BILL ANALYSIS
------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 580|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: SB 580
Author: Wright (D)
Amended: 1/13/10
Vote: 21
SENATE JUDICIARY COMMITTEE : 5-0, 1/12/10
AYES: Corbett, Harman, Hancock, Leno, Walters
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.
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)
CONTINUED
SB 580
Page
2
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.
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
SB 580
Page
3
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
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.
This bill makes a technical correction to the current
statute regarding cash medical support. Current law states
that the court shall order additional child support for the
reasonable uninsured health care costs of the child(ren).
(Section 4062 of the Family Code) However, a provision in
Section 4061 states that the amounts in Section 4062 "if
ordered to be paid" shall be considered additional support
for the children and specifies how it shall be computed.
The OCSE stated that this clause seemingly indicates that
there may be instances when cash medical support would not
be ordered. Accordingly, per OCSE instruction, the
conditional phrase "if ordered to be paid" would be removed
SB 580
Page
4
by this bill. This would only be a technical amendment as
current law does already mandate the sharing of
unreimbursed medical expenses by both parents. (Sections
4062-4063 of the Family Code)
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 1/14/10)
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
SB 580
Page
5
(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."
RJG:mw 1/14/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
**** END ****