between the 

parents’’ (21 Million Children). 

Part 303 

As discussed below, we propose one 

change to case closure regulations at 

§ 303.11, to address the circumstances 

under which a child-only Medicaid case 

receiving IV–D services may be closed. 

The other proposed amendments to 

part 303 incorporate major 

recommendations of the Working 

Group. They shift the focus of providing 

health insurance from the non-custodial 

parent with an employer-related or 

other group plan, to either parent, to the 

extent that insurance coverage is 

accessible and available at reasonable 

cost. The amendments also broaden 

medical child support by specifically 

addressing cash medical support. 

Section 303.11—Case Closure Criteria 

Section 303.11(b)(11) states that in 

order to be eligible for closure, a case 

must meet the following criterion: ‘‘In a 

non-IV–A case receiving services under 

section 302.33(a)(1)(i) or (iii), the IV–D 

agency documents the circumstances of 

the recipient of services’s 

noncooperation and an action by the 

recipient of services is essential for the 

next step in providing IV–D services.’’

Currently § 303.11(b)(11) allows case 

closure for noncooperation only for IV–

D applicants (§ 302.33(a)(1)(i)) or former 

IV–A, IV–E foster care or Medicaid 

families (§ 302.33(a)(1)(iii)). States have 

complained about lack of cooperation 

by custodial parents of children in 

child-only Medicaid cases and the 

inability to either ensure cooperation or 

close the case. 

If, in a child-only Medicaid case, the 

IV–D agency documents that the 

custodial parent has not cooperated and 

an action by the custodial parent is 

essential for the next step in providing 

IV–D services, we believe it would be 

appropriate, after meeting notice and 

waiting period requirements under 

§ 303.11(c), for the IV–D agency to close 

the case under § 303.11(b)(11). We 

propose to authorize a State IV–D 

agency to close such cases for 

noncooperation by adding references in 

§ 303.11(b)(11) to child-only Medicaid 

cases receiving services under 

§ 302.33(a)(1)(ii), which requires IV–D 

agencies to provide services to non-IV–

A Medicaid recipients. We do this by 

expanding the reference in this section 

to include the whole of § 302.33(a)(1). 

However, we continue to encourage 

State Medicaid agencies to refer cases to 

IV–D agencies when it is appropriate, 

and to develop criteria and procedures, 

in conjunction with State IV–D 

agencies, for appropriate referrals. 

The proposed regulation would 

authorize States to close these cases 

using the Secretary’s rulemaking 

authority under section 1102 of the Act 

to ensure efficient administration of his 

functions under section 452 of the Act. 

The Secretary is responsible under 

section 452(a)(1) for setting standards 

determined to be necessary to assure 

IV–D programs will be effective. 

Allowing States to close cases when the 

custodial parent is not cooperating with 

the IV–D agency will allow States to 

focus on cases in which the custodial 

parent is cooperating with the State in 


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54968 Federal Register / Vol. 71, No. 182 / Wednesday, September 20, 2006 / Proposed Rules 

its efforts to secure support for his/her 

children. 

Section 303.31—Securing and Enforcing 

Medical Support Obligations 

Section 303.31(a) 

We have added a new paragraph (a)(1) 

to define cash medical support as ‘‘an 

amount ordered to be paid toward the 

cost of health insurance provided by a 

public entity or by another parent 

through employment or otherwise, or 

for other medical costs not covered by 

insurance.’’ This would include the cost 

of: (1) Premiums when health insurance 

is provided by another parent or 

through Medicaid or SCHIP; (2) medical 

care such as orthodontia not covered by 

available health insurance; or (3) 

medical costs when no reasonable or 

accessible insurance is available. A 

health insurance premium or cash 

medical support obligation is current 

support for purposes of distribution and 

allocation between cash child support 

and cash medical support, as discussed 

later in this preamble. 

Currently, § 303.31(a)(2) specifies that 

health insurance includes fee for 

service, health maintenance 

organization, preferred provider 

organization, and other types of 

coverage under which medical services 

could be provided to dependent 

children of noncustodial parents. We 

propose to amend § 303.31(a)(2) by 

deleting reference to the noncustodial 

parent and referring instead to either 

parent to clarify that either parent could 

be ordered to provide health care 

coverage. 

Under current § 303.31(a)(1), health 

insurance is considered reasonable in 

cost if it is available through an 

employment-related or other group 

health insurance, regardless of service 

delivery mechanism. We proposed to 

renumber this provision as 

§ 303.31(a)(3) and to revise it as follows: 

‘‘Cash medical support or private health 

insurance is considered reasonable in 

cost if the cost to the obligated parent 

does not exceed five percent of his or 

her gross income or, at State option, a 

reasonable alternative income-based 

numeric standard defined in State child 

support guidelines adopted in 

accordance with § 302.56(c).’’ We are 

using the Secretary’s rulemaking 

authority under section 1102 of the Act 

to update an obsolete regulatory 

requirement to recognize the evolution 

of the health care system over the past 

decade, particularly with respect to 

availability of health insurance through 

the workplace. Use of 1102 authority to 

update this definition would eliminate 

the requirement for IV–D programs to 

consider health insurance available 

through employment to be reasonable in 

cost, and contribute to the State’s and 

Secretary’s responsibilities to operate 

effective programs. 

A major focus of the Working Group’s 

recommendations was redefining 

‘‘reasonable cost’’ in existing 

regulations. Research completed after 21 

Million Children supported the Working 

Group’s recommendation that it was 

appropriate to remove from the 

regulation the conclusion that health 

insurance through the noncustodial 

parent’s employer is de facto available 

at reasonable cost. During its 

consultation process on the Working 

Group’s recommendations, OCSE has 

been urged to change the existing 

regulation to provide a definition of 

reasonable cost that considers the 

parent’s ability to pay. 

The proposed rule changes in this 

Notice adopt the Working Group’s 

conclusion that a new measure is 

required to ascertain whether private 

health insurance is ‘‘reasonable in cost.’’

For many, the cost of obtaining such 

coverage, even when offered by an 

employer, is beyond their reasonable 

means. 

The trend over the last 20 years is 

significantly increased employee costs 

for ESI coverage. At the time the 

existing regulation was enacted, a 

majority of employers offered 

dependent health care coverage to their 

employees at little or no cost. A 1997 

General Accounting Office report 

estimated that ‘‘* * * in 1980, 51 

percent of employers who offered 

dependent coverage fully subsidized the 

cost, but in 1993, only 21 percent of 

employers did so.’’ The recent Census 

Bureau report, Health Insurance 

Coverage in the United States: 2002, 

reports that 30.8 percent of workers 

employed for firms with fewer than 25 

employees are covered by their own ESI, 

compared with 68.7 percent of covered 

workers in firms with 1000 or more 

employees. Even within the few years 

since 21 Million Children was 

published, the cost to employees has 

risen to more than 50 percent of the 

average child support received (U.S. 

Census Bureau, Child Support for 

Custodial Mothers and Fathers 1997). 

State child support enforcement 

officials have been concerned that the 

cost of health insurance would 

dramatically and disproportionately 

reduce the cash child support award, 

leaving the custodial parent with 

insufficient funds to meet the child’s 

daily living expenses, and/or so 

impoverish the noncustodial parent as 

to remove his or her incentive to work. 

After considerable debate, the 

Working Group recommended that 

private health insurance coverage be 

deemed reasonable if the cost does not 

exceed five percent of the gross income 

of the parent who provides the coverage 

(21 Million Children). During the 

consultation process, OCSE was made 

aware that States, professional 

organizations and advocacy groups were 

engaged in considerable discussion over 

this recommendation and varied in their 

position. The main division was 

whether each State should be able to set 

the threshold for reasonableness under 

its own guidelines—as some already 

do—or whether the Working Group’s 

five percent of gross income standard 

should be adopted. 

Recently, two States have considered 

how best to handle medical support 

enforcement. A New Jersey grant project 

endorsed a standard of reasonableness 

measured against five percent of the net 

income of the person ordered to provide 

coverage. However, no coverage would 

be required from ‘‘parents whose net 

income is at or below 200 percent of the 

Federal poverty level,’’ unless the 

coverage is available at no cost to the 

parent. See A Feasibility Study for 

Review and Adjustment for Medical 

Support and SCHIP Collaboration 

(Feasibility Study). New Jersey’s report 

is available at http://www.acf.hhs.gov/ 

programs/cse/pol/dcl/dcl-03–10.htm. 

Minnesota’s Medical Child Support 

Workgroup recommended that no 

contribution for medical support be 

required from parents with incomes 

below 150 percent of poverty. For those 

with net incomes between 150 and 275 

percent of the Federal poverty level, five 

percent of adjusted gross income is 

ordered toward the cost of medical 

support. Minnesota’s December 2002 

Report is available at 

(www.dhs.state.mn.us/ecs/ 

ChildSupport/Reports). The limitations 

on ordering a low-income parent to 

provide health insurance offered in both 

studies mirror, in concept, best practice 

recommendations in 21 Million 

Children: Unless insurance is available 

from an employer without an employee 

contribution, enrollment should not be 

ordered against either a parent with 

income at or below 133 percent of the 

Federal poverty level or one whose 

child is covered by Medicaid due to the 

enrolling parent’s income. 

Proposed § 303.31(a)(3) is similar to 

the Working Group’s five percent of 

gross income recommendation and 

clarifies that ‘‘reasonable cost’’

considerations apply where a tribunal is 

ordering health insurance coverage and/ 

or cash medical support. However, this 

rule allows States the option of 


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Federal Register / Vol. 71, No. 182 / Wednesday, September 20, 2006 / Proposed Rules 54969 

adopting, as part of their child support 

guidelines under § 302.56, an alternate 

standard, that is reasonable, incomebased and numeric. We appreciate that 

there are competing interests in 

establishing a reasonable cost standard 

and particularly welcome comments on 

this issue. 

In addition, the proposed definition 

recognizes the possibility that one 

parent may have access to health 

insurance but the other parent may be 

ordered to bear a portion or all of the 

cost of the insurance. Therefore, the 

proposed regulation refers to the cost of 

private health insurance that does not 

exceed five percent of the obligated 

parent’s gross income. 

Section 303.31(b) 

Currently, under § 303.31(b), the 

introductory text specifies that medical 

support enforcement services will be 

provided if rights to medical support 

have been assigned to the State as a 

condition of receiving Medicaid. We 

propose to amend the introductory text 

of § 303.31(b) by deleting the reference 

to assignment of medical support rights 

to the State since the IV–D agency must 

provide medical support enforcement 

services to all IV–D recipients. 

Sections 303.31(b)(1)–(4)—Addressing 

Medical Support in Child Support 

Orders 

To incorporate the concepts of 

including medical support (health 

insurance and/or cash medical support) 

in every order, we propose to revise 

§ 303.31(b)(1)–(4). 

Under existing § 303.31(b)(1), the IV–

D agency is required to petition for 

medical support in a new or modified 

child support order if the noncustodial 

parent has health insurance available at 

reasonable cost, unless the custodial 

parent and child(ren) have satisfactory 

health insurance other than Medicaid. 

From consultations with our individual 

State partners, and as discussed later in 

this preamble, we believe there is a 

national consensus that simply ignoring 

the availability of health care through 

the custodial parent’s employment is 

not in the best interest of children. 

A second concern with the current 

rule is that it may require the 

noncustodial parent to pay for health 

insurance coverage that is not accessible 

to the child, due to distance or to plan 

restrictions that make it virtually 

worthless for the child. A Working 

Group Recommendation proposes a 

modification to Federal regulation: The 

decision-maker establishing or 

modifying a child support order must 

determine whether either the custodial 

or noncustodial parent is able to obtain 

appropriate health insurance coverage. 

If appropriate coverage is available, it is 

to be ordered. Appropriateness is based 

on three factors. The first, affordability 

or reasonable cost, has been discussed 

above and is included in these 

regulations. 

The second component of 

‘‘appropriateness’’ is accessibility. 

Health insurance has little or no value 

if the child does not have geographic 

access to the services provided by the 

coverage. Part of the Working Group’s 

new paradigm for setting medical child 

support orders is that coverage should 

not be ordered where the services and 

providers are unavailable to the child in 

practical terms. The Working Group 

recommends that enrollment of a child 

in private health care coverage is not 

required unless the coverage is found to 

be: available for at least one year based 

on the work history of the parent 

providing coverage and with the child 

living within the geographic area 

covered by the plan or within 30 

minutes or 30 miles of primary care 

services. The Working Group further 

suggests that States be permitted to 

enact an alternate standard. 

OCSE agrees that health insurance 

should not be mandated when the 

covered child cannot use it. However, 

we found no consensus among our 

partners on how to define accessibility 

and concluded that this is not an area 

in which the Federal government 

should be prescriptive. Thus, the 

provisions contained in this proposed 

rule make it a State responsibility to 

define under what circumstances health 

insurance is ‘‘accessible.’’

States are free to incorporate a 

definition that addresses only 

geographic access to services or also to 

address the continuity problem 

recognized by the Working Group. 

There is no public consensus on 

whether and how to measure the value 

of private health insurance to a child 

when it is frequently disrupted. For 

example, New Jersey’s proposed 

medical support guidelines do consider 

the stability of coverage based on 

whether it is likely to be in place for at 

least one year (Feasibility Study). Again, 

we concluded that this judgment is best 

left to the individual States. 

The third component of ‘‘availability’’

that the Working Group recommends is 

whether the health insurance plan is 

comprehensive. We concluded that this 

third measure should not be explicitly 

addressed in Federal requirements, 

beyond the existing requirement in 

§ 303.32(c)(8), relating to the NMSN, 

under which IV–D agencies must choose 

among insurance plans if more than one 

is available and the child is not yet 

enrolled as ordered. 

The Working Group also concluded 

that parents have the primary 

responsibility to meet their children’s 

needs, including health care coverage. 

When one or both parents can provide 

‘‘accessible and affordable health care,’’

that coverage should not be replaced by 

the expenditure of public funds from 

either Medicaid or SCHIP (21 Million 

Children). Given the importance of 

medical support to the well being of 

children, we propose that each newlyestablished or modified order must 

directly address medical support, 

whether or not private health insurance 

is currently available. To petition for 

such relief is ineffective without a 

corresponding, comprehensive 

mechanism for determining how courts 

or administrative hearing bodies will 

allocate this responsibility between the 

parents, under some circumstances 

subsidized by public benefits. 

Rather than looking exclusively to the 

noncustodial parent, private insurance 

available to both the custodial and 

noncustodial parent should be 

considered. And while section 452(f) of 

the Act only requires states to enforce 

medical support orders when the 

obligor is the noncustodial parent, 

section 466(a)(19) of the Act requires 

that States have in effect laws requiring 

the use of procedures under which all 

child support orders enforced under 

title IV–D of the Act ‘‘shall include a 

provision for medical support for a 

child to be provided by either or both 

parents.’’ States will be required to 

submit an amended State plan page 

providing assurances that laws and 

procedures require inclusion of medical 

support provisions in new and modified 

orders. Given both demographics and 

relative ease of use, the Working Group 

concludes that, quite opposite to the 

current rule, there should be a 

preference for coverage available to the 

custodial parent with financial 

contribution by the noncustodial parent. 

Not only does this expand the pool of 

available private health coverage but it 

also provides coverage that is generally 

more accessible to the custodian than 

that provided by the noncustodial 

parent. 

Under proposed paragraph (b)(1), the 

State must petition the court or 

administrative authority to include 

private health insurance coverage in the 

support order if it is accessible to the 

child and available at reasonable cost to 

the obligated parent. If private health 

insurance is not available, then under 

proposed paragraph (b)(2), the IV–D 

agency must petition to include a 

provision for cash medical support in 


rwilkins on PROD1PC63 with PROPOSAL
54970 Federal Register / Vol. 71, No. 182 / Wednesday, September 20, 2006 / Proposed Rules 

all new and modified orders, to 

continue until accessible insurance 

becomes available at reasonable cost. As 

defined by proposed paragraph (a)(1), 

cash medical support includes not only 

payments to cover a child’s uninsured 

medical expenses but also may include 

an amount to be paid toward the cost of 

health insurance provided through a 

government program, such as Medicaid 

or SCHIP, or privately by the other 

parent. For example, if a custodial 

parent of a child enrolled in SCHIP is 

required to pay a co-payment or 

premium for SCHIP, the cash medical 

support obligation of the noncustodial 

parent could be used to pay or 

reimburse the custodial parent for any 

co-payment or premium owed to SCHIP. 

We are proposing paragraphs (b)(1) 

and (2) using the Secretary’s rulemaking 

authority under section 1102 of the Act 

to increase the effectiveness of State IV–

D programs and therefore allow for more 

efficient administration of the 

Secretary’s responsibilities under 

section 452 of the Act. Incorporating the 

concept of accessibility of health care as 

well as providing for a cash medical 

support obligation in the absence of 

health insurance coverage will ensure 

an increase in the availability of health 

insurance coverage for children, and, if 

that is not possible, provide for cash 

medical support to contribute to the 

child(ren)’s medical needs. 

As it is possible for an order to 

include both an order to pay health 

insurance and cash medical support, 

this regulation specifically authorizes 

States to address both health insurance 

coverage and cash medical support. For 

example, pursuant to § 303.31(b)(1), 

where the custodial parent had health 

insurance coverage available through 

his/her employer, the decision-maker 

could first determine that the insurance 

was both accessible to the child (as 

defined by the State) and that the 

obligated parent’s cost was less than five 

percent his/her gross income (or another 

income-based numeric standard enacted 

by the State). The obligated parent could 

be the custodial parent, the 

noncustodial parent, or both parents, 

depending on the circumstances in the 

particular case, the State’s guidelines, 

and how responsibilities are shared 

between the parties. If so, the child 

support order could require the 

custodial parent to enroll the child in 

the health insurance plan. 

The support order could specify 

which parent is responsible for the cost 

of obtaining the coverage or allocate 

responsibility for costs between the 

parents. For example, should the 

custodial parent have access to health 

insurance, and the cost of the insurance 

does not exceed five percent of the 

noncustodial parent’s gross income, the 

custodial parent could enroll the 

child(ren) and the State could order the 

noncustodial parent to pay cash medical 

support towards the cost of the 

employee’s share of health insurance 

coverage by the custodial parent. It 

would be up to the State to determine 

how the premium is paid, directly by 

the noncustodial parent to the plan 

administrator or as reimbursement to 

the custodial parent should he or she 

have premiums withheld from his or her 

income. 

The order should also address 

allocation of the cost of any uncovered 

expense—co-payments, deductibles, 

unreimbursed or extraordinary 

expenses. The same scenario applies 

where the noncustodial parent has 

accessible coverage, available at 

reasonable cost. 

However, private insurance may be 

found to be unavailable where: neither 

parent has access to employersponsored or group coverage; the cost of 

enrollment exceeds five percent of the 

obligated parent’s gross income (or other 

standard elected by the State); or the 

noncustodial parent’s insurance is not 

accessible to the child. In such a case, 

a new or modified support order must 

contain a provision for cash medical 

support in lieu of health insurance, 

consistent with the state’s guidelines. 

The amount of cash medical support 

must be reasonable as defined under 

paragraph (a)(3). The amount paid could 

be used to contribute to the cost of a 

government health insurance program 

and/or to cover a child’s medical needs 

not covered by health insurance. 

If no private health insurance is 

available, the cash medical support 

provision would continue until 

insurance becomes available and the 

order is modified accordingly. State law, 

guidelines, and procedures would 

determine the mechanism to modify the 

support order when private insurance 

becomes available (for example, using 

administrative adjustment, automatic 

modifications, or review and 

modification by the issuing tribunal). 

We appreciate that there are 

competing interests in how States will 

accommodate these changes to 

establishing medical support. Will 

changes to State child support 

guidelines be required? How will cash 

medical support be designated? How 

will orders be modified once private 

health insurance becomes available? We 

particularly welcome comments on 

these issues. 

Under current § 303.31(b)(2), the IV–

D agency is required to petition for 

inclusion of medical support in a new 

or modified support order whether or 

not health insurance is available to the 

noncustodial parent at the time the 

order is entered or the children can be 

immediately added to the health care 

coverage. We propose to delete this 

section because under the Omnibus 

Budget Reconciliation Act of 1993 

(OBRA ’93), an employer receiving a 

QMCSO, including a NMSN, is required 

to immediately enroll the child in the 

health plan, without regard to open 

enrollment periods. Therefore, because 

of the OBRA ’93 requirement, children 

can be immediately added to the health 

care coverage and paragraph (b)(2) is no 

longer accurate. 

Currently, under § 303.31(b)(3), the 

IV–D agency is required to establish 

written criteria to identify cases without 

a medical support order when there is 

high potential for obtaining medical 

support based upon evidence that 

health insurance may be available to the 

noncustodial parent at a reasonable cost. 

We propose to revise this section, 

changing ‘‘cases’’ to ‘‘orders’’, deleting 

the reference to the noncustodial parent, 

since either parent could provide health 

care coverage, and adding a crossreference to § 303.8(d). Section 303.8(d) 

requires that the ‘‘need to provide for 

the child’s health care needs in the 

order, through health insurance or other 

means, must be an adequate basis under 

State law to initiate an adjustment of an 

order, regardless of whether an 

adjustment in the amount of child 

support is necessary.’’ States are free to 

define their own criteria so long as, at 

a minimum, the State meets the 

requirement in § 303.8(d) and includes 

as criteria: evidence, such as from New 

Hire reporting or another database or 

reporting process that health insurance 

is now available to the obligated parent; 

and other facts, as defined by the State, 

and Federal review and adjustment 

requirements in § 303.8(d), that are 

sufficient to warrant modification of the 

order to include medical support. 

Currently, under § 303.31(b)(4), the 

IV–D agency is required to petition the 

court or administrative authority to 

modify a support order to include 

medical support in the form of health 

insurance coverage when cases meet the 

modification criteria established by the 

State for inclusion of medical support. 

We propose in § 303.31(b)(4) to petition 

for medical support and to require the 

IV–D agency to petition the court or 

administrative authority to modify 

support orders to include medical 

support in accordance with the 

proposed regulation when cases meet 

the modification criteria for inclusion of 

medical support discussed above. 


rwilkins on PROD1PC63 with PROPOSAL
Federal Register / Vol. 71, No. 182 / Wednesday, September 20, 2006 / Proposed Rules 54971 

Sections 303.31(b)(5)–(b)(9), and (c)—

Securing and Enforcing Medical 

Support Obligations 

We propose deleting current 

§§ 303.31(b)(5), (7) and (9) that require 

the IV–D agency: to provide the 

custodial parent with ‘‘information 

pertaining to the health insurance 

policy’’ obtained under a support order; 

to enforce health insurance coverage 

ordered but not obtained; and to request 

that employers and health insurers 

inform the agency of lapses in coverage. 

Under OBRA ’93, the plan administrator 

is required to provide information and 

forms regarding the child’s coverage 

directly to the custodial parent. This 

requirement is included on the NMSN. 

Therefore, the requirement in paragraph 

(b)(5) for the IV–D agency to do so is no 

longer necessary. Since states are 

required to use the NMSN to enforce all 

orders for health insurance coverage 

under § 302.32, the separate 

requirement to do so under paragraph 

(b)(7) is unnecessary. The employer’s 

responsibility to notify the IV–D agency 

when an employee-obligor’s health 

insurance has lapsed under paragraph 

(b)(9) is contained in § 303.32(c)(6) and 

on the NMSN itself. 

In accordance with the deletions of 

these sections, the remaining paragraphs 

have been renumbered. Existing 

paragraph (b)(6) becomes proposed 

(b)(5) and existing paragraph (b)(8) 

becomes proposed (b)(6). 

Paragraph 303.31(c) continues to 

require that medical support services 

shall be provided to individuals eligible 

for services under § 302.33. 

Section 303.32—National Medical 

Support Notice 

Currently, under § 303.32(c)(4), 

employers must withhold any employee 

share of premiums and send any 

amount withheld directly to the 

insurance plan. States are required to 

allocate amounts available for income 

withholding across multiple orders 

under § 303.100(a)(5), recognizing that 

there may be insufficient funds to meet 

all of the orders/notices for withholding. 

Similar situations will occur where the 

employee’s income is insufficient to 

meet the mandates to withhold both 

payments for health insurance 

premiums required by the NMSN and 

cash child support under an income 

withholding order. 

Both the Working Group and our 

individual state partners with whom we 

discussed these issues raised concern 

that the cost of health insurance might 

adversely impact funds available for 

cash child support, particularly where 

the obligor is under a support order for 

more than one family. This proposed 

regulation incorporates an allocation 

priority presented in 21 Million 

Children. Using our rulemaking 

authority under section 1102 of the Act, 

the proposed regulation places current 

cash child and spousal support first in 

priority, followed by health insurance 

and cash medical support, then 

arrearages, and finally other child 

support obligations. However, it affords 

the State decision-maker the 

opportunity to require a different 

allocation when the best interest of the 

child so dictates. Some existing State 

laws may need to be amended to meet 

this proposed requirement. 

We propose to revise existing 

paragraph 303.32(c)(4) requiring the 

employer to withhold employee 

contributions for health coverage for the 

children and forward them to the plan. 

Proposed paragraph (c)(4) would require 

employers to: 

‘‘(i) Withhold any obligation of the 

employee for employee contributions 

necessary for coverage of the child(ren), and 

send any amount withheld directly to the 

plan; or (ii) Where there are insufficient 

funds available to meet the employee’s 

contribution necessary for coverage of the 

child(ren) and also to comply with any 

withholding orders received by the employer 

under § 303.100 of this part, up to the limits 

imposed under section 303(b) of the 

Consumer Credit Protection Act (15 U.S.C. 

1673(b)), the employer shall allocate the 

funds available in accordance with 

§ 303.100(a)(5) and the following priority, 

unless a court or administrative order directs 

otherwise: 

(A) Current child and spousal support; 

(B) Health insurance premiums or current 

cash medical support; 

(C) Arrearages; and 

(D) Other child support obligations.’’

This proposed hierarchy places health 

insurance premiums or current cash 

medical support before payment of 

arrearages because premiums and cash 

medical support are considered current 

support for distribution purposes. 

Finally, under current § 303.32(d), the 

effective date for implementing the use 

of the NMSN is specified. We are 

deleting this paragraph as unnecessary 

because all States are using the NMSN. 

The remainder of § 303.32 is unchanged. 

Using the Secretary’s authority to 

regulate under section 1102 of the Act 

to specify the appropriate allocation of 

available funds for health insurance 

premiums, current child support and 

current cash medical support will 

ensure consistency across State 

programs and therefore contribute to the 

effective operation of IV–D programs. 

This allocation formula responds, along 

with the National Medical Support 

Notice, to the Secretary’s responsibility 

under section 452(f) of the Act to issue 

regulations governing the enforcement 

of medical support when included as 

part of a child support order. 

Part 304 

Section 304.20—Availability and Rate 

of Federal Financial Participation (FFP) 

Currently, under § 304.20(b)(11), FFP 

is available for services and activities 

under approved IV–D State plans, 

including required medical support 

activities as specified in §§ 303.30 and 

303.31. To include reference to the 

NMSN requirements in § 303.32, we 

propose to revise § 304.20(b)(11), to read 

as follows: ‘‘Required medical support 

activities as specified in §§ 303.30, 

303.31, and 303.32 of this chapter.’’

Part 305 

Section 305.63—Standards for 

Determining Substantial Compliance 

With IV–D Requirements 

Currently, under § 305.63(c)(5), for the 

purposes of optional Federal audits to 

determine substantial compliance with 

State plan requirements, the State must 

provide certain specified required 

medical support services in at least 75 

percent of the cases reviewed. We 

propose to add the requirements under 

§ 302.32, the National Medical Support 

Notice (NMSN), to the program services 

subject to the substantial compliance 

audit because of the importance of 

ensuring that States meet Federal 

requirements for use of the NMSN. 

We are using our rulemaking 

authority under section 1102 of the Act 

to include reference to the National 

Medical Support Notice requirements 

under § 302.32 in both the Federal audit 

authority under § 305.63 and the State 

self-assessment requirements in § 308.2 

below. The Secretary may conduct 

audits, in accordance with section 

452(a)(C) of the Act, when appropriate, 

to determine the effectiveness of State 

programs. These Federal audits and 

State self-assessments combine to 

ensure that States operate efficient and 

effective IV–D programs. 

Part 308 

Section 308.2—Required Program 

Compliance Criteria 

Currently under § 308.2(e), for 

purposes of the State’s annual selfassessment review and report, the State 

must evaluate whether it has provided 

certain specified required medical 

support services in at least 75 percent of 

the cases reviewed. We are adding 

reference to use of the NMSN as 

required in § 303.32 to the selfassessment process because we failed to 


rwilkins on PROD1PC63 with PROPOSAL
54972 Federal Register / Vol. 71, No. 182 / Wednesday, September 20, 2006 / Proposed Rules 

do so when the NMSN was finalized. 

States should determine as part of their 

annual self-assessments whether 

Federal requirements with respect to 

use of the NMSN are being met. 

We proposed to revise § 308.2(e) by 

deleting current § 308.2(e)(2), (5), (6), 

and (7) since these required program 

compliance criteria refer to 

requirements in § 303.31 that have been 

deleted in the proposed regulation and 

to make the self-assessment 

requirements consistent with other 

changes to the medical support 

enforcement requirements made by this 

regulation. Proposed § 308.2(e)(1) would 

require a determination of whether the 

State is meeting its obligation to include 

medical support that is reasonable and 

accessible, in accordance with 

§ 303.31(b) in at least 75 percent of new 

or modified support orders. 

Under proposed § 308.2(e)(2), States 

are required to assess their own 

performance according to their criteria: 

‘‘If reasonable and accessible health 

insurance was available and required in 

the order, but not obtained, determine 

whether the National Medical Support 

Notice was used to enforce the order in 

accordance with the requirements in 

§ 303.32 of this chapter.’’ Current 

§ 308.2(e)(4) requires States to report 

whether the State Medicaid agency was 

informed ‘‘* * * that coverage had been 

obtained when health insurance was 

obtained,’’ has been renumbered as 

proposed § 308.2(e)(3) and the crossreferenced section has been amended to 

cite § 303.31(b)(5), to comport with the 

changes elsewhere in these proposed 

regulations. 

We propose to add a new § 308.2(e)(4) 

for States to assess their own 

performance with the use of the NMSN: 

‘‘Determine whether the State 

transferred notice of the health care 

provision, using the National Medical 

Support Notice required under § 302.32 

of this chapter, to a new employer when 

a noncustodial parent was ordered to 

provide health insurance coverage and 

changed employment and the new 

employer provides health care 

coverage.’’

Paperwork Reduction Act 

Under the Paperwork Reduction Act 

of 1995, Public Law 104–13, all 

Departments are required to submit to 

the Office of Management and Budget 

(OMB) for review and approval any 

reporting or recordkeeping requirements 

inherent in a proposed or final rule. 

Interested parties may comment to OMB 

on these reporting requirements as 

described below. This NPRM contains 

changes to reporting requirements in 

Part 308, which the Department has 

submitted to OMB for its review. 

Section 308.1(e) contains a 

requirement that a State report the 

results of annual self-assessment 

reviews to the appropriate OCSE 

Regional Office and to the 

Commissioner of OCSE. The 

information submitted must be 

sufficient to measure State compliance 

with Federal requirements for expedited 

procedures and to determine whether 

the program is in compliance with title 

IV–D requirements and case processing 

timeframes. The results of the report 

will be disseminated via ‘‘best 

practices’’ to other States and also be 

used to determine whether technical 

assistance is needed. The State plan 

preprint page for this requirement (page 

2.15, State Self-assessment and Report) 

was approved by OMB on January 18, 

2001, under OMB Number 0970–0223. 

The revisions to section 308.2(e), 

which address securing and enforcing 

medical support, will slightly reduce 

the paperwork burden on States, by 

eliminating three information collection 

and reporting requirements because, 

under these proposed regulations, 

medical support will be included in all 

new and modified support orders, but 

the reduced paperwork burden would 

be negligible. 

Respondents: State child support 

enforcement agencies in the 50 States, 

the District of Columbia, Guam, Puerto 

Rico, and the Virgin Islands. 

This information collection 

requirement will impose the estimated 

total annual burden on the agencies 

described in the table below: 

Information 

collection 

Number of 

respondents 

Responses per 

respondent 

Average 

burden hours 

per response 

Total annual 

burden hours 

Section 308.1 ................................................................................... 54 1 3,866 208,764 

The Administration for Children and 

Families (ACF) will consider comments 

by the public on the proposed 

information collection in order to 

evaluate the accuracy of ACF’s estimate 

of the burden of the proposed collection 

of information. Comments by the public 

on this proposed collection of 

information will be considered in the 

following areas: 

• Evaluating the accuracy of the ACF 

estimate of the burden of the proposed 

collection[s] of information, including 

the validity of the methodology and 

assumptions used; 

• Enhancing the quality, usefulness, 

and clarity of the information to be 

collected; and 

• Minimizing the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technology, e.g., permitting electronic 

submission of responses. 

OMB is required to make a decision 

concerning the collection of information 

contained in these proposed regulations 

between 30 and 60 days after 

publication of this document in the 

Federal Register. Therefore, a comment 

is best assured of having its full effect 

if OMB receives it within 30 days of 

publication. This does not affect the 

deadline for the public to comment to 

the Department on the proposed 

regulations. Written comments to OMB 

for the proposed information collection 

should be sent directly to the following: 

Office of Management and Budget, 

Paperwork Reduction Project, 725 17th 

Street, NW., Washington, DC 20503, 

Attn: Desk Officer for the 

Administration for Children and 

Families. 

Regulatory Flexibility Analysis 

The Secretary certifies, under 5 U.S.C. 

605(b), and enacted by the Regulatory 

Flexibility Act (Pub. L. 96–354), that 

these proposed regulations will not 

result in a significant impact on a 

substantial number of small entities. 

The primary impact is on State 

governments. State governments are not 

considered small entities under the Act. 

Regulatory Impact Analysis 

Executive Order 12866 requires that 

regulations be reviewed to ensure that 

they are consistent with the priorities 

and principles set forth in the Executive 

Order. These proposed rules provide 

solutions to problems in securing 

private health care coverage for children 

who live apart from one or both of their 

parents and the Department has 

determined that they are consistent with 

the priorities and principles set forth in 

the Executive Order. 


rwilkins on PROD1PC63 with PROPOSAL
Federal Register / Vol. 71, No. 182 / Wednesday, September 20, 2006 / Proposed Rules 54973 

These proposed regulations 

implement section 7307 of the Deficit 

Reduction Act of 2005, the 

Administration’s proposal to require 

States to consider medical support 

available to either parent in establishing 

a medical support obligation, and to 

enforce medical support at their option 

when the obligated parent is the 

custodial parent. They also address 

certain recommendations of the Medical 

Child Support Working Group, which 

included public deliberation, and 

additional input from state and local 

IV–D administrators and other child 

support enforcement stakeholders. 

There are no costs associated with 

these proposed rules. They do not 

introduce new requirements for 

including medical support in child 

support orders, a long-standing program 

requirement, but rather broaden States 

options for addressing the availability 

and accessibility of health care 

coverage. For example, by focusing on 

health insurance coverage available to 

either parent, these rules recognize that 

untapped employer-sponsored 

insurance through custodial mothers 

and their spouses might reduce the 

share of children without private health 

insurance. As discussed earlier in the 

preamble, an HHS study Health Care 

Coverage Among Child Support-Eligible 

Children, 2002, found that half of child 

support-eligible children living with 

their mother are currently covered by 

employer-sponsored insurance. 

These regulations are significant 

under section 3(f) of the Executive 

Order because they raise novel policy 

issues and therefore have been reviewed 

by the Office of Management and 

Budget. 

Unfunded Mandates Reform Act 

Section 202 of the Unfunded 

Mandates Reform Act requires that a 

covered agency prepare a budgetary 

impact statement before promulgating a 

rule that includes any Federal mandate 

that may result in the expenditure by 

State, local, and tribal governments, in 

the aggregate, or by the private sector, of 

$100 million or more in any one year. 

The Department has determined that 

these proposed regulations would not 

impose a mandate that will result in the 

expenditure by State, local, and tribal 

governments, in the aggregate, or by the 

private sector, of more than $100 

million in any one year. 

Congressional Review 

These proposed regulations are not a 

major rule as defined in 5 U.S.C., 

chapter 8. 

Assessment of Federal Regulations and 

Policies on Families 

Section 654 of the Treasury and 

General Government Appropriations 

Act of 1999 requires Federal agencies to 

determine whether a proposed policy or 

regulation may affect family well-being. 

These proposed regulations will have a 

positive impact on family well-being as 

defined in the legislation, by providing 

greater access to health care coverage. 

Executive Order 13132 

Executive Order 13132 on Federalism 

applies to policies that have federalism 

implications, defined as ‘‘regulations, 

legislative comments or proposed 

legislation, and other policy statements 

or actions that have substantial direct 

effects on the States, or on the 

distributions of power and 

responsibilities among the various 

levels of government’’. These proposed 

regulations do not have federalism 

implications for State or local 

governments as defined in the Executive 

Order. 

List of Subjects 

45 CFR Part 302 

Child support, Grant programs/social 

programs, Reporting and recordkeeping 

requirements. 

45 CFR Parts 303 and 304 

Child support, Grant programs/social 

programs, Reporting and recordkeeping 

requirements. 

45 CFR Part 305 

Child support, Grant programs/social 

programs, Accounting. 

45 CFR Part 308 

Auditing, Child support, Grant 

programs/social programs, Reporting 

and recordkeeping requirements. 

(Catalog of Federal Domestic Assistance 

Programs No. 93.563, Child Support 

Enforcement Program) 

Dated: February 16, 2006. 

Wade F. Horn, 

Assistant Secretary for Children and Families. 

Approved: June 20, 2006. 

Michael O. Leavitt, 

Secretary, Department of Health and Human 

Services. 

For the reasons discussed above, title 

45 CFR chapter III is amended as 

follows: 

PART 302—STATE PLAN 

REQUIREMENTS 

1. The authority citation for part 302 

continues to read as follows: 

Authority: 42 U.S.C. 651 through 658, 660, 

664, 666, 667, 1302, 1396a(a)(25), 

1396b(d)(2), 1396b(o), 1396b(p), 1396(k). 

2. Amend § 302.56 by revising 

paragraph (c)(3) to read as follows: 

§ 302.56 Guidelines for setting child 

support awards. 

* * * * * 

(c) * * * 

(3) Address how the parents will 

provide for the child(ren)’s health care 

needs through health insurance 

coverage and/or through cash medical 

support in accordance with § 303.31(b) 

of this chapter. 

* * * * * 

PART 303—STANDARDS FOR 

PROGRAM OPERATIONS 

1. The authority citation for part 303 

continues to read as follows: 

Authority: 42 U.S.C. 651 through 658, 660, 

663, 664, 666, 667, 1302, 1396a(a)(25), 

1396b(d)(2), 1396b(o), 1396b(p), and 1396k. 

§ 303.11 [Amended] 

2. In § 303.11, amend paragraph 

(b)(11) by removing ‘‘(i) or (iii)’’ after 

‘‘§ 302.33(a)(1).’’

3. Revise § 303.31 to read as follows: 

§ 303.31 Securing and enforcing medical 

support obligations. 

(a) For purposes of this section: 

(1) Cash medical support means an 

amount ordered to be paid toward the 

cost of health insurance provided by a 

public entity or by another parent 

through employment or otherwise, or 

for other medical costs not covered by 

insurance. 

(2) Health insurance includes fee for 

service, health maintenance 

organization, preferred provider 

organization, and other types of 

coverage which is available to either 

parent, under which medical services 

could be provided to the dependent 

child(ren). 

(3) Cash medical support or private 

health insurance is considered 

reasonable in cost if the cost to the 

obligated parent does not exceed five 

percent of his or her gross income or, at 

State option, a reasonable alternative 

income-based numeric standard defined 

in State child support guidelines 

adopted in accordance with § 302.56(c). 

(b) The State IV–D agency must: 

(1) Petition the court or administrative 

authority to include health insurance 

that is accessible to the child(ren), as 

defined by the State, and is available to 

the obligated parent at reasonable cost, 

as defined under paragraph (a)(3) of this 

section, in new or modified court or 

administrative orders for support; 


rwilkins on PROD1PC63 with PROPOSAL
54974 Federal Register / Vol. 71, No. 182 / Wednesday, September 20, 2006 / Proposed Rules 

(2) If health insurance described in 

paragraph (b)(1) of this section is not 

available at the time the order is entered 

or modified, petition to include cash 

medical support in new or modified 

orders until such time as health 

insurance, that is accessible and 

reasonable in cost as defined under 

paragraph (a)(3) of this section, becomes 

available. In appropriate cases, as 

defined by the State, cash medical 

support may be ordered in addition to 

health insurance coverage. 

(3) Establish written criteria to 

identify orders that do not address the 

health care needs of children based on—

(i) Evidence that health insurance 

may be available to either parent, and 

(ii) Facts, as defined by State law, 

regulation, procedure, or other directive, 

and review and adjustment 

requirements under § 303.8(d) of this 

part, which are sufficient to warrant 

modification of the existing support 

order to address the health care needs 

of children in accordance with 

paragraphs (b)(1) and (2) of this section. 

(4) Petition the court or administrative 

authority to modify support orders, in 

accordance with State child support 

guidelines, for cases identified in 

paragraph (b)(3) of this section to 

include health insurance and/or cash 

medical support in accordance with 

paragraphs (b)(1) and (b)(2) of this 

section. 

(5) Inform the Medicaid agency when 

a new or modified court or 

administrative order for child support 

includes health insurance and/or cash 

medical support and provide the 

information referred to in § 303.30(a) of 

this part to the Medicaid agency when 

the information is available for 

Medicaid applicants and recipients. 

(6) Periodically communicate with the 

Medicaid agency to determine whether 

there have been lapses in health 

insurance coverage for Medicaid 

applicants and recipients. 

(c) The IV–D agency shall inform an 

individual who is eligible for services 

under § 302.33 of this chapter that 

medical support enforcement services 

will be provided and shall provide the 

services specified in paragraph (b) of 

this section. 

4. Amend § 303.32 by revising 

paragraph (c)(4), and removing (d), to 

read as follows: 

§ 303.32 National Medical Support Notice 

* * * * * 

(c) * * * 

(4) Employers must: 

(i) Withhold any obligation of the 

employee for employee contributions 

necessary for coverage of the child(ren), 

and send any amount withheld directly 

to the plan; or 

(ii) Where there are insufficient funds 

available to meet the employee’s 

contribution necessary for coverage of 

the child(ren) and also to comply with 

any withholding orders received by the 

employer under § 303.100 of this part, 

up to the limits imposed under section 

303(b) of the Consumer Credit 

Protection Act (15 U.S.C. 1673(b)), the 

employer shall allocate the funds 

available in accordance with 

§ 303.100(a)(5) of this chapter and the 

following priority, unless a court or 

administrative order directs otherwise: 

(A) Current child and spousal 

support; 

(B) Health insurance premiums or 

current cash medical support; 

(C) Arrearages; and 

(D) Other child support obligations. 

* * * * * 

PART 304—FEDERAL FINANCIAL 

PARTICIPATION 

1. The authority citation for part 304 

continues to read as follows: 

Authority: 42 U.S.C. 651 through 655, 657, 

1302, 1396a(a)(25), 1396b(d)(2), 1396b(o), 

1396b(p), and 1396k. 

§ 304.20 [Amended] 

2. Amend § 304.20(b)(11) by removing 

‘‘§§ 303.30 and 303.31’’ and adding 

‘‘§§ 303.30, 303.31, and 303.32’’ in its 

place. 

PART 305—PROGRAM 

PERFORMANCE MEASURES, 

STANDARDS, FINANCIAL 

INCENTIVES, AND PENALTIES 

1. The authority citation for part 305 

is revised to read as follows: 

Authority: 42 U.S.C. 609(a)(8), 652(a)(4) 

and (g), 658A and 1302. 

§ 305.63 [Amended] 

2. Amend § 305.63(c)(5) by adding 

‘‘and § 302.32’’ after ‘‘under § 303.31’’. 

PART 308—ANNUAL STATE SELFASSESSMENT REVIEW AND REPORT 

1. The authority citation for part 308 

continues to read as follows: 

Authority: 42 U.S.C. 654(15)(A) and 1302. 

2. Amend § 308.2 by revising 

paragraph (e) to read as follows: 

§ 308.2 Required program compliance 

criteria. 

* * * * * 

(e) Securing and enforcing medical 

support orders. A State must have and 

use procedures required under this 

paragraph in at least 75 percent of the 

cases reviewed. A State must: 

(1) Determine whether support orders 

established or modified during the 

review period include medical support 

in accordance with § 303.31(b) of this 

chapter. 

(2) If reasonable in cost and accessible 

health insurance was available and 

required in the order, but not obtained, 

determine whether the National Medical 

Support Notice was used to enforce the 

order in accordance with requirements 

in § 303.32 of this chapter. 

(3) Determine whether the IV–D 

agency informed the Medicaid agency 

that coverage had been obtained when 

health insurance was obtained during 

the review period pursuant to 

§ 303.31(b)(5) of this chapter. 

(4) Determine whether the State 

transferred notice of the health care 

provision, using the National Medical 

Support Notice required under § 302.32 

of this chapter, to a new employer when 

a noncustodial parent was ordered to 

provide health insurance coverage and 

changed employment and the new 

employer provides health care coverage. 

* * * * * 

[FR Doc. 06–7964 Filed 9–19–06; 8:45 am] 

BILLING CODE 4184–01–P 

FEDERAL COMMUNICATIONS 

COMMISSION 

47 CFR Part 73 

[DA 06–1757; MB Docket No. 05–111; RM–

11200] 

Radio Broadcasting Services; 

Cumberland Head, NY 

AGENCY: Federal Communications 

Commission. 

ACTION: Proposed rule; dismissal. 

SUMMARY: The Audio Division has 

dismissed the request of Dana J. 

Puopolo (‘‘Puopolo’’) to allot Channel 

264A at Cumberland Head, New York. 

Puopolo filed a petition for rulemaking 

proposing the allotment of Channel 

264A at Cumberland Head, as the 

community’s first local FM transmission 

service. The proposal was dismissed for 

inability to provide useable service to 

the community due to destructive 

interference from Canadian Station 

CBF–FM. 

FOR FURTHER INFORMATION CONTACT: 

Deborah Dupont, Media Bureau, (202) 

418–2180. 

SUPPLEMENTARY INFORMATION: This is a 

synopsis of the Commission’s Report 

and Order, MB Docket No. 05–111, 

adopted August 31, 2006, and released 

September 5, 2006. The full text of this 

Commission decision is available for 


rwilkins on PROD1PC63 with PROPOSAL