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New Law Provides Uniform Standards for Assessing Medical Child Support and Protections for Low-Income Parents

August 13, 2009

Author: Susan C. Antos

On July 15, Governor Paterson signed a bill, sponsored by Judiciary Chairs, Assemblymember Helene Weinstein and Senator John Sampson, into law that will make significant changes to sections 413 of the Family Court Act and 240 of the Domestic Relations Law. Chapter 215 of the Laws of 2009. The law, which will be effective 90 days after signature, will create uniform standards for the collection of medical support, including the collection of confinement costs (birthing expenses). The federal Deficit Reduction Act of 2005 (DRA) and its implementing regulations mandate some of these changes. 42 U.S.C. §§652(f) and 666(a)(19); 29 U.S.C. §1169; 45 CFR 303.31 and comments at 73 Fed. Reg. 42416, et. seq.

For years, §416(c) of the Family Court Act (FCA)and Domestic Relations Law (DRL)§240(1)(a) have required that health insurance be provided in child support orders if “available,” and  FCA § 416(d)  and DRL § 240(1)(b)(2) have provided  that health insurance can not be considered available when health insurance was not affordable or accessible. However, the statutes gave no guidance as to how courts were to determine affordability or accessibility. The DRA regulations require that states implement such guidelines and the federal regulations provide default guidelines for states that fail to do so.

The new law will improve access to health care for low-income families by providing specific guidelines for cost and accessibility when courts make determinations as to whether health insurance is available. In the event that the Court determines that health insurance is not available and health coverage is obtained through Child Health Plus or Medicaid, the law sets forth reasonable guidelines for parental reimbursement to the Department of Health for the cost of these programs. The bill also creates for first time ever, long overdue standards for the establishment of liability for confinement costs. 

The bill repeals FCA § 413(1)(c)(5) and DRL § 240(1-b)(c)(5), and replaces the sub-paragraphs with new provisions which require the proration of  health care expenses between both parents. The bill defines “cash medical support;” and sets forth different rules for imposing a medical support requirement depending upon whether private health insurance is available or whether the child receives health coverage through Medicaid or Child Health Plus.

Guidelines for Health Insurance Availability

A judicial determination as to whether health insurance is available is critically important for low income children because when a court makes a determination that private health insurance is effectively not available to a child because of its cost or geographic limitations, the child will likely be eligible for Medicaid or Child Health Plus. This bill creates guidelines for making a determination as to whether health insurance is available, by defining “reasonable in cost” and “reasonably accessible.”

Cost is defined as the cost of extending health insurance benefits to the child or children where the parent has coverage or the difference between self-only benefits and extending health insurance benefits to the child or children when there is no existing coverage. The bill adds a new subdivision (d) to 416 of the Family Court Act and a new paragraph 3 to DRL 240(1)(b) to define health insurance as reasonable in cost if the cost of health insurance premium and deductible does not exceed five percent of the combined parental income. In an important protection for low-income families, the bill further provides that in no instance shall health insurance be considered reasonable in cost if a parent’s share of the cost would reduce the income of that parent below the self-support reserve. The self-support reserve is 135% of the poverty level for a household of one, adjusted annually on April 1. FCA 413(b)(6) and DRL 240(1-b)(6). Currently the self-support reserve is $14,620.          

The bill also describes health insurance benefits as presumptively “reasonably accessible” when the child lives within the geographic area covered by the plan or within 30 minutes or miles of from the child’s residence to the services covered. This  presumption may be rebutted for good cause shown. 

Guidelines for Allocating the Cost of Health Insurance

Where health insurance is available, the cost of providing health insurance is pro-rated between the parties. If the custodial parent is ordered to provide such benefits, the non- custodial parent’s pro-rata share is added to the basic support obligation; if the non-custodial parent is ordered to provide such benefits, the custodial parent’s pro-rata share is deducted from the basic support obligation.

Where Health Insurance is Not Available

Where the Court has made a determination that health insurance is not available, the new law applies different rules depending upon whether the child is eligible for Medicaid Managed care, Medicaid fee for service or Child Health Plus, as laid out below. In all cases, the court must separately state the non-custodial parent’s monthly obligation which cannot exceed five percent of his or her gross income or the difference between the non-custodial parent’s income and the self-support reserve, whichever is less.

  • Where the child is eligible for Medicaid managed care, the parents are required to pay the lesser of the amount that would be the family contribution under Child Health Plus if the children were in a two parent household with income equal to the combined income of the parents, or the premium paid by the medical assistance program on behalf of the child or children to the managed care plan. The Child Health Plus (CHP) family contribution charts are posted on the Empire Justice Center website in the child support section at:  http://www.empirejustice.org/issue-areas/child-support/.  The State’s cost to enroll a child in Medicaid managed care is $115 per month per child. Although it is not likely that the CHP   contribution will exceed $115, the parental  contribution should be capped at this amount.  1
  • Where the child is eligible for fee for service coverage under the Medicaid program, the Court shall determine the non-custodial parent’s maximum annual cash medical support obligation,which shall be equal to the monthly amount that would be required as a family contribution under Child Health Plus if the children were in a two parent household with income equal to the combined income of the parents times twelve or the number of months that the child or children are authorized for fee for service coverage during any year.
  • Where Medicaid expenses were incurred prior to the Court’s order, the Court shall calculate liability as described in the two preceding  paragraphs, provided that the amount that the non-custodial parent is ordered to pay shall not exceed five percent of his or her gross income or the difference between the non-custodial parent’s income and the self-support reserve, whichever is less for the year in which the expense was incurred. Such amounts shall be considered to be arrears/past due support. This bullet describes the new method for determining liability for confinement costs which are paid by the Medicaid program as more fully set forth in the Confinement Costs section, below.
  • Where the child is eligible for Child Health Plus, the court shall prorate each parent’s share of the cost of the required family contribution in the same proportion as each parent’s income is to the combined parental income.

In addition the court shall prorate each parent’s share of reasonable health care expenses not reimbursed or paid by insurance, Medicaid or Child Health Plus in the same proportion as each parent’s income is to the combined parental income, and state the non-custodial parent’s percentage in the order. The non-custodial parent’s share determined to be due and owing shall be considered support arrears/past due support.

The court retains the power to deviate from the forgoing guidelines, provided that the court set forth in the order the factors it considered.

Although this is not explicitly set forth in the bill, where the cash support order or the cash medical support order bring the individual’s income to the self-support reserve, no additional amount should be added for unreimbursed medical expenses since this bill defines both cash medical support and unreimbursed health care expenses as part of the “basic support obligation,” triggering the self-support reserve protections in FCA 413(d) and DRL 240(1-b)(d)).  

One area where the bill fails to give guidance is the treatment of non-custodial parents with second families. With respect to individuals supporting  second families, the utilization of the self-support reserve as an income floor may be so low that it compromises their ability to support the children currently in their care.  This is of particular concern in the area of unreimbursed medical expenses and Medicaid expenses incurred prior to entry of the order of support which are immediately and automatically treated as past due support subject to the provisions for arrears collection such as the “add-on” and seizure of bank accounts. Particularly where these “instant arrears” are Medicaid expenses owed to the State Department of Health and not to the custodial parent, it would make sense to give a higher level of protection than the self-support reserve to those respondents who are supporting second families.

Confinement Costs

From the perspective of those representing pregnant women who are reluctant to access publicly funded prenatal care for fear that the father of their child may be sued to recover all costs expended for such care and the child’s delivery, this bill makes significant and important changes to sections 514 and 545(1) of the Family Court Act. 

The bill amends section 514 of the Family Court Act to define confinement costs as “cash medical support,” and requires that liability for confinement costs be set in accordance with the new medical support guidelines. This means that where confinement costs are paid for by Medicaid, liability for confinement costs and any other medical support obligations incurred by the father on behalf of that child, should not exceed five percent of the non-custodial parent’s gross income or the difference between the non-custodial parent’s income and the self-support reserve, whichever is less, for the year when the expense was incurred. Until this change, the standards for recovery of confinement expenses varied dramatically from county to county, with some counties not pursuing such expenses at all to others that imposed liability for the entire expense regardless of the non-custodial parent’s  income. 

Priority of Distribution: Child Support and Medical Support

The new law amends CPLR5241(h) to  make clear that where any income deduction is imposed, current support (support that is collected in the month that it is due) shall be given priority over any deductions for health insurance premiums. The bill also states that deductions for health insurance premiums have priority over all other deduction authorized by CPLR 5241(g).  OTDA has indicated that in terms of priority of arrears distribution arrears owed to the family will always be paid first. 2 

1 OTDA Training Materials, "Establishing and Enforcing Medical Support Orders," distributed at the New York State Public Welfare Association 2009 Summer Conference on July 21, 2009 (on file at the Empire Justice Center).
2 Brian Wootan, Esq., Office of Temporary and Disability Assistance, July 21, 2009, in answer to a question posed at the New York State Public Welfare Association 2009 Summer Conference on July 21, 2009.
 

 





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