H 5095 Session 110 (1993-1994)
H 5095 General Bill, By Young-Brickell, J.G. Felder, J.S. Shissias and
J.M. White
Similar(S 1358)
A Bill to amend Subarticle 6, Article 9, Chapter 7, Title 20, Code of Laws of
South Carolina, 1976, relating to income withholding for child support by
adding Sections 20-7-1200, 20-7-1210, 20-7-1220, 20-7-1230, 20-7-1240,
20-7-1250, 20-7-1260, 20-7-1270, and 20-7-1280, so as to provide procedures
for medical child support and income withholding, including provisions
required in a court order if a parent is required to provide health coverage;
employers' and health insurers' obligations upon receipt of an order requiring
a parent to provide health coverage, including the withholding ofwages for the
cost of health insurance premiums; authority for the state medicaid agency to
seek income withholding for reimbursement for expenditures on behalf of a
child; the priority of medical income withholding over other legal processes;
prohibiting an employer from taking action against an employee because of an
income withholding order for health coverage and penalties; by adding Section
38-71-143 so as to provide circumstances under which health insurance coverage
must be provided for an adopted child or a child placed for adoption; by
adding Section 38-71-245 so as to provide circumstances under which a health
insurer is prohibited from denying a child enrollment in a health plan; by
adding Section 38-71-250 so as to require a health insurer to enroll a child
and provide coverage if the child's parent is ordered to provide coverage and
is eligible for family coverage; by adding Section 38-71-255 so as to prohibit
a health insurer from treating the state medicaid agency differently from
other individuals if the agency has been assigned the rights of a peron
covered under the insured's plan; by adding Section 38-71-260 so as to require
a health insurer to provide certain information and rights to a noncustodial
parent who provides coverage of their child through that insurer; by adding
Section 38-71-265 so asto prohibit an insurer from considering a person's
eligibility for medicaid when enrolling a person or making payments under its
plan and to assign the rights to the State for third party reimbursement when
the State has made payments under medicaid on behalf of a person; and by
adding Section 43-7-460 so as to direct the Health and Human Services Finance
Commission to seek recovery from the estate of a person for whom medical
assistance was paid for undermedicaid and to provide certain conditions and
procedures for seeking the recovery; to amend Section 43-7-410, relating to
definitions pertaining to reimbursement for medicaid services, so as to revise
the definition of "private insurer"; to amend Section 43-7-440,relating to the
enforcement and assignment of rights of medicaid recipients, so as to prohibit
an issuer from taking into account that an applicant is eligible for medicaid
and to provide that the State acquires the rights of an individual for medical
payments when the person received medical assistance paid for under medicaid;
to amend Section 62-3-805, relating to classification of creditors' claims
from a decedent's estate, so as to include medical assistance paid for under
medicaid; to designate Sections 20-7-1315 through 20-7-1329 as Part II,
Subarticle 6, Article 9, Chapter 7, Title 20 entitled "Income Withholding to
Enforce Support Obligations"; and to rename Subarticle 6, Article 9, Chapter
7, Title 20 "Income Withholding".
04/14/94 House Introduced and read first time HJ-13
04/14/94 House Referred to Committee on Judiciary HJ-15
A BILL
TO AMEND SUBARTICLE 6, ARTICLE 9, CHAPTER 7, TITLE 20,
CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO
INCOME WITHHOLDING FOR CHILD SUPPORT BY ADDING
SECTIONS 20-7-1200, 20-7-1210, 20-7-1220, 20-7-1230, 20-7-1240,
20-7-1250, 20-7-1260, 20-7-1270, AND 20-7-1280, SO AS TO
PROVIDE PROCEDURES FOR MEDICAL CHILD SUPPORT AND
INCOME WITHHOLDING, INCLUDING PROVISIONS REQUIRED
IN A COURT ORDER IF A PARENT IS REQUIRED TO PROVIDE
HEALTH COVERAGE; EMPLOYERS' AND HEALTH INSURERS'
OBLIGATIONS UPON RECEIPT OF AN ORDER REQUIRING A
PARENT TO PROVIDE HEALTH COVERAGE, INCLUDING THE
WITHHOLDING OF WAGES FOR THE COST OF HEALTH
INSURANCE PREMIUMS; AUTHORITY FOR THE STATE
MEDICAID AGENCY TO SEEK INCOME WITHHOLDING FOR
REIMBURSEMENT FOR EXPENDITURES ON BEHALF OF A
CHILD; THE PRIORITY OF MEDICAL INCOME WITHHOLDING
OVER OTHER LEGAL PROCESSES; PROHIBITING AN
EMPLOYER FROM TAKING ACTION AGAINST AN EMPLOYEE
BECAUSE OF AN INCOME WITHHOLDING ORDER FOR
HEALTH COVERAGE AND PENALTIES; BY ADDING SECTION
38-71-143 SO AS TO PROVIDE CIRCUMSTANCES UNDER
WHICH HEALTH INSURANCE COVERAGE MUST BE PROVIDED
FOR AN ADOPTED CHILD OR A CHILD PLACED FOR
ADOPTION; BY ADDING SECTION 38-71-245 SO AS TO PROVIDE
CIRCUMSTANCES UNDER WHICH A HEALTH INSURER IS
PROHIBITED FROM DENYING A CHILD ENROLLMENT IN A
HEALTH PLAN; BY ADDING SECTION 38-71-250 SO AS TO
REQUIRE A HEALTH INSURER TO ENROLL A CHILD AND
PROVIDE COVERAGE IF THE CHILD'S PARENT IS ORDERED TO
PROVIDE COVERAGE AND IS ELIGIBLE FOR FAMILY
COVERAGE; BY ADDING SECTION 38-71-255 SO AS TO
PROHIBIT A HEALTH INSURER FROM TREATING THE STATE
MEDICAID AGENCY DIFFERENTLY FROM OTHER
INDIVIDUALS IF THE AGENCY HAS BEEN ASSIGNED THE
RIGHTS OF A PERSON COVERED UNDER THE INSURED'S
PLAN; BY ADDING SECTION 38-71-260 SO AS TO REQUIRE A
HEALTH INSURER TO PROVIDE CERTAIN INFORMATION AND
RIGHTS TO A NONCUSTODIAL PARENT WHO PROVIDES
COVERAGE OF THEIR CHILD THROUGH THAT INSURER; BY
ADDING SECTION 38-71-265 SO AS TO PROHIBIT AN INSURER
FROM CONSIDERING A PERSON'S ELIGIBILITY FOR MEDICAID
WHEN ENROLLING A PERSON OR MAKING PAYMENTS UNDER
ITS PLAN AND TO ASSIGN THE RIGHTS TO THE STATE FOR
THIRD PARTY REIMBURSEMENT WHEN THE STATE HAS
MADE PAYMENTS UNDER MEDICAID ON BEHALF OF A
PERSON; AND BY ADDING SECTION 43-7-460 SO AS TO DIRECT
THE HEALTH AND HUMAN SERVICES FINANCE COMMISSION
TO SEEK RECOVERY FROM THE ESTATE OF A PERSON FOR
WHOM MEDICAL ASSISTANCE WAS PAID FOR UNDER
MEDICAID AND TO PROVIDE CERTAIN CONDITIONS AND
PROCEDURES FOR SEEKING THE RECOVERY; TO AMEND
SECTION 43-7-410, RELATING TO DEFINITIONS PERTAINING
TO REIMBURSEMENT FOR MEDICAID SERVICES, SO AS TO
REVISE THE DEFINITION OF "PRIVATE INSURER";
TO AMEND SECTION 43-7-440, RELATING TO THE
ENFORCEMENT AND ASSIGNMENT OF RIGHTS OF THE
HEALTH AND HUMAN SERVICES FINANCE COMMISSION AND
INSURANCE CONTRACT RIGHTS OF MEDICAID RECIPIENTS,
SO AS TO PROHIBIT AN ISSUER FROM TAKING INTO
ACCOUNT THAT AN APPLICANT IS ELIGIBLE FOR MEDICAID
AND TO PROVIDE THAT THE STATE ACQUIRES THE RIGHTS
OF AN INDIVIDUAL FOR MEDICAL PAYMENTS WHEN THE
PERSON RECEIVED MEDICAL ASSISTANCE PAID FOR UNDER
MEDICAID; TO AMEND SECTION 62-3-805, RELATING TO
CLASSIFICATION OF CREDITORS' CLAIMS FROM A
DECEDENT'S ESTATE, SO AS TO INCLUDE MEDICAL
ASSISTANCE PAID FOR UNDER MEDICAID; TO DESIGNATE
SECTIONS 20-7-1315 THROUGH 20-7-1329 AS PART II,
SUBARTICLE 6, ARTICLE 9, CHAPTER 7, TITLE 20 ENTITLED
"INCOME WITHHOLDING TO ENFORCE SUPPORT
OBLIGATIONS"; AND TO RENAME SUBARTICLE 6,
ARTICLE 9, CHAPTER 7, TITLE 20 "INCOME
WITHHOLDING".
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Subarticle 6, Article 9, Chapter 7, Title 20 of the 1976
Code is amended by adding:
"Part I
Medical Child Support and Income Withholding
Section 20-7-1200. To be enforced pursuant to this part of Subarticle
6, a court or administrative order which requires a parent to provide
health coverage for a child must:
(1) clearly specify:
(a) the name, social security number, and last known mailing
address, if any, of the parent and the name, social security number, date
of birth, and mailing address of each child covered by the order;
(b) a reasonable description of the type of coverage to be
provided by the plan to each child or the manner in which the type of
coverage is to be determined;
(c) the period to which the order applies;
(d) each plan to which the order applies; and
(2) not require a plan to provide a type or form of benefit or an
option, not otherwise provided under the plan, except to the extent
necessary to meet the requirements of this part of Subarticle 6.
Section 20-7-1210. If a court or administrative order requiring a
parent to provide health coverage to a child is received by an employer
or a health insurer, including a group health plan as defined in Section
607(1) of the Employee Retirement Income Security Act of 1974 or
health maintenance organization as defined in Section 38-33-20:
(1) the employer or health insurer promptly shall notify the parent
and each child of the receipt of the order and the employer's or insurer's
procedures for determining whether the order is covered by this part of
Subarticle 6;
(2) within a reasonable period after receipt of the order, the
employer or insurer shall determine whether the order is covered by this
part of Subarticle 6 and notify the parent and each child of the
determination;
(3) shall establish reasonable procedures to determine whether the
order is covered by this part of Subarticle 6 and to administer the
provision of benefits under qualified orders. The procedures must:
(a) be in writing;
(b) provide for the notification of each person specified in the
order as eligible to receive benefits, at the address included in the order,
of these procedures promptly upon receipt by the employer or insurer of
the order; and
(c) permit the court or the child's legal guardian to designate a
representative for receipt of copies of notices that are sent with respect
to a medical child support order.
Section 20-7-1220. (A) If a parent is required by a court or
administrative order to provide health coverage for a child and the parent
is eligible for family health coverage through an employer in this State,
notice and a copy of the order must be sent to the employer. The notice
and copy of the order may be sent by first class mail. The notice must
explain all of the employer's legal obligations under this part of
Subarticle 6. Upon receipt of notice and the order, the employer shall:
(1) permit the parent to enroll, under the family coverage, a child
who is otherwise eligible for the coverage without regard to any
enrollment season restrictions;
(2) if the parent is enrolled but fails to make application to obtain
coverage for the child, enroll the child under family coverage upon
application of:
(a) the child's other parent;
(b) the state agency administering the Medicaid program; or
(c) the state agency administering 42 U.S.C. Sections 651 to
669, the child support enforcement program; and
(3) continue coverage of the child unless the employer:
(a) is provided satisfactory written evidence that the court or
administrative order is no longer in effect or that the child is or will be
enrolled in comparable health coverage through another insurer which
will take effect not later than the effective date of disenrollment; or
(b) has eliminated family health coverage for all of its
employees.
(B) An employer who has received a copy of a court or
administrative order pursuant to this section is bound by the order until
further notice by the court. The employer shall notify the court within
twenty days after the parent named in the order is no longer employed
and shall provide the parent's last known address and the name and
address of the parent's new employer, if known.
Section 20-7-1230. If a court or administrative order requires a parent
to provide and maintain health coverage for a child and the parent is
eligible for family health coverage through an employer, the order shall
include a provision directing the employer to withhold from money,
income, or periodic earnings due the parent an amount which is
sufficient to provide for premiums for the health coverage offered
through the employer unless:
(1) the court finds that under regulations promulgated by the
Secretary of the Department of Health and Human Services,
circumstances exist warranting withholding less than the employee's
share of the premiums; or
(2) the amount withheld exceeds the maximum amount permitted to
be withheld under the federal Consumer Credit Protection Act.
Income withholding takes effect immediately upon completion of
enrollment requirements.
Section 20-7-1240. To the extent necessary to reimburse the state
agency administering the Medicaid program for expenditures on behalf
of a child, the agency may petition the court seeking withholding of
employment income or State tax refunds from a person who:
(1) is required by a court or administrative order to provide and
maintain health coverage for a child who is eligible for medical
assistance under a State Plan for Medical Assistance pursuant to Title
XIX of the Social Security Act;
(2) has received payment from a third party for the costs of health
care items or services; and
(3) has not used the payment to reimburse, as appropriate, either the
other parent or guardian of the child or the provider of the items or
services.
Claims for current or past due child support take priority over claims
filed pursuant to this section.
Section 20-7-1250. (A) A court or administrative order which
requires income withholding pursuant to this part of Subarticle 6 has
priority over all other legal processes under state law against money,
income, or periodic earnings of the noncustodial parent except an order
of income withholding for child support.
(B) A person under a court order to provide and maintain health care
coverage as of July 1, 1994, is subject to the income withholding for
health coverage provisions of this part of Subarticle 6. The only ground
to contest an order of income withholding for health coverage is a
mistake of fact. If the person contests the withholding because of a
mistake of fact, the court shall provide the person an opportunity to
present his or her case. The court shall determine whether to order
withholding and shall notify the person of the determination and, if
appropriate, the time period in which withholding will commence.
Section 20-7-1260. Within thirty days after receipt of an order
requiring the obligated parent to provide health care coverage for a
child, the parent or employer must provide the child's other parent
written proof that the insurance has been obtained or that an application
for insurance has been made. Proof of insurance coverage consists of,
at a minimum:
(1) the name of the insurer;
(2) the policy number;
(3) an insurance card;
(4) the address to which claims must be mailed;
(5) a description of any restriction on usage including, but not
limited to, prior approval for hospital admission and the manner in
which to obtain prior approval;
(6) description of all deductibles;
(7) five copies of claim forms.
Section 20-7-1270. An employer is prohibited from discharging,
refusing to employ, or taking other disciplinary action against a person
because of an income withholding order for health coverage. The
person has the burden of proving that income withholding for health
coverage was the sole reason for the employer's action.
Section 20-7-1280. An employer or insurer who violates any
provision of this part of Subarticle 6 is subject to the contempt power of
the court issuing the order and may be fined up to fifty dollars per
day."
SECTION 2. The 1976 Code is amended by adding:
"Section 38-71-143. (A) If an individual or group health plan
provides coverage for dependent children of participants or
beneficiaries, the plan shall provide benefits to dependent children
placed with participants or beneficiaries for adoption under the same
terms and conditions as apply to the natural, dependent children of the
participants and beneficiaries, irrespective of whether the adoption has
become final.
(B) A group health plan may not restrict coverage under the plan of
a dependent child adopted by a participant or beneficiary or placed with
a participant or beneficiary for adoption solely on the basis of a
preexisting condition of the child at the time that the child would
otherwise become eligible for coverage under the plan, if the adoption
or placement for adoption occurs while the participant or beneficiary is
eligible for coverage under the plan.
(C) For the purposes of this section:
(1) `child' means, in connection with an adoption or placement for
adoption of the child, an individual who has not attained age eighteen as
of the date of the adoption or placement for adoption;
(2) `placement for adoption' means the assumption and retention
by a person of a legal obligation for total or partial support of a child in
anticipation of the adoption of the child. The child's placement with a
person terminates upon the termination of the legal obligations."
SECTION 3. The 1976 Code is amended by adding:
"Section 38-71-245. No health insurer, including a group
health plan, as defined in Section 607(1) of the Employee Retirement
Income Security Act of 1974 or health maintenance organization as
defined in Section 38-33-20, may deny enrollment of a child under the
health plan of the child's parent on the grounds that the child:
(1) was born out of wedlock;
(2) is not claimed as a dependent on the parent's federal tax return;
or
(3) does not reside with the parent or in the insurer's service area.
Section 38-71-250. If, pursuant to a court or administrative order
which meets the specifications of Section 20-7-1200, a parent is required
to provide health coverage for a child and the parent is eligible for
family health coverage through a health insurer, including a group health
plan as defined in Section 607(1) of the Employee Retirement Income
Security Act of 1974 or health maintenance organization as defined in
Section 38-33-20, the insurer shall:
(1) permit the parent to enroll, under the family coverage, a child
who is otherwise eligible for the coverage without regard to any
enrollment season restrictions;
(2) if the parent is enrolled but fails to make application to obtain
coverage for the child, enroll the child under family coverage upon
application of:
(a) the child's other parent;
(b) the state agency administering the Medicaid program; or
(c) the state agency administering 42 U.S.C. Sections 651 to 669,
the child support enforcement program; and
(3) continue coverage of the child unless the insurer is provided
satisfactory written evidence that the:
(a) court or administrative order is no longer in effect;
(b) child is or will be enrolled in comparable health coverage
through another insurer which will take effect not later than the effective
date of disenrollment; or
(c) employer has eliminated family health coverage for all of its
employees.
Section 38-71-255. A health insurer, including a group health plan
as defined in Section 607(1) of the Employee Retirement Income
Security Act of 1974 or health maintenance organization as defined in
Section 38-33-20, may not impose requirements on a state agency,
which has been assigned the rights of an individual eligible for medical
assistance under Medicaid who is also covered under a plan issued by
the health insurer, that are different from requirements applicable to an
agent or assignee of any other individual so covered.
Section 38-71-260. If a child has health coverage through the health
insurer including a group health plan, as defined in Section 607(1) of the
Employee Retirement Income Security Act of 1974 or health
maintenance organization as defined in Section 38-33-20, of a
noncustodial parent, the insurer shall:
(1) provide information to the custodial parent as may be necessary
for the child to obtain benefits through that coverage;
(2) permit the custodial parent or the health care provider, with the
custodial parent's approval, to submit claims for covered services
without the approval of the noncustodial parent; and
(3) make payments on claims submitted in accordance with item (2)
directly to the custodial parent, the provider, or the state Medicaid
agency.
Section 38-71-265. (A) In enrolling a person or in making any
payments for benefits to a person or on behalf of a person, no health
insurer, including a group health plan as defined in Section 607(1) of the
Employee Retirement Income Security Act of 1974 or health
maintenance organization as defined in Section 38-33-20, may take into
account that the person is eligible for or is provided medical assistance
under a State Plan for Medical Assistance pursuant to Title XIX of the
Social Security Act.
(B) In a case where a health insurer, including a group health plan
as defined in Section 607(1) of the Employee Retirement Income
Security Act of 1974 or health maintenance organization as defined in
Section 38-33-20, has a legal liability to make payments for medical
assistance to or on behalf of a person, to the extent that payment has
been made under a State Plan for Medical Assistance pursuant to Title
XIX of the Social Security Act for health care items or services
furnished to the person, the State is considered to have acquired the
rights of the person to the payment for the health care items or
services."
SECTION 4. The 1976 Code is amended by adding:
"Section 43-7-460(A). The State Health and Human Services
Finance Commission shall seek recovery of medical assistance paid
under the Title XIX State Plan for Medical Assistance from the estate of
an individual who:
(1) at the time of death was an inpatient in a nursing facility,
intermediate care facility for the mentally retarded, or other medical
institution if the individual is required, as a condition of receiving
services in the facility under the State Plan, to spend for costs of medical
care all but a minimal amount of the person's income required for
personal needs; or
(2) was fifty-five years of age or older when the individual
received medical assistance consisting of any item or service provided
under the State Plan.
(B) Recovery under this section may be made only after the death of
the decedent's surviving spouse, if any, and only at a time when the
decedent has no surviving child under age twenty-one or no child who
is blind or permanently and totally disabled as defined in Title XVI of
the Social Security Act.
(C) This section may be waived by the commission upon proof of
undue hardship as established by the Secretary of Health and Human
Services pursuant to 42 USC 1396p(b)(3).
(D) Recovery of medical assistance payments under this section
applies to medical assistance paid after June 30, 1994.
(E) Claims against an estate under this section have priority as
established in Section 62-3-805(a)(2)(ii).
(F) For purposes of this section:
(1) `estate' means all real and personal property and other assets
included within the individual's estate as defined in Section
62-1-201(11);
(2) the `State Plan' means Title XIX State Plan for Medical
Assistance in effect at the decedent's death."
SECTION 5. Section 43-7-410(F) of the 1976 Code is amended to
read:
"(F) `Private Insurer' means:
(1) any a commercial insurance company
offering health or casualty insurance to individuals or groups,
(including both experienced-rated contracts and
indemnity contracts);
(2) any a profit or nonprofit prepaid plan offering
either medical services or full or partial payment for the diagnosis or
treatment of an injury, disease, or disability; or
(3) any an organization administering health or
casualty insurance plans for professional associations, unions, fraternal
groups, employer-employee benefit plans, and any similar organization
offering these plans or services, including self-insured and self-funded
plans.;
(4) group health plans, as defined in Section 607(1) of the
Employee Retirement Income Security Act of 1974, service benefit
plans, and health maintenance organizations."
SECTION 6. Section 43-7-440(C) of the 1976 Code is amended by
adding at the end:
"In enrolling a person or in making payments for benefits
to a person or on behalf of a person, no private insurer may take into
account that the person is eligible for or is provided medical assistance
under a State Plan for Medical Assistance pursuant to Title XIX of the
Social Security Act."
SECTION 7. Section 43-7-440(D) of the 1976 Code is amended by
adding at the end:
"In a case where a third party has a legal liability to make
payments for medical assistance to or on behalf of a person, to the extent
that payment has been made under a State Plan for Medical Assistance
pursuant to Title XIX of the Social Security Act for health care items or
services furnished to the person, the State is considered to have acquired
the rights of the person to payment by any other party for the health care
items or services."
SECTION 8. Section 62-3-805(a) of the 1976 Code is amended to
read:
"(a) If the applicable assets of the estate are insufficient to
pay all claims in full, the personal representative shall make payment in
the following order:
(1) costs and expenses of administration, including attorney's fees,
and reasonable funeral expenses;
(2)(i) reasonable and necessary medical and hospital
expenses of the last illness of the decedent, including compensation of
persons attending him the decedent;
(ii) medical assistance paid under Title XIX State Plan for
Medical Assistance as provided for in Section 43-7-460;
(3) debts and taxes with preference under federal law;
(4) debts and taxes with preference under other laws of this State,
in the order of their priority;
(5) all other claims."
SECTION 9. As of July 1, 1995, references to the Health and Human
Services Finance Commission as contained in this act mean the State
Department of Health and Human Services and the Code Commissioner
is directed to change these references in the 1976 Code subject to the
availability of funds.
SECTION 10. Sections 20-7-1315 through 20-7-1329 are designated
as Part II, Subarticle 6, Article 9, Chapter 7, Title 20, entitled
"Income Withholding to Enforce Support Obligations and
Subarticle 6, Article 9, Chapter 7, Title 20, is renamed "Income
Withholding".
SECTION 11. This act takes effect upon approval by the Governor.
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