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The court may consider a private health insurance plan to be available at a reasonable cost if the cost to enroll the child or children does not exceed 5% of the insuring parent's monthly income available for child support. In applying this 5% standard, the cost to enroll the child or children in a private health insurance plan is the cost to add the child or children to existing coverage or the difference between the cost of self-only coverage and the cost to that parent after adding the child or children.
•
The court may order the non-insuring parent to contribute to the cost to enroll the children in a private health insurance plan in an amount that does not exceed 5% of the non-insuring parent's monthly income available for child support.
The court may not order a parent whose income is below 150% of the federal poverty level to enroll a child in a private health insurance plan or contribute to the cost of private health insurance unless there is no cost to the parent.
If there is no private health insurance plan available that is accessible to the child and reasonable in cost, the court may order enrollment in a private health insurance plan as a deviation under s.
767.11 (1m), Stats.; responsibility for a contribution to the cost of the other parent's premium for the BadgerCare Plus program, unless the parent's income is below 150% of the federal poverty level; and enrollment in a private health insurance plan if a plan that meets these requirements becomes available to the parent in the future.
If a child is already enrolled in an accessible private health insurance plan that covers hospitalization and other medical costs without large out-of-pocket deductibles or copayments, the court may determine whether to order a parent to enroll the child in a private health insurance plan.
The court shall also establish an order for medical expenses that are not covered by insurance. The court shall consider each parent's ability to pay these medical expenses.
Guidelines Review
45 CFR 302.56(e) requires states to review, and revise, if appropriate, the state's child support guidelines at least once every 4 years to ensure that their application results in the determination of appropriate child support award amounts. The Department submitted the latest review of the Wisconsin child support guidelines to the federal Office of Child Support Enforcement in January 2008. This review included the following 2 recommendations for changes to the child support guidelines in DCF 150:
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Extend the application of the special provision for low-income payers in s.
DCF 150.04 (4) and Appendix
C from below 125% of the federal poverty guidelines to below 150% of the federal poverty guidelines. The current rule provides a schedule with reduced percentage rates to be used to determine the child support obligation for payers with an income below approximately 125% of the federal poverty guidelines if the court determines that the payer's total economic circumstances limit his or her ability to pay support at the level determined using the full percentage rates. For income between approximately 75% and 125% of the federal poverty guidelines, the percentage rates gradually increase as income increases. The proposed rule will extend use of the reduced percentages to payers with an income below 150% of the federal poverty guidelines.
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Change the term “serial-family payer" to “serial-family parent" to conform the rule to the intent for serial family cases with a previous shared-placement obligation. The concept behind the special provision for shared-placement parents is that the order is smaller than a full percentage order because the parent has significant placement and is covering the child's basic support expenses while with that parent. The concept behind the special provision for serial families is to give credit for the amount spent on the first family before determining the order for children in the next family. The current serial family provision refers to the “payer" in a shared-placement order in giving credit for the amount spent on the earlier children. The Department proposes to change “payer" to “parent" so a parent who did not owe child support under the shared-placement provision will clearly still be entitled to credit for pre-existing obligations in the determination of support under the serial family provision.
Other Recommendation by the Child Support Policy Advisory Committee
When parents have 2 or more children and each parent has placement of one or more but not all of the children, the parents have split placement. Under the current rule, the child support obligation for split-placement parents may be determined by multiplying each parent's monthly income available for child support by the appropriate percentage standard for the number of children placed with the other parent and offsetting the resulting amounts against each other.
If each parent has placement of one child, the support obligation would be determined by multiplying each parent's income by 17%, the percentage standard for one child, and offsetting the results. If one parent had placement of both children, the other parent's child support obligation would be determined by multiplying that parent's income by 25%, the percentage standard for 2 children. Some parents with split placement believe that they are unfairly being required to pay a higher level of support under the current rule on split placement since the total support paid for 2 children would be 34% of the parents' income.
The proposed rule provides a new method for determining the child support obligations of split-placement parents. Under the proposed rule, each parent's income will be multiplied by the pro rata percentage standard for the number of children in split placement who are placed with the other parent. The pro rata percentage standard is calculated by determining the appropriate percentage standard for the total number of children, dividing by the total number of children, and adding together the percentages for the children in split placement who are placed with the other parent. If each parent has placement of one child, the support obligation would be determined by multiplying each parent's income by 12.5% (25% percentage standard for 2 children ÷ 2) and offsetting the results.
Other proposed rule changes are for clarification and are not substantive.
Summary of related federal requirements
Background on Medical Support
The first federal requirement that medical support be addressed in child support cases was in the Child Support Amendments of 1984. States were required to petition for medical child support in cases enforced under Section IV-D of the Social Security Act (IV-D cases) if health care coverage was available to the noncustodial parent at a reasonable cost. Reasonable cost was defined as coverage available through the noncustodial parent's employment. The IV-D cases included custodial parents receiving AFDC or Medicaid and non-AFDC cases with the custodial parent's consent.
In 1989, a change to
45 CFR 302.56 required states to establish one set of guidelines for setting and modifying child support award amounts within the state with a rebuttable presumption that the guidelines would apply in all child support cases. Among other things, the regulation required that the guidelines must, at a minimum, provide for the child's health care needs through health insurance coverage or other means. It did not specify how health care needs should be addressed.
The Child Support Performance and Incentive Act of 1998 required health care coverage in IV-D cases, while previous law merely required States to petition for inclusion of health care coverage. This Act also directed the Secretaries of the Department of Labor and the Department of Health and Human Services to establish a Medical Child Support Working Group to identify impediments to the effective enforcement of medical support and to make recommendations to eliminate them. The Working Group released their report,
21 Million Children's Health: Our Shared Responsibility, in August 2000. The report is available at
http://www.acf.hhs.gov/programs/cse/pubs/2000/reports/
medrpt/.
New Medical Support Provisions
Several of the key recommendations of the Working Group were adopted in the Deficit Reduction Act of 2005 and new medical support regulations issued on July 21, 2008. (
Child Support Enforcement Program; Medical Support; Final Regulation, 73 Federal
Register 42416). As amended,
42 USC 666(a)(19) provides that all IV-D child support orders shall include a provision for medical support for the child to be provided by either or both parents. State IV-D agencies now have the option of enforcing medical support against a custodial parent if health care coverage is available to the custodial parent at a reasonable cost.
The new regulation on securing and enforcing medical support obligations at
45 CFR 303.31 is more specific than the previous medical support section. It provides that the State IV-D agency must petition the court to include private health insurance that is accessible to the child, as defined by the State, and is available to the parent responsible for providing medical support at a reasonable cost in new or modified court orders for support.
If private health insurance is not available at the time the order is entered or modified, the State must petition to include cash medical support in new or modified orders until health insurance that is accessible and reasonable in cost becomes available. In appropriate cases, as defined by the State, cash medical support may be sought in addition to health insurance coverage.
Cash medical support or the cost of private health insurance is considered “reasonable in cost" if the cost to the parent responsible for providing medical support does not exceed 5% of his or her gross income or, at State option, a reasonable alternative income-based numeric standard defined in the state child support guidelines. In applying the 5% or alternative state standard for the cost of private health insurance, the cost is the cost of adding the child or children to the existing coverage or the difference between self-only and family coverage.
“Health insurance" includes fee for service, health maintenance organization, preferred provider organization, and other types of coverage that is available to either parent, under which medical services could be provided to a dependent child.
“Cash medical support" means an amount ordered to be paid toward the cost of health insurance provided by a public entity or by another parent through employment or otherwise, or for other medical costs not covered by insurance.
On pages 42423-42424 of the preamble to the rule, commenters requested clarification on including unfixed, unreimbursed medical expenses in the definition of cash medical support subject to the reasonable cost limitations because this would unfairly place the burden for these costs on the custodial parent. The Administration for Children and Families responded that they agree it would not be appropriate at the time an order is established to include the cost of future, uncertain, and unspecified medical costs when applying the 5% cost-reasonableness standard. They further state that they do not agree that responsibility for extraordinary medical costs set in a subsequent medical support order should be ordered without any consideration of the obligated parent's ability to pay at the time the cost is incurred or reimbursement is sought.
New Medical Support Provision Affects All Child Support Awards
The new medical support regulations affect all child support awards, not just IV-D cases. The amended
45 CFR 302.56 requires that state guidelines for setting and modifying all child support amounts within the state address how the parents will provide for a child's health care needs through health insurance coverage or cash medical support, or both, in accordance with
45 CFR 303.31, the new medical support regulation.
Comparison with rules in adjacent states
All states are required to comply with the new federal regulation affecting medical support.
Summary of factual data and analytical methodologies
The proposed rules will adopt provisions of a new federal regulation on medical support in child support cases, recommendations of the Department's child support guidelines review, and a recommendation by the Child Support Policy Advisory Committee.
Small Business Impact
The proposed rules do not affect small businesses as defined in s.
227.114 (1), Stats.
Fiscal Estimate
Summary
The proposed rule implements a federal regulation that is intended to increase enforcement of medical support obligations in child support orders. If there is an increase in parents who are enrolling their children in private-pay insurance, BadgerCare Plus enrollment may decrease.
Other changes to the child support guidelines in the proposed rule have no fiscal effect.
State fiscal effect
None.
Local government fiscal effect
None.
Long-range fiscal implications
None.
Agency Contact Person
Notice of Hearing
Financial Institutions — Banking
NOTICE IS HEREBY GIVEN That pursuant to section
9117 of
2009 Wisconsin Act 2 and section
227.11 (2), Stats., the Department of Financial Institutions, Division of Banking will hold a public hearing to consider an emergency rule to create chapter DFI–Bkg 47 and repeal chapter DFI–Bkg 41, relating to the transition from a registration system to a license system.
Hearing Information
Date: June 10, 2009
Time: 10:00 a.m.
Location: Office of the Secretary
Wis. Dept. of Financial Institutions
345 W. Washington Avenue, 5th floor
Madison, Wisconsin 53703
Analysis Prepared by the Department of Financial Institutions — Division of Banking
Statute interpreted
Statutory authority
Related statute or rule
Chapter DFI – Bkg 41.
Explanation of agency authority
Pursuant to subch.
III of ch. 224, Stats., and s.
220.02 (2) and
(3), Stats., the division regulates mortgage bankers, mortgage brokers and loan originators.
Summary of proposed rule
The objective of the rule is to create ch. DFI–Bkg 47 and to eventually repeal ch. DFI–Bkg 41.
2009 Wisconsin Act 2 provides that the division shall by rule institute a system of initial license issuance or license renewal that it deems advisable for the purpose of implementing an orderly and efficient transition from the registration system under subchapter III of chapter 224, 2007 Stats., to the license system under subch.
III of ch. 224, Stats., as affected by
2009 Wisconsin Act 2. The purpose of this rule is to set forth the transition to that system.
Comparison with federal regulations
Title V, S.A.F.E. Mortgage Licensing Act, ss. 1501 – 1517. This act encourages states to participate in the Nationwide Mortgage Licensing System and Registry, and requires states to have in place, by law or regulation, a system for licensing and registering mortgage loan originators that meets the requirements of sections 1505, 1506, and 1508(d) of the act.
Comparison with rules in adjacent states
Illinois and Iowa have adopted this act; Minnesota and Michigan have not.
Summary of factual data and analytical methodologies
The department reviewed its regulatory practices and procedures, solicited input from affected entities to determine the necessary regulations, and worked internally with staff on the mechanics of the transition.
Analysis and supporting documentation used to determine effect on small business
The rule does not have a significant economic impact on small business. The requirement to transition from a registration system to a license system are the result of and set forth in
2009 Wisconsin Act 2, and not the rule. Fee revisions herein include a proration and refund of fees paid under the current registration system.
Exemption from Finding of Emergency
The legislature by section
9117 of
2009 Wisconsin Act 2 provides an exemption from a finding of emergency for the adoption of the rule.
Fiscal Estimate
The emergency rule may increase costs that may be possible to absorb within the agency's budget. There are no local government costs.
Copies of Proposed Rule, Submission of Written Comments
To obtain a copy of the proposed rule or fiscal estimate at no charge, to submit written comments regarding the proposed rule, or for questions regarding the agency's internal processing of the proposed rule, contact Mark Schlei, Deputy General Counsel, Department of Financial Institutions, Office of the Secretary, P.O. Box 8861, Madison, WI 53708-8861, tel. (608) 267-1705, e-mail
mark.schlei@ wisconsin.gov. A copy of the proposed rule may also be obtained and reviewed at the Department of Financial Institution's website,
www.wdfi.org. Written comments must be received by the conclusion of the department's hearing regarding the proposed rule.
Agency Contact Person
For substantive questions on the rule, contact Michael J. Mach, Administrator, Department of Financial Institutions, Division of Banking, P.O. Box 7876, Madison, WI 53707-7876, tel: (608) 266-0451, email: mike.mach@ wisconsin.gov.
REVISED Notice of Hearing
Natural Resources
Fish, Game, etc., Chs.
NR 1—
