Current Status Introducing Body:Senate Bill Number:1358 Ratification Number:556 Act Number:481 Primary Sponsor:Leatherman Type of Legislation:GB Subject:Income withholding for child support Date Bill Passed both Bodies:19940602 Computer Document Number:CYY/16038AC.94 Governor's Action:S Date of Governor's Action:19940714 Introduced Date:19940414 Date of Last Amendment:19940601 Last History Body:------ Last History Date:19940714 Last History Type:Act No. 481 Scope of Legislation:Statewide All Sponsors:Leatherman J. Verne Smith Glover Martin Matthews McGill Peeler Type of Legislation:General Bill
Bill Body Date Action Description CMN Leg Involved
---- ------ ------------ --------------------------------- ------------
1358 ------ 19940714 Act No. 481
1358 ------ 19940714 Signed by Governor
1358 ------ 19940602 Ratified R 556
1358 Senate 19940602 Concurred in House amendment,
enrolled for ratification
1358 House 19940602 Read third time, returned to
Senate with amendment
1358 House 19940601 Amended, read second time,
unanimous consent for third
reading on next Legislative
day
1358 House 19940526 Debate adjourned until
Tuesday, May 31, 1994
1358 House 19940518 Recalled from Committee 30
1358 House 19940503 Introduced, read first time, 30
referred to Committee
1358 Senate 19940428 Amended, read third time,
sent to House
1358 Senate 19940427 Returned to third reading
Calendar with notice of
general amendments
1358 Senate 19940427 Reconsidered vote whereby
read third time
1358 Senate 19940427 Read third time, sent to House
1358 Senate 19940426 Read second time, unanimous
consent for third reading on
Wednesday, April 27, 1994
1358 Senate 19940426 Recalled from Committee 02
1358 Senate 19940414 Introduced, read first time, 02
referred to Committee
View additional legislative information at the LPITS web site.
(A481, R556, S1358)
AN ACT 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 TO PROVIDE 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 PARENT'S 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 CHANGE REFERENCES TO CONFORM TO ACT 181 OF 1993, RESTRUCTURING OF STATE GOVERNMENT; 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"; TO RENAME SUBARTICLE 6, ARTICLE 9, CHAPTER 7, TITLE 20 "INCOME WITHHOLDING"; TO ADD SECTION 44-7-77 SO AS TO REQUIRE THE DEPARTMENT OF HEALTH AND ENVIRONMENTAL CONTROL AND THE DEPARTMENT OF SOCIAL SERVICES TO DEVELOP A PROGRAM PROMOTING OBTAINING IN-HOSPITAL PATERNITY ACKNOWLEDGEMENTS; AND TO AMEND SECTION 20-7-956, RELATING TO EVIDENCE ADMISSIBLE IN A PATERNITY HEARING, SO AS TO PROVIDE THAT A VOLUNTARY ACKNOWLEDGEMENT OF PATERNITY CREATES A CONCLUSIVE PRESUMPTION OF PATERNITY.
Be it enacted by the General Assembly of the State of South Carolina:
Income withholding for payment of medical expenses for children
SECTION 1. Subarticle 6, Article 9, Chapter 7, Title 20 of the 1976 Code is amended by adding:
Section 20-7-1200. To be enforced pursuant to this part of Subarticle 6, a court 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 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 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 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 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 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 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 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."
Health insurance for children placed for adoption
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."
Insurers' obligations to provide coverage to children under parent's policy
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 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 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."
Commission to seek medicaid reimbursement from estate
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 U.S.C. 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."
Definition revised
SECTION 5. Section 43-7-410(F) of the 1976 Code is amended to read:
"(F) `Private insurer' means:
(1) a commercial insurance company offering health or casualty insurance to individuals or groups, including experienced-rated contracts and indemnity contracts;
(2) 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;
(3) 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; or
(4) a group health plan, as defined in Section 607(1) of the Employee Retirement Income Security Act of 1974, a service benefit plan, or a health maintenance organization."
Medicaid eligibility may not be considered
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."
Commission acquires individual's right to payment
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."
Priority of creditor's claims
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 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."
References to conform to restructuring
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.
Sections designated Part II; subarticle renamed
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".
In-hospital paternity acknowledgement program
SECTION 11. The 1976 Code is amended by adding:
"Section 44-7-77. The Department of Health and Environmental Control, and the Department of Social Services, in conjunction with the South Carolina Hospital Association, shall develop and implement a program to promote obtaining the voluntary acknowledgments of paternity before a newborn is released from the hospital."
Conclusive presumption of paternity created
SECTION 12. Section 20-7-956(6) of the 1976 Code is amended to read:
"(6) A verified voluntary acknowledgment of paternity which creates a rebuttable presumption of the putative father's paternity.
(7) Any other relevant and competent evidence deemed admissible in the discretion of the court."
Time effective
SECTION 13. This act takes effect upon approval by the Governor.
Approved the 14th day of July, 1994.