Most Americans view health care for their children and for themselves as one of their topconcerns. The adverse consequences of going without health insurance may include unmet healthand dental needs, lower receipt of preventive services, avoidable hospitalizations, increasedlikelihood of receiving expensive emergency room care, and reduced likelihood that the doctor isfamiliar with the patient's medical history. From a public health perspective, early and frequentmonitoring of children's health is a key component to ensuring the appropriate growth and healthydevelopment of children. From a family perspective, health insurance coverage greatly reducesparental financial and emotional stress. Medical child support benefits families by increasing theincidence of noncustodial parents who obtain private health insurance coverage for their dependentchildren. With medical child support, Congress found a way to make noncustodial parentsresponsible for their children and lessen taxpayer burden by shifting costs from the taxpayers backto the noncustodial parents. Since 1977, Congress has tried to offset some of the costs associated with the Medicaid program by allowing states to require Medicaid recipients to assign their child support rights to thestate and allowing the state to pursue reimbursement of the cost of Medicaid benefits provided to thechild from the child's noncustodial parent (in 1984 mandatory assignment became law). Since 1984,Congress has tried to increase provision of private health care coverage for children whosenoncustodial parent has access to employer-related or group health insurance that is provided at areasonable cost. This is seen as a way to make noncustodial parents responsible for their childrenand lessen taxpayer burden by shifting costs from the taxpayers back to the noncustodial parents. For a detailed legislative history, see Appendix A . In 1984, federal law required that state Child Support Enforcement (CSE) agencies petition for the inclusion of medical support as part of any child support order whenever health care coverageis available to the noncustodial parent at reasonable cost. A 1993 amendment to the EmployeeRetirement Income Security Act (ERISA) required employer-sponsored group health plans to extendhealth care coverage to the children of a parent/employee who is divorced, separated, or nevermarried when ordered to do so by the state CSE agency via a Qualified Medical Child Support Order(QMCSO). The 1996 welfare reform law further strengthened medical support by stipulating thatall orders enforced by the state CSE agency must include a provision for health care coverage. (1) The1996 law also directed the CSE agency to notify the noncustodial parent's employer of theemployee's medical child support obligation. To help obtain health care coverage for children, a1998 law authorized the creation of the National Medical Support Notice (NMSN), a standardizedform, that is the exclusive document which must be used by all state CSE agencies. Anappropriately completed NMSN is considered to be a "Qualified Medical Child Support Order," andas such must be honored by the noncustodial parent's employer's group health plan. The reader should recognize that efforts to improve the establishment and enforcement of medical child support need to be viewed in the current context of high health care costs, a declinein employer-provided health insurance coverage (which is the foundation of the current medical childsupport system), an increase in the share of health insurance costs borne by employees, and a largenumber of children who are uninsured. Moreover, cash support and medical support are not alwayscompatible. For example, if premiums, co-payments, and deductibles of noncustodial parents rise,fairness might suggest that the cash child support payment of noncustodial parents be reduced toreflect payment of additional medical costs. The result, however, would be that custodial parentswould have less income to provide for the basic food, clothing, and shelter needs of their dependentchildren; conversely, if medical support is not available, the family will undoubtedly face direeconomic circumstances if a child becomes seriously ill. The public and policymakers generally agree that establishment and enforcement of medical support, where it is available on reasonable terms, promotes family responsibility, improveschildren's access to health care, and usually saves federal and state dollars. This report provides alegislative history of medical support provisions in the CSE program, describes current policy withrespect to medical child support, examines data on medical child support, and discusses some of theissues related to medical child support. Federal law mandates that states have procedures under which all child support orders arerequired to include a provision for the health care coverage of the child (section 466(a)(19) of theSocial Security Act). Medical support is the legal provision of payment of medical, dental,prescription, and other health care expenses for dependent children by the noncustodial parent. Itcan include provisions to cover health insurance costs as well as cash payments for unreimbursedmedical expenses. The requirement for medical child support is a part of the child support order,and it only pertains to the parent's dependent children. The reader should note that states canestablish child support orders (and thereby medical child support orders) either by a judicial oradministrative process (i.e., through the state courts or through the state CSE agencies). Activitiesundertaken by the state CSE agencies to establish and enforce medical support are eligible for federalreimbursement at the general CSE matching rate of 66%. (2) Medical support can take several forms. The noncustodial parent may be ordered to: (1) provide health insurance if available through his or her employer, (2) pay for private health insurance(health care coverage) premiums or reimburse the custodial parent for all or a portion of the costsof health insurance obtained by the custodial parent for the child, or (3) pay additional amounts tocover some or all of ongoing medical bills as reimbursement for uninsured medical costs. (3) PDFversion Congress has realized for many years that medical support enforcement activities need to bestrengthened. Congress recognized early in the implementation of the CSE program that manynoncustodial parents had private health insurance coverage available through employers, unions orother groups and that such coverage could be extended when available at reasonable cost to providefor dependents' medical expenses. The medical child support provisions benefit families byincreasing the incidence of noncustodial parents who obtain health insurance coverage for theirdependent children. Moreover, the medical child support provisions result in cost savings to statesand the federal governments by reducing Medicaid expenditures when such health care insuranceis available to families who are eligible for Medicaid services. (4) According to federal regulations (45 CFR 303.31), for both families who have assigned their medical support rights to the state and families who have applied for CSE services, the CSE agencymust: (1) Petition the court or administrative authority to include in the child support order health insurance that is available to the noncustodial parent at reasonable cost in new or modified childsupport orders, unless the child has satisfactory health insurance other than Medicaid; (2) Petition the court or administrative authority to include medical support whether or not --(a) health insurance at reasonable cost is actually available to the noncustodial parent at the timethe order is entered; or (b) modification of current coverage to include the child(ren) in questionis immediately possible; (3) Establish written criteria to identify cases not included under the previous two provisionswhere there is a high potential for obtaining medical support based on -- (a) evidence thathealth insurance may be available to the noncustodial parent at a reasonable cost, and (b) facts,as defined by state law, regulation, procedure, or other directive, which are sufficient to warrantmodification of the existing support order to include health insurance coverage for a dependentchild(ren); (4) Petition the court or administrative authority to modify child support orders for cases thatare likely to have access to health insurance to include medical support in the form of healthinsurance coverage; (5) Provide the custodial parent with information pertaining to the health insurance policywhich has been secured for the dependent child(ren); (6) Inform the Medicaid agency when a new or modified court or administrative order for childsupport includes medical support and provide specific information to the Medicaid agencywhen the information is available; (7) If health insurance is available to the noncustodial parent at reasonable cost and has notbeen obtained at the time the order is entered, take steps to enforce the health insurancecoverage required by the support order and provide the Medicaid agency with the necessaryinformation; (8) Periodically communicate with the Medicaid agency to determine if there have been lapsesin health insurance coverage for Medicaid applicants and recipients; and (9) Request employers and other groups offering health insurance coverage that is beingenforced by the CSE agency to notify the CSE agency of lapses in coverage. In addition, a medical child support order must contain the following information in order to be " qualified ": (1) the name and last known mailing address of the participant and each childcovered by the order, except that the order may substitute the name and mailing address of a stateor local official for the mailing address of any child covered by the order; (2) a reasonabledescription of the type of health coverage to be provided (or the manner in which such coverage isto be determined); and (3) the period to which the order applies. To help obtain health care coverage for children, a 1998 law authorized the creation of the NMSN. The NMSN is a standardized federal form that all state CSE agencies are supposed to usewhen issuing a medical support order to employers. An appropriately completed NMSN isconsidered to be a "Qualified Medical Child Support Order," and as such must be honored by thenoncustodial parent's employer's group health plan. (5) Cash child support collections by CSE agencies are distributed in several ways, including in the form of medical support. They may be sent to the family, divided between the state and federalgovernments, used as incentive payments to states, or used for medical support (and sent to theMedicaid agency or the family). For FY2001, total child support collections were distributed asfollows: 87.7% went to families; 5.3% went to the states; 4.7% went to the federal government;1.8% were paid out as incentive payments to states; and 0.5% was paid as medical support. To theextent that medical support has been assigned to the state, medical support collections are forwardedto the Medicaid agency for distribution. Otherwise, the amount collected as medical support is forwarded to the family. (6) (It should be noted thatthe provision of medical support in the form ofhealth insurance coverage is not quantified in the above data.) In general, health insurance is preferred over other types of medical support because it usually is relatively inexpensive for the employee/noncustodial parent (due to the employer contribution),it is easier for the CSE agency to monitor, and it can cover children who otherwise would bedependent on Medicaid benefits (at taxpayer expense). (7) In FY2001, medical support orders wereissued in the form of health insurance in 93% of the cases that included a medical support order (see Table 2 ). The conference report on the Child Support Enforcement Amendments of 1984 (whichbecame P.L. 98-378 ) stated: "... the conferees believe that the best long run solution to achieving medical insurance coverage for all families is the use of private medical insurancewhich is or can be made available through a parent's employer." (8) The medical child support process requires that a state CSE agency issue a notice to the employer of a noncustodial parent, who is subject to a child support order issued by a court oradministrative agency, informing the employer of the parent's obligation to provide health carecoverage for the child(ren). The employer must then determine whether family health care coverageis available for which the dependent child(ren) may be eligible, and if so, the employer must notifythe plan administrator of each plan covered by the National Medical Support Notice. If thedependent child(ren) is eligible for coverage under a plan, the plan administrator is required to enrollthe dependent child(ren) in an appropriate plan. The plan administrator also must notify thenoncustodial parent's employer of the premium amount to be withheld from the employee'spaycheck. (9) This section examines data from three different sources: national data from the U.S. CensusBureau, state CSE program data from the federal Office of Child Support Enforcement (OCSE), andlongitudinal data from the Survey of Income and Program Participation. All of the data indicate thatmuch more needs to be done to improve the establishment and enforcement of medical support, inaccordance with current law. In reviewing the data, it is important to note that (1) in some caseschildren did not receive a child support award of any kind, cash or medical care; (2) even if there wasa cash award, in many cases, health insurance coverage was not included in the award; and (3) evenwhen health insurance coverage was included, in many cases, it was not actually provided by thenoncustodial parent. The U.S. Census Bureau periodically collects national survey information on child support. The Census Bureau interviews a random sample of single-parent families to gather data that can be usedto assess the performance of noncustodial parents in paying child support and providing healthinsurance coverage. The Census data are based on all single-parent families in the United Stateswith children under age 21 who are living apart from their other parent. The Census data are morecomprehensive than CSE program data but do not disaggregate the data on a state-by-state basis. Figure 1 displays data obtained from April supplements to the Census Bureau's Current Population Survey. These supplements provide information on the receipt of child support paymentsby parents living with their own children whose other parent is not living with the family. Figure1 only displays information from cases in which the mother is the custodial parent. (10) Figure 1 indicates that during the period from 1989-1999, the percentage of child support awards thatincluded health insurance increased from 40.1% to 55.6%. Thus, in 1999 about 56% of mothersawarded child support payments had health insurance included in their award. This coincides withcongressional efforts to make health care coverage part of the child support obligation. However,the examination of enforcement, i.e., whether health insurance was actually provided, shows adifferent picture. During the 1989-1999 period, the percentage of child support awards that includedhealth insurance in which health insurance coverage was actually provided by the father droppedalmost 28%, from 67.6% in 1989 to 48.9% in 1999. Thus, in 1999, only 49% of custodial mothersexpecting to receive health benefits for their children actually did so. Source: Prepared by the Congressional Research Service based on data from Census Bureaureports. The third trend line in Figure 1 looks at cases in which health insurance was actually providedby the father as a percentage of all cases in which child support was awarded (as opposed to justthose that included health insurance). It shows a relatively flat line. In other words, during theperiod 1989-1999, the percentage of cases in which health insurance was required to be provided bythe father relative to all cases in which child support was awarded remained relatively unchanged. The percentage was 27.1% in 1989, it jumped to 28.5% in 1991, dropped back to 26.1% in 1993,rose to 27.7% in 1995 and to 29.1% in 1997, and dropped back to 27.2% in 1999. Thus, even thoughthere were some gains in the requirement for provision of health insurance, the actual provision ofhealth insurance to children living with their custodial mothers did not improve much over the 1989-1999 period. Table 1 provides detailed information for 1999, the most recent year for which national data are available, on the inclusion of the father's health insurance in orders received by families headedby mothers. Although the 1999 survey, like the 1997, 1995, 1993, and 1991 surveys, includedcustodial fathers, the table and following discussion are focused solely on custodial mothers. Whileindicating that about 56% of all mothers have health insurance included in their child support award,the table also shows that the probability of health insurance coverage is greatly reduced fornever-married women (39%), black (42%) and Hispanic women (42%), and women with lessschooling (i.e., high school dropouts, 36%). Table 1. Child Support Award Status and Inclusion of HealthInsurance in Child Support Award, by Selected Characteristics of Custodial Mothers,1999 Source: U.S. Census Bureau. 2002. Note: Custodial mothers are defined as women 15 years and older with children under 21 years ofage present from absent fathers as of Spring 2000. a.Â Â Excludes a small number of currently widowed women whose previous marriage ended indivorce. b.Â Â Persons of Hispanic origin may be of any race. PDFversion The medical support provisions appear to be having an impact on the number of children insingle-parent families with medical coverage in their child support orders. According to CSEprogram data, which reflect welfare families who are automatically eligible for CSE services andnonwelfare families who have applied for CSE services, 49% of child support orders in FY2001included health insurance coverage, up from 35% in FY1991. Although the CSE system has beenmaking progress in including health insurance coverage in child support orders, these figures indicatethat many children still lack health insurance coverage. P.L. 105-200 required the Secretary of the Department of Health and Human Services (HHS) to submit a report to Congress containing recommendations on a medical support indicator and itsintegration with the new performance-based incentive funding system established for the federalChild Support Enforcement program. The Medical Support Incentive Work Group (MSIWG), whichwas formed pursuant to this mandate, recommended in 2000 that a medical support performancemeasure be delayed because of the lack of reliable historical information on medical support. Threeof the data elements suggested by the group are now part of the data-reporting form OCSE-157 thatstates are required to complete. The three elements are: (1) cases where medical support is ordered(includes cash medical support and/or health insurance coverage); (2) cases where health insurancespecifically is ordered; and (3) cases where health insurance is provided as ordered. These dataelements appear in Table 2 . Table 2 shows that in FY2001, only 5.452 million (49%) of the 11.050 million families with child support orders had an order that included health insurance. The inclusion of health insurancein child support orders varied considerably from state to state, from a high of 100% in SouthCarolina and 83% in Idaho to a low of 2.1% in the District of Columbia and 10% in Kansas. Moreover, only 18% of health insurance orders actually resulted in health benefits. In other words, in 2001, only 18% of custodial families expecting to receive health benefits for their childrenactually did so. Again, there was wide variation by state; in Ohio health insurance was provided asordered in 86% of the cases that included a health insurance order; the comparable figure in Vermontwas 76%. At the other end of the spectrum, nine states reported that less than 2% of the cases thatincluded a health insurance order actually provided health insurance coverage. Table 2. Medical Child Support, FY2001 Source: Table prepared by the Congressional Research Service based on data from the Office ofChild Support Enforcement. A report prepared in 2000 by the Urban Institute provides longitudinal data on the health care coverage of children living with their mothers (and apart from their fathers). The report is based onanalysis of the 1993 Survey of Income and Program Participation (SIPP), a longitudinal surveycontaining detailed income and demographic information on a nationally representative sample ofapproximately 20,000 households. Two tables from the report are presented in Appendix B . Table B.1 shows that 37% of the child support awards ordered in 1993 included an award ofhealth insurance coverage by the noncustodial father, 16% required the custodial parent to providecoverage, 9% made some other provision for medical costs such as requiring the noncustodial parentto pay medical costs directly or including cash medical support in the child support award. Thirty-eight percent(38%) of child support awards ordered in 1993 included no provision for health carecoverage of any kind. Table B.2 examines the health care coverage of custodial children based on whether the noncustodial father was required to provide health care coverage for his dependent children. Thesecond panel of Table B.2 provides information on the health care coverage status of custodialfamilies in which the father was ordered to provide health care coverage for his dependent children. It shows that 68% of the custodial families reported receiving health care coverage from thenoncustodial father in at least one month of 1993, 17% reported the use of the custodial parent'shealth insurance to provide health care for the children, 11% relied exclusively on Medicaid orMedicare, and 4% were uninsured. Sixty-five percent of the custodial families reported that theprivate coverage from the noncustodial father or custodial mother was valid for all 12 months of theyear. The author of the report made the following remarks regarding the current applicability of the 1993 findings. The results presented in this paper are based on data from 1993, the most recent year for which information on nonresident fathers is readily available. To what extent have changes since 1993 affected nonresident fathers' ability to provide health carecoverage? If nonresident fathers have experienced the same health care coverage trends as theoverall workforce, then the flattening out of several health care coverage trends since 1993 suggeststhat the findings are still relevant. (11) Although SIPP also collected information on health insurance coverage of custodial children in its 2001 topical module questionnaire, those data are not yet available. The national Census Bureau data, which reflect the universe of custodial families, show that in 1999 about 56% of mothers awarded child support payments had health insurance included intheir child support award. It also showed that only 49% (i.e., 49% of the 56%) of custodial mothersexpecting to receive health benefits for their children actually did so. In contrast, the CSE programdata, which reflect welfare families who are automatically eligible for CSE services and nonwelfarefamilies who have applied for CSE services, show that in FY2001 about 49% of child supportawards included a health insurance order. Further, only 18% of health insurance orders wereprovided as ordered (i.e., only 18% of custodial mothers expecting to receive health benefits for theirchildren actually did so). The CSE program data show a less effective medical support effort than the national Census Bureau data. This may be because noncustodial parents that are not part of the CSE program havemore income and are more able to provide medical support for their children. Even so, as notedearlier, the national data also indicate that much more needs to be accomplished with regard toestablishment and enforcement of medical support. Establishment of Health Insurance Order as Part of Child SupportAward/Order. As noted, the CSE program data indicate that in 2001, only 49% offamilies with child support awards had a health insurance order included as part of their childsupport award/order. An HHS IG report released in June 2000 found " child support agenciesdeficient in pursuing health insurance availability ..." The report noted that CSE staff indicated thatwhile they do try to obtain employment and health insurance information pertaining to noncustodialparents, they believe their primary efforts should be spent in obtaining cash child support payments. (12) Some observers contend that medical support provisions should be expanded to require bothnoncustodial and custodial parents to disclose information about actual and potential private healthcare coverage to help CSE agencies better and/or more quickly determine whether private healthinsurance coverage is available to the dependent children. Also, during the last several years therehas been a decline in the number of employers that provides health insurance for their employees(which is the foundation of the current medical child support system), and among employers whodo provide health insurance, the share of health insurance costs borne by employees has increased. Enforcement of Health Insurance Order. Of perhaps more significance is the fact that only 18% of CSE families with a health insurance orderincluded in their child support award actually received the health care coverage mandated by theorder (2001 data). Clearly, enforcement of the health insurance order can only come after the healthinsurance order has been established. However, higher enforcement levels are not necessarilycorrelated to higher levels of establishment of health insurance coverage. Some reasons for the low compliance with health insurance orders may be that the health care coverage is not (1) affordable -- health care costs have risen dramatically over the last decade andthose costs have in many instances been passed on to the beneficiary, so that noncustodial parentswho can no longer meet the premium fees, co-payments, deductibles, and other costs associated withthe coverage and may let the coverage lapse or terminate the coverage altogether; (2) accessible --the rise in the use of Health Maintenance Organizations to deliver health insurance coverage has ledto many cases in which the dependent child is not in the HMO service area and therefore not eligiblefor coverage; (3) stability -- not all workers are full-time, year-round employees, thus in the casesof temporary or seasonal workers, any access they had to health care coverage would generally endwhen their employment ended. To improve establishment and enforcement of medical child support, there are a range of healthcoverage options. Generally speaking for the last several years the focus has been on obtainingprivate health care coverage exclusively from noncustodial parents. The extent to which custodialparents work and have access to employer-sponsored health insurance has increased significantlyduring the last 20 years. Similarly, Medicaid coverage based on child poverty has also increased. Today, in many cases health care coverage is more accessible if it is based on the custodial parent'scoverage. (13) Moreover, over the last several yearshealth care costs have dramatically increased, andit can no longer be assumed that all employer-sponsored health insurance is affordable. Requiringand enforcing expensive health care insurance may negatively affect the custodial parent and childas well as the noncustodial parent. Most policymakers agree that health care coverage must beavailable, accessible, affordable, and stable. Observers state that if the goal is to reduce the numberof uninsured children with child support orders, in some cases, the only way to obtain this result willbe to rely on publicly-funded health care. As indicated by the data discussed earlier, federal law has not been fully effective in addressing medical child support. However, two provisions of federal law have yet to be fully implemented. P.L. 105-200 stipulated that a medical child support incentive payment system be developed -- thathas not yet happened. Further, although the National Medical Support Notice was promulgatedDecember 27, 2000 and became effective on March 27, 2001, as discussed below, only half of thestates are using it. The discussion below provides context and background to some of the issues that are preventing states from effectively establishing and enforcing medical child support. As mentioned elsewhere in this report, the 1984 law ( P.L. 98-378 ) basically requires CSE agencies to secure medical support information, and to secure and enforce medical supportobligations whenever health care coverage is available to the noncustodial parent at a reasonablecost. Recognizing that states were making slow progress in establishing and enforcing medicalsupport, Congress in the 1993 amendments ( P.L. 103-66 ) sought to remove some of the barriers toeffective medical support enforcement. The 1993 law prohibited discriminatory health care coveragepractices, created "qualified medical child support orders" to obtain coverage from group healthplans that were covered by the Employee Retirement Income Security Act (ERISA), and allowedemployers to deduct the costs of health insurance premiums from the employee/obligor's paycheck. Even with the enactment of the 1996 welfare reform law ( P.L. 104-193 ), which required inclusionof health care coverage in all child support orders established or enforced by CSE agencies, it isgenerally agreed that the establishment and enforcement of medical support has remainedinadequate. A 1998 law ( P.L. 105-200 ) required the development and use of a "National Medical Support Notice" and also established a Medical Child Support Working Group charged with makingrecommendations to overcome the barriers to effective enforcement of medical support. (14) TheWorking Group submitted a report to the Secretaries of the Departments of Health and HumanServices (HHS) and Labor in June 2000 containing 76 recommendations related to medical childsupport. These recommendations have not been considered by Congress. Although some critics claim that much more needs to be accomplished with regard to the provision of medical support for children receiving CSE services, some analysts contend that thefederal government has made tremendous strides. They note the following accomplishments. Thefederal government has moved from recoupment of Medicaid costs to pursuit of private medicalsupport. The federal government has moved from simply petitioning for medical support torequiring that medical support be included in all CSE orders. The federal government has movedfrom simply establishing medical support to requiring a uniform national medical support notice thatmust be honored by employer group health plans. They conclude that the 19-year period from 1984-2003encompasses much progress in both establishing medical support orders and in enforcing thoseorders. Some proponents advocate the collection of medical support through income withholding. They assert that child support and medical support should be fully integrated and enforced primarilythrough income withholding. They point out that income withholding as a percentage of all childsupport collections went from about 50% right before automatic income withholding was mandatedin 1994 to 65% of collections in FY2002. They contend that just as income withholding has beenso successful for cash child support, so too could medical support benefit from the mandatory useof income withholding. (15) Others warn that incomewithholding is too intrusive and does not accountfor changing financial circumstances. They also contend that the combination of both child supportand medical support may exceed the limits imposed by the Consumer Credit Protection Act. (16) According to federal regulations [45 CFR 303.31(b)(1)], if the custodial parent is already providing satisfactory private health care coverage for herself and the children, state CSE agenciesare not required to petition the court or administrative agency to include private health insurancecoverage that is available to the noncustodial parent at reasonable cost in new or modified childsupport orders. This means that if the custodial parent is bearing the full cost of premiums, co-payments anddeductibles -- without assistance from the noncustodial parent -- the CSE agency willtake no action. In such cases, cash child support may be used to pay health care costs. In somecases, a child may have private health care coverage but live in poor housing or lack adequate foodor clothing. (17) Some observers argue that healthinsurance should be an adjunct to, not a substitutefor, the noncustodial parent's obligation to provide financial support for his or her child; they notethat when insurance costs are subtracted from the noncustodial parent's financial obligation, thecustodial parent has less resources to spend in the best interest of the child. (18) Others argue that whenmedical child support is not provided, the custodial parents may not be able to oversee the medicalhealth of their children. According to the Medical Child Support Working Group, it often is assumed that only the noncustodial parent has access to private health insurance. It cites a number of statistics that affirmsthis is a fallacy. It recommends that a new paradigm should be adopted in which coverage availableto both parents is examined in determining the medical support obligation. Under this paradigm, ifonly the custodial parent has coverage, that coverage should be ordered and the noncustodial parentshould contribute toward the cost of such coverage. When both parents are potentially able toprovide coverage, the coverage available through the custodial parent (with a contribution towardthe cost by the noncustodial parent) should normally be preferred because it -- (1) most likely isaccessible to the child, (2) involves less difficulty in claims processing for the custodial parent, theprovider, and the insurer, and (3) minimizes the enforcement difficulties of the CSE agency orprivate attorney responsible for the case. (19) Some analysts caution that this policy may cause conflict if the state has to enforce a medical support order against the custodial parent, especially if the custodial parent contends that the reasonthe medical obligation was unmet was because the noncustodial parent failed to make his or hercontribution. Such conflict may occur because there is much confusion over whom the CSE attorneyrepresents. Most custodial parents believe that the CSE agency represents them when in fact theCSE agency represents the state. In general, private health care coverage that is available to the custodial parent usually is accessible to the child even if the plan coverage has a limited service area, as is the case with manyHealth Maintenance Organizations (HMOs). However, this may not be the case when it is the noncustodial parent whose health insurance coverage is being used, particularly if that coverage isprovided through an HMO. (20) Thus, for childrenliving far from their noncustodial parent, managedcare reduces the attractiveness of coverage under the noncustodial parent's plan relative to otheroptions for health care coverage. For example, HMO coverage in California may be useless to achild living in Massachusetts. Likewise, coverage available in upstate New York may be too faraway to be useful to a child living in New York City. According to one report, since managed careis now the norm and only 40% of noncustodial fathers live in the same city or county as theirchildren, this can be a serious problem. (21) Under the Medical Child Support Working Group's paradigm, when private health care coverage is available to a child, the CSE agency should consider the accessibility of covered servicesbefore it decides to pursue the coverage. According to the Working Group, children should not beenrolled in any plan whose services/providers are not accessible to them, unless the plan can providefinancial reimbursement for services rendered by alternate providers. (22) The Working Group recommended that federal regulations be developed to define "accessible" coverage and that it be made clear that coverage that is not accessible should not be ordered. TheWorking Group reported the following with regard to a definition of "accessible": Coverage is accessible if the covered children can obtain services from a plan provider with reasonable effort by the custodial parent. When the only healthcare option available to the noncustodial parent is a plan that limits service coverage to providerswithin a defined geographic area, the decision maker should determine whether the child lives withinthe plan's service area. If the child does not live within the plan's service area, the decision makershould determine whether the plan has a reciprocal agreement that permits the child to receivecoverage at no greater cost than if the child resided in the plan's service area. The decision makershould also determine if primary care is available within the lesser of 30 minutes or 30 miles of thechild's residence. If primary care is not available within these constraints, the coverage should bedeemed inaccessible. (23) In addition, the Medical Child Support Working Group cautioned that to be deemed accessible, the health care coverage also should be stable. The Working Group maintained that the decisionmaker should base accessibility partly on whether it can reasonably be expected that the health carecoverage will remain effective for at least one year, based on the employment history of the parentwho is to provide the coverage. In other words, it is the Working Group's opinion that it might notalways be feasible to pursue health insurance coverage in the case of parents who are seasonalworkers. Some observers contend that if noncustodial parents cannot provide continuous health carecoverage for their dependent children, it may be in the best interest of the child to receive privatehealth care coverage from the custodial parent or coverage from Medicaid or the State Children'sHealth Insurance Program (SCHIP) Under SCHIP, which was established in 1997, low-incomechildren may be better off without any coverage from the noncustodial parent, if that parent is unableto provide continuous coverage because some states do not grant SCHIP eligibility until childrenhave been uninsured for a waiting period of three or more months. (24) As noted earlier, the federal government provides 66% of the funding for most CSE program activities, including those related to medical support. In order to receive any federal funding, statesand/or local governments must provide 34% of the funds needed to operate their CSE programs. Inthe past, when Congress wanted to encourage activity in an area it considered vital to theeffectiveness of the CSE program, it offered federal financial participation (FFP) at a higher thannormal level. For example, Congress provided enhanced FFP to encourage paternity establishment and automation in the CSE program. (25) The Medical Child Support Working Group contends that Congress should provide enhanced FFP at a 90% rate for medical child support activities to encourage states to more aggressivelypursue medical support enforcement. The Working Group's recommendation limits the 90%matching requirement for medical support to 5 years. P.L. 105-200 (enacted in 1998) also required the HHS Secretary, in consultation with state CSE directors and representatives of children potentially eligible for medical support, to develop a newmedical support incentive measure based on the state's effectiveness in establishing and enforcingmedical child support obligations. The medical support incentive was to be part of the new revenue-neutralperformance-based child support incentive system, established for the overall program in1998. The 1998 law required that a report on this new incentive measure be submitted to Congressnot later than October 1, 1999. According to the House report on the legislation: Several witnesses who appeared before the Committee recommended that we consider including medical child support as a performance measure. Afterdiscussion, the Committee decided not to include this measure because of the lack of informationabout the reliability of state data on medical support as well as lack of historical information aboutstate performance on the measure that could be used to estimate payments. However, becausemedical support is of central importance to a good child support system, the Committee decided toask the Secretary to study the feasibility of using medical support as a performance measure and toreport her findings to Congress. (26) Pursuant to this mandate, the HHS Secretary formed the Medical Support Incentive Work Group (MSIWG). (27) The work group met twiceover a period of nine months to makerecommendations to the Secretary. The work group recommended that the development of themedical support incentive be delayed until 2001 so that it could obtain the necessary data anddevelop an appropriate measure. This recommendation was included in the Secretary's report toCongress. A reconstituted MSIWG was later convened and -- in September 2001 -- recommended that the HHS Secretary not develop a medical support performance measure for incorporation into theexisting CSE incentive payment system. Again noting the lack of data, the second MSIWGrecommended that a measure be developed, but not for incentive payment purposes. To date, theHHS Secretary has not acted on this report. Hence, a recommendation to Congress has not beenmade and there remains no incentive payment for medical support activities. CSE agencies are required to pursue private family health coverage whenever it is available at reasonable cost. Federal regulations state that "health insurance is considered reasonable in cost ifit is employment-related or other group health insurance." The definition deemingemployment-related coverage or group (e.g., union) health insurance policies to be per se reasonablein cost was first promulgated in 1985. It was justified by a 1983 study by the National Center forHealth Services Research, which found that employers paid 72% of the premium cost for low-wageemployees. The federal Office of Child Support Enforcement (OCSE) thus concluded that mostemployment-related or other group health insurance is inexpensive to the employee/noncustodialparent. Rising health care costs have changed the picture. Recent research indicates that therequired employee contribution for health care coverage represents a much larger share of familyincome for low-income workers. Some data suggest that on average, employee contributions tofamily health care coverage premiums are equal to 45% to 52% of the typical cash child supportpayment. (28) Although federal regulations (45 CFR section 302.56) require that child support guidelines "provide for the child(ren)'s health care needs, through health insurance coverage or some othermeans," they do not stipulate how this is to be done. In practice, integrating child support andmedical support can be difficult. Most states operate under the position that if the custodial parentprovides the health care coverage, the cash support award is suppose to increase, to reflect somecontribution from the noncustodial parent toward the cost. If the noncustodial parent provides thecoverage, the cash support award is suppose to decrease, to reflect the fact that the noncustodialparent is subsidizing the cost of health care coverage through a separate deduction from wagestoward the premium. The results may be problematic in that if the premium associated with thehealth care coverage is too high, cash support will be substantially reduced, leaving the custodialparent without enough money to take care of the child's food, clothing, and shelter needs. If cashsupport is not adjusted downward, however, poorer noncustodial parents will pay an unreasonablyhigh portion of their income as support. (29) Under the Medical Child Support Working Group's paradigm, 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 or the State Children's HealthInsurance Program (SCHIP) should be the payment of last resort. Moreover, according to theWorking Group, private insurance should not be ordered when its cost significantly lowers theamount of cash child support available to meet the child's basic needs and the child is eligible forsome other form of coverage. (30) According to a Policy Interpretation Questions memorandum, (31) issued by the Office of ChildSupport Enforcement, concerning "reasonable cost" of medical support, states in which the childsupport order is established by the courts can enact statutes governing their courts that define"reasonable cost" in a way that the state deems appropriate and still meet federal requirements. Forexample, under the Texas statute (Section 154.181(e) of the Texas Family Code) "reasonable cost"means the cost of a health insurance premium that does not exceed 10% of the responsible parent'smonthly net income. In contrast, states that set the child support order administratively through their CSE agencies would be subject to federal law and regulations, which stipulate that health insurance is consideredreasonable in cost if it is employment-related or other group health insurance. The Working Group recommended that federal policy be changed to reflect the view that if the cost of providing private health insurance coverage does not exceed 5% of the gross income of theparent who provides coverage, then the cost should be deemed reasonable, regardless of whether thechild support order was established by the courts or administratively by the state CSE agency. (32) Even though private health care coverage has advantages over public coverage -- namely greater likelihood of full family coverage, a wider range of providers, no stigma, less taxpayerburden, and greater satisfaction with various aspects of care (33) -- for the 8.5 million children who didnot have any health insurance coverage in 2002, public health care coverage may need to be pursuedif private health care coverage is not available or not accessible. There is general agreement that theCSE agency should work more closely with Medicaid/SCHIP to ensure that children who haveaccess to private health care coverage obtain such coverage, and that those who are eligible forpublicly-subsidized health coverage are covered by Medicaid or SCHIP. Alternate Methods to Offset Health Insurance or Medicaid Costs. Although focused solely on the state of Connecticut, a 1998 report by theHHS Office of Inspector General (OIG) found many noncustodial parents who were required bycourt order to provide health care coverage to their children were unable to meet their obligationbecause either their employers did not offer health insurance or available health insurance was notreasonable in cost. One of the report's recommendations was for Connecticut to requirenoncustodial parents to pay all or part of the Medicaid premiums for their dependent children. Thereport estimated that Connecticut would save about $11.4 million annually in combined federal andstate Medicaid costs if it required noncustodial parents to offset Medicaid premiums paid by the stateon behalf of the children of these noncustodial parents. (34) Similarly, a 2003 HHS OIG report focused on North Carolina found that about $17.4 million could have been collected from the noncustodial parents of 30,987 children to partially offset theMedicaid cost incurred by the state and federal governments to provide health care to thesechildren. (35) Although federal law does not requirenoncustodial parents to provide medical supportif the employer does not offer health insurance or the insurance is too costly, states have the authorityto modify state laws to require noncustodial parents to contribute to their dependent children'sMedicaid costs. In cases where a parent has access to private health care coverage but it is too costly, the child may then be enrolled in Medicaid, if eligible. In such cases, it may be less expensive for the stateif the child were enrolled in the private health care coverage. For example, the noncustodial parent'sshare of the private health insurance premium might be less than what the state pays an HMO for thechild's Medicaid coverage. In that case, many experts believe that it would make sense for Medicaidto pay the private health coverage premium. (36) Federal law allows individuals to obtain private healthcare coverage with a public subsidy. Specifically, section 1906 of the Social Security Act allowsstate Medicaid agencies to use Medicaid funds to purchase group health insurance coverage if suchcoverage is available to a Medicaid-eligible individual. Closing the Gap Between Those Eligible for Medicaid and ThoseEnrolled. In many cases, children are uninsured because private health insurancecoverage is not available through either parent, and the custodial parent has not enrolled the childin the available public health care system, i.e., Medicaid or SCHIP. One study estimates thatenrolling uninsured, child support-eligible children in Medicaid or SCHIP could reduce the shareof these children who are uninsured from 15% to 3%. According to some analysts, requiring thatthe child be enrolled in Medicaid or SCHIP (if eligible) when private coverage is not availableshould be a standard part of the child support process. Also, as mentioned above, considerationcould also be given to having the noncustodial parent contribute to any premiums, co-payments, ordeductibles associated with SCHIP coverage if the state in which the child is to be enrolled has aseparate SCHIP program that imposes these costs. These types of procedures might spread the costmore equitably between the parents, and between parents and the state. (37) If the state does not want to require enrollment in publicly-funded medical programs, it could provide information on the availability of the programs. It has been estimated that 66% of uninsuredchild support-eligible children are eligible for Medicaid, and another 15% are eligible for SCHIP. One of the main reasons for this lack of healthcare coverage of children who are eligible for public health care programs is that many parents donot know about Medicaid and SCHIP or do not know how to enroll their children. About one-thirdof the parents of eligible but not-enrolled children reported that they had not heard of Medicaid orSCHIP. Another 10% had difficulty with the enrollment process. An option would be for the CSEagency to provide parents with information about these programs and assist them in the enrollmentprocess. (38) The ability to move back and forth between the noncustodial parent's health insurance plan and an alternative source of coverage is an important factor in determining the best source of coveragefor a child whose noncustodial parent has access to employment-based health care coverage on anirregular or seasonal basis. According to one author: Transitions to and from Medicaid can be quite seamless, since children can remain enrolled in Medicaid even when they are also covered by the nonresidentparent's health care plan (in which case, the nonresident parent's health care plan takes precedence). However, if the alternative source of coverage is SCHIP, then the transition may not be seamless,since some states require a child to be uninsured for three or more months before gaining eligibility. Unless some exemption can be made for children losing coverage from a nonresident parent,SCHIP-eligible children whose nonresident parent can provide only irregular access toemployment-based health care coverage may be better off if some other form of medical support isrequired, such as a contribution to the health plan premiums paid by the custodial family, orcontributions toward co-payments and deductibles. (39) P.L.105-200 provided for a uniform manner for states to inform employers about their need to enroll the children of noncustodial parents in employer-sponsored health plans. It required the CSEagency to use a standardized "National Medical Support Notice" (developed by HHS and theDepartment of Labor) to communicate to employers the issuance of a medical support order. Employers are required to accept the form as a "Qualified Medical Child Support Order" (QMCSO)under ERISA. (40) An appropriately completednational medical support notice is considered to be aQMCSO and as such must be honored by the employer's group health plan. P.L. 105-200 also requires plans sponsored by churches and state and local governments to provide benefits in accordance with the requirements of an appropriately completed NMSN. Thelegislation envisioned that all states would be using the NMSN by October 1, 2001 or, at the latest,by the end of first legislative session to occur after that date, if state legislation was needed. It alsorequired employers to honor any appropriately completed NMSN and send it to the appropriate planadministrator within 20 business days. The plan administrator has 40 days from the date on theNMSN to respond to the CSE agency. Finally, employers were required to notify the state CSEagency if the employee was terminated thereby alerting the CSE agency of the need to enforcemedical support against any new employer by issuing another NMSN. A draft NMSN was issued for public comment on November 15, 1999. Changes were made in response to comments from the Medical Child Support Working Group, as well as the public. TheDepartment of Labor and the Department of Health and Human Services adopted final regulationson December 27, 2000, implementing the National Medical Support Notice provisions of the ChildSupport Performance and Incentive Act of 1998 ( P.L. 105-200 ). On January 26, 2001, the FederalRegister published a notice that delayed the effective date of the final NMSN regulations until March27, 2001. Although Congress required all state CSE agencies to use the NMSN once it was promulgated, few states had implemented it by the target date of October 2001. According to OCSE, 37 states andterritories had to delay implementation of the NMSN because their legislatures needed to pass therequired legislation. According to National Women's Law Center, as of September 2002, about 30states had passed NMSN implementation legislation. (41) According to the Center on Law and SocialPolicy, as of April 4, 2003, about half the states were not yet using the NMSN. (42) Federal law mandates that states have procedures under which all child support orders are required to include a provision for the health care coverage of the child (section 466(a)(19) of theSocial Security Act). Federal law does not, however, stipulate state use of the NMSN in the CSEstate plan requirements on provision of health care coverage. (43) Thus, a state that does not use theNMSN is not considered to be in noncompliance with the state CSE plan, and thereby is not subjectto a financial penalty. Some observers contend that imposing financial sanctions on states that donot use the NMSN could increase its use and thereby increase enforcement of medical child support. Some states contend that the NMSN is much too long and cite the expense of mailing such a lengthydocument to a large number of employers. Further, others note that federal law does not require thatstates impose financial penalties on employers who fail to comply with the NMSN (states, however,can impose such sanctions under state law). According to the National Women's Law Center, somestates without relevant employer and plan administrator sanctions are concerned that the lack ofsanctions may be an barrier to successful enforcement of medical child support. (44) Just as Temporary Assistance for Needy Families (TANF) recipients must assign their childsupport rights to the state, so too must Medicaid recipients assign their medical support rights to thestate. The impetus for the federal government moving into the arena of financial child support wasto reduce federal expenditures on the old Aid to Families with Dependent Children (AFDC)entitlement program (which was replaced in 1996 by the time-limited TANF block grant program). Similarly, the impetus for the federal government moving into the arena of medical support forchildren (eligible for child support) was to reduce federal costs of the Medicaid program. Thissection of the report summarizes major medical child support provisions. The first link between child support and medical support came as an attempt to recoup the costs of Medicaid provided to public assistance families under Title XIX of the Social Security Act. Justtwo years after the creation of the CSE (i.e., IV-D of the Social Security Act) program, theMedicare/Medicaid Anti-fraud and Abuse Amendments of 1977 established a medical supportenforcement program that allowed states to require that Medicaid applicants assign their rights tomedical support to the state. Further, in an effort to cover children with private insurance instead ofpublic programs, when available, it permitted CSE and Medicaid agencies to enter into cooperativeagreements to pursue medical child support assigned to the state. (It should be noted that activitiesperformed by the CSE agency under a cooperative agreement with the Medicaid agency must befunded by the Medicaid agency.) The 1977 law also required state CSE agencies to notify Medicaidagencies when private family health coverage was either obtained or discontinued for aMedicaid-eligible person. P.L. 98-369 mandated states to require that Medicaid applicants assign their rights to medical support to the state (Section 1912(a) of the Social Security Act). Section 16 of Public Law 98-378, enacted in 1984, required the HHS Secretary to issue regulations to require that state CSE agencies petition for the inclusion of medical support as partof any new or modified child support order whenever health care coverage is available at "reasonablecost" to the noncustodial parent of a child receiving AFDC, Medicaid, or foster care benefits orservices. According to federal regulations, any employment-related or other group coverage wasconsidered reasonable, under the assumption that health insurance is inexpensive to theemployee/noncustodial parent. Implementing Regulations. On October 16, 1985, the Office of Child Support Enforcement (OCSE) published regulations amending previousregulations and implementing section 16 of P. L. 98-378. The regulations required state CSEagencies to obtain basic medical support information and provide this information to the stateMedicaid agency. The purpose of medical support enforcement is to expand the number of childrenfor whom private health insurance coverage is obtained by increasing the availability of third partyresources to pay for medical care, and thereby reduce Medicaid costs for both the states and thefederal government. If the custodial parent does not have satisfactory health insurance coverage, thechild support agency must petition the court or administrative authority to include medical supportin new or modified support orders and inform the state Medicaid agency of any new or modifiedsupport orders that include a medical support obligation. The regulations also required CSE agenciesto enforce medical support that has been ordered by a court or administrative process. States receivechild support matching funds at the 66% rate for required medical support activities. Before these 1985 regulations were issued, medical support activities were pursued by CSE agencies only under optional cooperative agreements with Medicaid agencies. Some of the functionsthat the CSE agency may perform under a cooperative agreement with the Medicaid agency include:receiving referrals from the Medicaid agency, locating noncustodial parents, establishing paternity,determining whether the noncustodial parent has a health insurance policy or plan that covers thechild, obtaining sufficient information about the health insurance policy or plan to permit the filingof a claim with the insurer, filing a claim with the insurer or transmitting the necessary informationto the Medicaid agency, securing health insurance coverage through court or administrative order,and recovering amounts necessary to reimburse medical assistance payments. More Regulations. On September 16, 1988, OCSE issued regulations expanding the medical support enforcement provisions. These regulationsrequired the CSE agency to develop criteria to identify existing child support cases that have a highpotential for obtaining medical support, and to petition the court or administrative authority tomodify support orders to include medical support for these cases even if no other modification isanticipated. The CSE agency also is required to provide the custodial parent with informationregarding the health insurance coverage obtained by the noncustodial parent for the child. Moreover,the regulation deleted the condition that CSE agencies may secure health insurance coverage undera cooperative agreement only when it will not reduce the noncustodial parent's ability to pay childsupport. Before late 1993, employees covered under their employers' health care plans generally could provide coverage to children only if the children lived with the employee. However, as a result ofdivorce proceedings, employees often lost custody of their children but were nonetheless requiredto provide their health care coverage. While the employee would be obliged to follow the court'sdirective, the employer that sponsored the employee's health care plan was under no similarobligation. Even if the court ordered the employer to continue health care coverage for thenonresident child of their employee, the employer would be under no legal obligation to do so. Aware of this situation, Congress took the following legislative action in the Omnibus Budget Reconciliation Act of 1993 ( P.L. 103-66 ): (1) Insurers were prohibited from denying enrollment of a child under the health insurance coverage of the child's parent on the grounds that the child was born out of wedlock, is notclaimed as a dependent on the parent's federal income tax return, or does not reside with theparent or in the insurer's service area; (2) Insurers and employers were required, in any case in which a parent is required by court order to provide health coverage for a child and the child is otherwise eligible for family healthcoverage through the insurer: (a) to permit the parent, without regard to any enrollment seasonrestrictions, to enroll the child under such family coverage; (b) if the parent fails to providehealth insurance coverage for a child, to enroll the child upon application by the child's otherparent or the state child support or Medicaid agency; and (c) with respect to employers, not todisenroll the child unless there is satisfactory written evidence that the order is no longer ineffect or the child is or will be enrolled in comparable health coverage through another insurerthat will take effect not later than the effective date of the disenrollment; (3) Employers doing business in the state, if they offer health insurance and if a court order is in effect, were required to withhold from the employee's compensation the employee's shareof premiums for health insurance and to pay that share to the insurer. The HHS Secretary mayprovide by regulation for such exceptions to this requirement (and other requirements describedabove that apply to employers) as the Secretary determines necessary to ensure compliance withan order, or with the limits on withholding that are specified in section 303(b) of the ConsumerCredit Protection Act; (4) Insurers were prohibited from imposing requirements on a state agency acting as an agent or assignee of an individual eligible for medical assistance that are different from requirementsapplicable to an agent or assignee of any other individual; (5) Insurers were required, in the case of a child who has coverage through the insurer of a noncustodial parent to: (a) provide the custodial parent with the information necessary for thechild to obtain benefits; (b) permit the custodial parent (or provider, with the custodial parent'sapproval) to submit claims for covered services without the approval of the noncustodial parent;and (c) make payment on claims directly to the custodial parent, the provider, or the stateagency; and (6) The state Medicaid agency was permitted to garnish the wages, salary, or other employment income of, and to withhold state tax refunds to, any person who: (a) is required by court oradministrative order to provide health insurance coverage to an individual eligible forMedicaid; (b) has received payment from a third party for the costs of medical services to thatindividual; and (c) has not reimbursed either the individual or the provider. The amount subjectto garnishment or withholding is the amount required to reimburse the state agency forexpenditures for costs of medical services provided under the Medicaid program. Claims forcurrent or past due child support take priority over any claims for the costs of medical services. Under the 1996 welfare reform legislation, the definition of "medical child support order" in the Employee Retirement Income Security Act (ERISA) was expanded to clarify that any judgment,decree, or order that is issued by a court or by an administrative process has the force and effect oflaw. In addition, the 1996 welfare reform law stipulated that all orders enforced by the state CSEagency must include a provision for health care coverage. If the noncustodial parent changes jobsand the new employer provides health coverage, the state must send notice of coverage to the newemployer; the notice must serve to enroll the child in the health plan of the new employer. (Beforeenactment of P.L. 104-193 , families who were not receiving public assistance benefits could choosenot to seek medical support.) P.L.105-200 provided for a uniform manner for states to inform employers about their need to enroll the children of noncustodial parents in employer-sponsored health plans. It required the CSEagency to use a standardized "National Medical Support Notice" (developed by HHS and theDepartment of Labor) to communicate to employers the issuance of a medical support order. Employers are required to accept the form as a "Qualified Medical Support Order" under ERISA. States were required to begin using the national medical support notice in October 2001, althoughmany states had to delay implementation until enactment of required state enabling legislation. Anappropriately completed national medical support notice is considered to be a "Qualified MedicalChild Support Order" and as such must be honored by the employer's group health plan. P.L. 105-200 also called for the joint establishment of a Medical Support Working Group by the Secretaries of HHS and Labor to identify impediments to the effective enforcement of medicalsupport by state CSE agencies and to submit to the Secretaries of HHS and Labor a report containingrecommendations addressing the identified impediments. In addition, the HHS Secretary, in consultation with state CSE directors and representatives of children potentially eligible for medical support, was directed to develop a performance measurebased on the effectiveness of states in establishing and enforcing medical support obligations andto make recommendations for the incorporation of the measure in a revenue neutral manner into theChild Support Incentive Payment System, no later than October 1, 1999. Table B.1. Provision for Health Care Costs in the Child SupportAward or Agreement, 1993 Source: Laura Wheaton, The Urban Institute, Nonresident Fathers: To What Extent Do They HaveAccess to Employment-Based Health Care Coverage? , June 2000, p. 6 of web version http://fatherhood.hhs.gov/ncp-health00/report.htm . Table B.2. Health Care Coverage of Children in Custodial Families in 1993 Source: Laura Wheaton, The Urban Institute, Nonresident Fathers: To What Extent Do They HaveAccess to Employment-Based Health Care Coverage? , June 2000, p. 7 and 8 of web version http://fatherhood.hhs.gov/ncp-health00/report.htm . * If at least one custodial child receives health care coverage from a given source in at lest one month of the year, then the family is considered to have received health care coverage from that source. The family is placed into the first of the categories that applies to it.

Summary: Medical child support is the legal provision of payment of medical, dental, prescription, and other health care expenses of dependent children. It can include provisions to cover health insurancecosts as well as cash payments for unreimbursed medical expenses. According to 2001 ChildSupport Enforcement (CSE) data, 93% of medical child support is provided in the form of healthinsurance coverage. The requirement for medical child support is apart of all child support orders(administered by CSE agencies), and it only pertains to the parent's dependent children. Activitiesundertaken by CSE agencies to establish and enforce medical child support are eligible for federalreimbursement at the CSE matching rate of 66%. The medical child support process requires that a state CSE agency notify the employer of a noncustodial parent who owes child support, that the parent is obligated to provide health carecoverage for his or her dependent children. CSE agencies notify employers of a medical childsupport order via a standardized federal form called the National Medical Support Notice. The planadministrator must then determine whether family health care coverage is available for which thedependent children may be eligible. If eligible, the plan administrator is required to enroll thedependent child in an appropriate plan, and notify the noncustodial parent's employer of thepremium amount to be withheld from the employee's paycheck. Although establishment of a medical support order is a prerequisite to enforcing the order, inclusion of a health insurance order does not necessarily mean that health insurance coverage isactually provided. According to CSE program data, in 2001, only 49% of child support ordersincluded health insurance coverage, and the health insurance order was complied with in only 18%of the cases. Most policymakers agree that health care coverage for dependent children must beavailable, accessible, affordable, and stable. Since 1977 and sporadically through 1998, Congresshas passed legislation to help states effectively establish and enforce medical child support. TheNational Medical Support Notice, mandated by 1998 law and promulgated in March 2001, wasviewed as a means to significantly improve enforcement of medical child support -- to date onlyabout half the states are using the Notice. The 1998 law also called for an advisory body to designa medical child support incentive which would become part of the CSE performance-based incentivepayment system -- a recommendation was made to Congress in 2001 to indefinitely delaydevelopment of a medical child support incentive mainly because it was argued that the appropriatedata was not yet available upon which to base such an incentive. Improving the establishment and enforcement of medical child support has been hampered to some extent by factors such as high health care costs, a decline in employer-provided healthinsurance coverage, an increase in the share of health insurance costs borne by employees, and thelarge number of uninsured children. This report provides a legislative history of medical supportprovisions in the CSE program, describes current policy with respect to medical child support,examines available data, and discusses some of the issues related to medical child support. Thisreport will not be updated.