BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                   SB 580|
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                              UNFINISHED BUSINESS


          Bill No:  SB 580
          Author:   Wright (D)
          Amended:  6/7/10 
          Vote:     21

           
           SENATE JUDICIARY COMMITTEE  :  5-0, 1/12/10
          AYES:  Corbett, Harman, Hancock, Leno, Walters

           SENATE FLOOR  :  36-0, 1/25/10
          AYES:  Aanestad, Ashburn, Calderon, Cedillo, Cogdill,  
            Corbett, Correa, Cox, Denham, DeSaulnier, Ducheny,  
            Dutton, Hancock, Harman, Hollingsworth, Huff, Kehoe,  
            Leno, Liu, Lowenthal, Negrete McLeod, Oropeza, Padilla,  
            Pavley, Price, Romero, Runner, Simitian, Steinberg,  
            Strickland, Walters, Wiggins, Wolk, Wright, Wyland, Yee
          NO VOTE RECORDED:  Alquist, Florez, Maldonado, Vacancy

           ASSEMBLY FLOOR  :  75-0, 6/21/10 (Consent) - See last page  
            for vote


           SUBJECT  :    Child support:  health insurance

           SOURCE  :     Department of Child Support Services


           DIGEST :    This bill defines the terms reasonable cost and  
          accessible as they pertain to medical support orders in  
          order to meet federal regulation requirements.  

           Assembly Amendments  added clarifying language allowing a  
          court to not require medical support.
                                                           CONTINUED





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           ANALYSIS  :    Existing law requires that a parent maintain  
          health insurance coverage for a supported child when that  
          insurance is available at no cost or at a reasonable cost  
          to the parent.  (Section 3751 of the Family Code) 

          Existing law provides that health insurance coverage shall  
          be rebuttably presumed to be reasonable in cost for a  
          supported child if it is group health insurance, as  
          specified.  (Section 3751 of the Family Code)

          Existing law provides that the actual cost of the health  
          insurance to the obligor shall be considered in determining  
          whether the cost of insurance is reasonable.  (Section 3751  
          of the Family Code)

          Existing law provides that the court shall consider  
          geographic access and reasonable availability of necessary  
          health care for a supported child when examining whether an  
          order for medical support is reasonable.  (Section 4063 of  
          the Family Code)

          Existing law provides that the court shall order additional  
          child support for the reasonable uninsured health care  
          costs of the supported child(ren).  (Section 4062 of the  
          Family Code)

          Existing federal regulations require that all support  
          orders in program cases receiving services under Title IV-D  
          of the Social Security Act (42 USC Section 651 et seq.)  
          address medical child support.  Existing federal  
          regulations define reasonable-cost health insurance, and  
          require health insurance to be accessible, as defined by  
          the State.  (45 CFR Sections 303.30-303.31) 

          This bill provides that health insurance for a supported  
          child is rebuttably presumed to be reasonable in cost if  
          the cost to the responsible parent providing medical  
          support does not exceed five percent of his/her gross  
          income.  

          This bill provides that if an obligor is entitled to a  
          low-income adjustment, medical support shall be deemed to  
          be not reasonable, unless the court determines that not  







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          requiring medical support would be unjust and inappropriate  
          in the particular case.

          This bill provides that health insurance is rebuttably  
          presumed to be accessible if services to be provided are  
          within 50 miles of the residence of the child(ren) subject  
          to the support order.  

           Background  

          The federal Deficit Reduction Act of 2005 (DRA) was signed  
          into law on February 8, 2006.  In addition to reauthorizing  
          and making changes in the Temporary Assistance to Needy  
          Families program (TANF), the DRA made major funding and  
          program changes to the child support program.   
          Specifically, the DRA directed the Secretary of the Health  
          and Human Services Agency to issue regulations which  
          require that state agencies administering IV-D programs  
          "enforce medical support included as part of a child  
          support order whenever health coverage is available to the  
          noncustodial parent at reasonable cost."  Section 7307 of  
          the DRA additionally stated, "[f]or the purposes of this  
          part, the term 'medical support' may include health care  
          coverage, such as coverage under a health insurance plan  
          (including payment of costs of premiums, co-payments, and  
          deductibles) and payments for medical expenses incurred on  
          behalf of a child."  

           On September 20, 2006, the federal Office of Child Support  
          Enforcement (OCSE) issued proposed regulations to implement  
          the provisions of the DRA that revise federal requirements  
          for establishing and enforcing parents' medical support  
          obligations.  The final regulations became effective on  
          July 21, 2008.  In accordance with the new regulations,  
          California state law must be amended to redefine  
          reasonable-cost insurance, and require health insurance to  
          be accessible.  Noncompliance with the new regulations  
          could result in the state's child support program being  
          placed in corrective action and could result in penalties  
          of one to three percent of the state's TANF Block Grant.   
          One percent of California's TANF Block Grant equals  
          approximately $37 million.

          This bill is the product of a workgroup convened by the  







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          Department of Child Support Services and defines the terms  
          "reasonable cost" and "accessible" as they pertain to  
          medical support orders in order to meet federal regulation  
          requirements.  

           Prior Legislation

           AB 2208 (Caldera), Chapter 1269, Statutes of 1994, provided  
          that health insurance coverage is rebuttably presumed to be  
          reasonable in cost if it is employment-related group health  
          insurance or other group health insurance regardless of the  
          service delivery mechanism.

          AB 2650 (Speier), Chapter 162, Statutes of 1994, required  
          that health insurance coverage for children be maintained  
          by either or both parents if that insurance is available at  
          no cost or at nominal cost to the parent(s).

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No    
          Local:  No

           SUPPORT  :   (Verified  6/22/10)

          Department of Child Support Services (source)


           ARGUMENTS IN SUPPORT  :    According to the author's office,  
          "Federal regulations for the medical support provisions of  
          the Federal Deficit Reduction Act became effective on July  
          21, 2008.  The Department of Child Support Services (DCSS)  
          convened a workgroup comprised of local child support  
          agency directors, department staff, and representatives  
          from the Administrative Office of the Courts in order to  
          assess whether changes had to be made in order to maintain  
          compliance with the new regulations.  DCSS also solicited  
          feedback from the federal Office of Child Support  
          Enforcement (OCSE) as to California's current statutes  
          regarding medical support and conformance with federal  
          regulations.  In a letter dated December 14, 2009, the OCSE  
          informed DCSS that California statutes pertaining to  
          medical support must be amended to (1) define "reasonable  
          cost" with an income-based numeric standard, (2) define  
          private health insurance as being accessible to children  
          through quantifiable geographic and/or time parameters, and  







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          (3) make a technical correction to a provision that implies  
          medical support need not be ordered in every case.  This  
          bill has been introduced in order to make these changes and  
          maintain compliance with federal regulations." 


           ASSEMBLY FLOOR  : 
          AYES:  Adams, Ammiano, Anderson, Arambula, Bass, Beall,  
            Bill Berryhill, Tom Berryhill, Block, Blumenfield,  
            Bradford, Brownley, Buchanan, Caballero, Charles  
            Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De  
            La Torre, De Leon, DeVore, Eng, Evans, Feuer, Fletcher,  
            Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,  
            Garrick, Gatto, Gilmore, Hagman, Hall, Harkey, Hayashi,  
            Hernandez, Hill, Huber, Huffman, Jeffries, Knight, Lieu,  
            Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning,  
            Nava, Nestande, Niello, Nielsen, Norby, V. Manuel Perez,  
            Portantino, Ruskin, Salas, Saldana, Smyth, Solorio, Audra  
            Strickland, Swanson, Torlakson, Torres, Torrico, Tran,  
            Villines, Yamada, John A. Perez
          NO VOTE RECORDED:  Blakeslee, Jones, Silva, Skinner,  
            Vacancy


          RJG:mw  6/22/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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