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POLICY INTERPRETATION QUESTIONS

PIQ-03-08

DATE:  July 25, 2003

TO:   State IV-D Directors

FROM: Sherri Z. Heller, Ed.D.

              Commissioner

              Office of Child Support Enforcement

SUBJECT: Medical Support in Child Support Orders - Definition of Reasonable Cost

In response to several states’ inquiries about the Texas state law definition of reasonable cost, the Office of Child Support Enforcement has reviewed the Texas medical support provisions to ensure that the Texas laws and procedures do not conflict with Federal requirements.  The following policy interpretation addresses the issues raised by Texas and our responses.

Question:  The Texas state law, at section 154.181(e) of the Texas Family Code (TFC), states “In this section, ‘reasonable cost’ means the cost of a health insurance premium that does not exceed 10 percent of the responsible parent’s net income in a month.”

Under the Texas IV-D agency’s procedures, the IV-D worker is required to petition for health care coverage in every new and modified order handled by the IV-D agency.  The IV-D agency also enforces existing court orders for medical support in accordance with Federal law.  The decision in any individual case that alternative coverage is preferable to health care coverage through the obligor’s employment is made by the court and not by the IV-D agency.

Do the Texas state law and IV-D agency procedures violate the Federal regulations at 45 CFR 303.31(a)(1) under which health insurance is considered reasonable in cost if the insurance is employment-related or other group health insurance?

Response:  Under 45 CFR 303.31, the IV-D agency must petition for health insurance in new and modified support orders.  The Texas statute governs the conduct of the courts, not IV-D agencies, and establishes a priority among sources of health insurance.  The priorities apply unless a party demonstrates good cause for not doing so.  The first priority provides for the provision of health insurance through the obligor's employment, union membership, etc., if health insurance is available at a reasonable cost, defined to be no more than 10 percent of the obligor's net income.  

The Federal definition and Texas law definition used by courts apply to different entities and therefore do not necessarily conflict.  For example, 45 CFR 303.31 applies only to IV-D agencies, and requires those agencies to petition for medical support whenever it is available to the noncustodial parent at reasonable cost.  The Federal regulation does not apply to state court practices.  

To comply with 45 CFR 303.31(b), the Texas IV-D agency must, unless the custodial parent and child(ren) have satisfactory health insurance other than Medicaid, petition the court or administrative authority to include health insurance that is available to the noncustodial parent at reasonable cost in new or modified court or administrative orders for support, notwithstanding the State’s prioritization scheme.  Thus, the IV-D agency’s Medical Support Policy and Procedures Guide must make clear that its caseworkers are obligated by Federal regulations in all cases, other than those where the custodial parent and child(ren) have satisfactory, non-Medicaid health insurance, to petition for any employment-related or other group health insurance that is available to the noncustodial parent.

Likewise, the State’s child support petition must specify that the agency is requesting medical support consistent with the Federal regulation.  The petition may not merely state, as it currently does, that "the court should order appropriate current, retroactive, and medical child support for the children ...."  The petition should reflect the IV-D agency’s obligation to request medical child support, including any employment-related or other group health insurance that is available to the noncustodial parent.  

If the State meets the above requirements, its IV-D program procedures would meet requirements in 45 CFR 303.31(b)(1).

cc: ACF Regional Administrators

Regional Program Managers