Through an innovative public-private partnership, Sacramento County, California has made low-cost, private health insurance available for hundreds of IV-D Kids since 1996. With noncustodial parents picking up the tab, county, state and federal governments garner over $ 450,000 per year in Medi-Cal (Medicaid) savings and many kids gain health coverage they previously lacked. The project, originally known as "CalKids," was developed as a Government Performance and Results Act (GPRA) demonstration under the auspices of the federal OCSE.

In 1996, Dick Williams, then the head of the Bureau of Family Support in Sacramento County, CA, was frustrated by the cases in which noncustodial parents were not ordered to pay for health insurance for their children. Typically none was available at an affordable cost - whether because the employer provided no family coverage, because that coverage was expensive, or because the noncustodial parent was self-employed.

He decided IV-D children needed low cost, private health insurance that their noncustodial parents could afford. He began calling insurance companies to gather information. Eventually, he solicited the aid of Goeffrey Kitschuk of Pacific West Administrators, the independent benefits administrator for the county's employee health insurance plan.

With the aid of Kitschuk, a former insurance actuary as well as a benefits administrator, a plan was designed to answer the concerns of the insurance companies while meeting the needs of IV-D children. This was important, according to Kitschuk, because the Bureau's requirements were demanding. “We were insisting from the beginning that no medical evidence be required. We wanted no underwriting. There had to be coverage in full from day one - with no pre-existing conditions exclusion. There could be no application. We didn't want to have to fill it out and get it approved. We would provide them the names and they would be enrolled,” he said.

Insurers were concerned about anti-selection - the tendency of people to buy health insurance only when it is needed - and had to be reassured that enrollment would not be based on children's health status. Misconceptions had to be addressed: IV-D kids are no sicker than other kids. On the plus side, the fact that most IV-D kids would be enrolled after the first year of life, the most expensive childhood year for health care providers, made it possible to negotiate for an affordable rate.

After negotiations, two companies, Kaiser and Blue Shield, agreed to provide the insurance for IV-D children for premiums of under $80 per month per child. Coverage would be equivalent to that provided under county employee health plans.

To be eligible for health insurance coverage in this program, a child must be involved in a case for which the Sacramento County Family Support Division has enforcement responsibility. In addition, the case must have a court order requiring the NCP to provide health insurance for the dependent child(ren).

Now, if a noncustodial parent does not provide proof of insurance coverage to the child support hearing commissioner, he or she may be ordered to provide coverage through the IV-D Kids Program. A withholding order, in conjunction with a wage assignment, directs employers to withhold premium payments and forward them to the program's Third Party Administrator (TPA). Self-employed obligors are ordered to pay the TPA directly. Noncustodial parents also may voluntarily enroll their children in the program, also making direct payments to the TPA.

No additional paperwork is required from either the parents or Bureau of Family Support. The routine child support paperwork is used by the TPA to enroll the child in a health plan. The TPA also forwards premium payments to insurance providers on an ongoing basis.

The TPA receives and holds premium payments regardless of the payment interval (e.g., weekly, monthly). The child is not enrolled until a full month of premiums has been received by the 15th of the month in advance of enrollment. On an ongoing basis, when the next month's premium has not arrived by the 15th, the TPA investigates, notifying the noncustodial parent of his/her obligation to pay if the employer does not. Information on new employers is passed on to the Bureau of Family Support. If neither the old or new employers nor the noncustodial parent has paid, the TPA offers the custodial parent the option of paying to keep coverage in place for the coming month.

There are now approximately 500 children enrolled in the program in Sacramento County. This results in Medi-Cal (California's Medicaid program) savings of over $450,000 per year to the county, state and federal governments for that county alone. Many of the children covered otherwise would be without health insurance. Typically their parents do not meet poverty criteria, yet cannot afford the high cost of private coverage or have no coverage available.

The impact of the program is even greater than these numbers suggest. Many noncustodial parents who initially tell the hearing commissioner that no health insurance is available through their employers - or that it is cost-prohibitive - suddenly enroll the child in an employer-sponsored plan when an order to withhold for premiums is served on their employer. State officials estimate this may double the number of children who obtain private coverage as a result of the program.

The state Office of Child Support is now encouraging all California counties to adopt the program.

The project was developed in Sacramento, CA, a medium-sized city (population 392,800). Project benefits are available throughout Sacramento county (population 1,159,900).

Bureau of Family Support staff time spent on developing and administering the program is funded through Sacramento County's IV-D program. Insurance companies and the Third Party Administrator contributed the time devoted to program design and development as business development activities and as a community service. Noncustodial parents' insurance premiums purchase the private insurance and fund administration by the Third Party Administrator. (The Third Party Administrator is paid $5 per month of each premium for insurance administration.)

Key to the success of the program according to all concerned has been the Third Party Administrator. Funded through insurance premiums, the TPA greatly facilitates the administration of the program from the perspective of both insurers and Bureau of Family Support, providing a single point of contact for both agencies. If the child support agency were to administer the program internally, additional funding would be required. Using a TPA also permits easy addition of other insurance providers who agree to the terms of the program.

The TPA acts like the gear connecting the extremely different standard practices of the insurance industry and the child support system. In essence, by collecting payments and passing on both premiums and the names of covered children, the TPA makes the IV-D Kids program “act like” a normal group to the insurers.

The state Office of Child Support has as a goal eventually combining this program with the Healthy Families program (California's CHIP program) and suggests that others considering replication do so from the start. “Then we could provide coverage that would not change as far as the child was concerned. ... We would like to see them go from completely publicly funded to partially publicly funded to parent-funded without having to change health providers,” says Stephanie Ashburn, program contact in the state office. If CHIP insurance providers were to become part of the IV-D Kids provider pool, and CHIP's excellent benefits, including dental and vision, were to become accessible at the reduced rate created by the resulting economy of scale, lower-cost insurance would be accessible to significantly more children.

Premium cost is a significant concern. Participation in the IV-D Kids program is highly sensitive to rate: as premium costs increase, even slightly, significant numbers of children lose coverage.

A number of factors have contributed to holding down the costs of this program. The TPA provides his services at a very modest cost. Kaiser reports that premiums do not quite cover the cost of providing services; they carry the program as a community service. Both current carriers are non-profit organizations. No commissions are included in the insurance premiums. (Lack of commissions could lead to opposition from insurance agents in some communities.)

Stephanie Ashburn, Office of Child Support, P.O. Box 944245, Sacramento, CA 94244-2450, 916-654-1210, fax 916-657-3791,e-mail: stephanie.ashburn@dss.ca.gov.

The primary goal of this initiative was to establish a streamlined process for filing, electronically imaging and providing access to completed paternity declarations to address the heavy volume of more than 120,000 paternity declarations being filed annually in California. The initial effort was focused upon eliminating a backlog of more than 80,000 unprocessed paternity declarations that had accumulated at the state vital statistics agency so this responsibility could be permanently transferred to the State Child Support agency. Another goal of this project is to ensure all paternity declarations are available to local child support agencies, parents and courts within 24 hours of receipt at the vendor.

he long-term goal is to establish a reliable database of filed paternity declarations as a foundation for introducing an online network system for statewide providers of the voluntary paternity process. The initiative has operated October 1, 1998 - Present

A private vendor for data imaging and database management services is a key partner. A statewide network of all birthing hospitals, county family support agencies and, local vital statistics agencies participate in the project.

This is a statewide project with all mandated paternity providers submitting completed paternity declarations to a central location.

The initial period of this initiative (October 1, 1998 through September 30, 1999) was funded by a Federal Child Support Special Improvement Project (SIP) Grant. The ongoing costs of the project are funded by the regular federal-state match at 93 cents per declaration.

States with a high volume of filed paternity declarations and a large number of participating hospitals and public agencies would be most likely to benefit from this project. Also, state agencies considering assuming responsibility from their vital statistics agencies for processing paternity declarations could benefit from this project.

Richard A. Williams, Chief, California Department of Social Services -- Office of Child Support/Program Assistance Bureau, P.O. Box 944245 Sacramento, CA 94244-2450 Phone: (916) 654-1549 E-mail: rwillia2@dss.ca.gov