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Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66)

DCL-93-36

Published: August 13, 1993
Information About:
State/Local Child Support Agencies
Topics:
Case Management, Paternity Establishment
Types:
Policy, Dear Colleague Letters (DCL), Statutes/Legislation

TO ALL STATE IV-D DIRECTORS

Dear Colleague:

This is to inform you of recently-enacted Federal legislation which will impact State IV-D programs. The Omnibus Budget Reconciliation Act of 1993 (P.L. 103-66), enacted into law on August 10, 1993, contains a key amendment to the paternity requirements under title IV-D of the Social Security Act (the Act) and several other provisions which will also impact the IV-D program. Attached is a copy of the text on the paternity provisions from the Congressional Record and the related conference report legislative history.

Section 13721 of P.L. 103-66 amends section 466(a) of the Act to require States to have laws and procedures for simple civil process for voluntary acknowledgment of paternity, which explains the rights and responsibilities of acknowledging paternity and includes due process safeguards. The procedures must include: (1) a hospital-based program for voluntary acknowledgment of paternity around the time of the child's birth; (2) that a voluntary acknowledgment creates a rebuttable, or, at the option of the State, a conclusive presumption of paternity, and that voluntary acknowledgment of paternity is admissible as evidence of paternity; (3) that voluntary paternity acknowledgment is recognized as a basis for seeking a support obligation without first requiring any further proceedings to establish paternity; (4) that any objections to genetic testing have to be made in writing within a specified number of days prior to any hearing at which the results of the testing may be introduced into evidence, and, if no objection is made, the test results are admissible as evidence of paternity without need for foundation testimony or other proof of authenticity or accuracy; (5) that genetic test results indicating a threshold probability of the alleged father being the father of the child create a rebuttable, or, at the option of the State, a conclusive presumption of paternity; (6) that default orders are required upon a showing of service of process, and whatever additional showing required by State law; and (7) that States must give full faith and credit to a determination of paternity made by another State, whether established through voluntary acknowledgment or through administrative or judicial processes.

Section 13721 also requires that States have expedited processes in effect in the State judicial system or under State

administrative processes for paternity establishment, as well as Page 2 - State IV-D Directors

for obtaining and enforcing support orders. Additionally, section 13721 revises the paternity establishment standard in section 452(g) of the Act.

The effective date of the paternity provisions of the law is October 1, 1993. However, if State laws are necessary to implement these provisions, the effective date is the date of enactment of the State law, but in no event any later than the first day of the first calendar quarter after the close of the first regular session of the State legislature that begins after the August 10, 1993, enactment of the Federal law. In States with two-year legislative sessions, each year would be deemed a separate regular session.

Several other provisions of P.L. 103-66 may impact on the IV-D program, especially in regard to medical support enforcement. These are:

þSection 4301 of P.L. 103-66 amends the Employee Retirement Income Security Act of 1974 (ERISA) regarding the treatment of certain medical support orders, to effectively eliminate the problems encountered with self-insured employers.

þSection 13581 of P.L. 103-66 amends title 11 of the Act by adding a new section 1144 that requires the Secretary of Health and Human Services to establish a Medicare and Medicaid Coverage Data Bank.

þSection 13623 of P.L. 103-66 amends title XIX of the Act to require States to have in effect laws to require insurers and employers to assist in the enforcement of medical child support orders. The effective date of these provisions of the law is April 1, 1994, with similar provision for later effective date if State legislation is necessary. Under the required State laws:

*Insurers will be required to not deny enrollment of a child under parent's health insurance coverage on the ground that the child was born out wedlock, is not claimed as a dependent on the parent's Federal income tax return, or does not reside with the parent or in the insurer's service area.

*Insurers will be required, where the parent is required by court or administrative order to provide health insurance coverage to the child, to: (1) allow that parent to enroll in family coverage and include the child in the enrollment, without regard to enrollment season restrictions; (2) where that parent is enrolled in family coverage, but fails to enroll the child, to allow the child's other parent, or the Medicaid or IV-D agency to apply for enrollment; and (3) prohibit

Page 3 - State IV-D Directors

disenrollment by the employee, or elimination of coverage of the child, unless the employee provides written proof that the order is no longer in effect or that the child has been enrolled or will be enrolled in comparable health insurance coverage, with the coverage to take effect no later than the effective date of disenrollment.

*Employers will be required to meet requirements similar to the requirements on insurers, plus to withhold the employee share (if any) of health insurance premiums from the employee's compensation, and to pay such premiums to the insurer. The restrictions on maximum amount of withholdings in the Consumer Credit Protection Act would apply.

*Insurers will be required to: (1) not impose any additional requirements for Medicaid agency different than requirements for other agents or assignees; and (2) provide the other parent enrollment information, and to process claims from and make payments to the other parent, or that parent's provider.

þSection 13623 of P.L. 103-66 also amends title XIX of the Act to require States to have in effect laws for garnishment of wages and withholding of State tax refund of obligor who provides health insurance coverage of child, and has received health insurance payment from the insurer, but has not used such payment to reimburse, as appropriate, either the other parent or the health care provider. The garnishment or withholding could be for up to the amount of Medicaid expenditures for the child. Child support obligations would take priority over these claims for medical costs.

þSection 13921 of P.L. 103-66 amends the Food Stamp Act of 1977 to require that legally ordered child support that is paid by a household member to a non-household member be deducted from the calculation of eligibility and amount of food stamps. The Secretary of Agriculture would be authorized to regulate the methods, including calculation on a retrospective basis, States shall use to determine the amount of the deduction for child support payments. This provision may be implemented no sooner than September 1, 1994, and no later than October 1, 1995.

We will be issuing a revised State plan page and legislative checklist based on the IV-D statutory provisions. In addition, we are drafting a Notice of Proposed Rulemaking (NPRM) for implementation of the paternity establishment provisions. We also will be offering our assistance and advice in drafting proposed and final regulations to the Health Care Financing

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Administration for provisions regarding medical support, the Food and Nutrition Service of the U.S. Department of Agriculture for food stamp provisions, and the U.S. Department of Labor for ERISA provisions.

We will monitor the implementation of these other provisions and

notify the Regional Offices and States when implementing regulations are proposed and finalized.

Sincerely,

Robert C. Harris

Acting Deputy Director

Office of Child Support Enforcement

enclosure

cc: Regional Administrators for Children and Families

Assistant Regional Administrators for Family Security

Program Managers for Child Support Enforcement

Regions I - X

From August 4, 1993 Congressional Record -- Page H5881

PART II - CHILD SUPPORT ENFORCEMENT

SEC. 13721. STATE PATERNITY ESTABLISHMENT PROGRAMS.

(a) PERFORMANCE STANDARDS. - Section 452(g) (42 U.S.C. 652 (g)) is amended -

(1) in paragraph (1) -

(A) by striking "1991" and inserting "1994";

(B) by inserting "is based on reliable data and" before "equals or exceeds";

(C) by inserting "(rounded to the nearest whole percentage point)" before "equals"; and

(D) by striking subparagraphs (A), (B), and (C) and inserting the following:

"(A) 75 percent"

"(B) for a State with a paternity establishment percentage of not less than 50 percent but less than 75 percent for such fiscal year, the paternity establishment percentage of the State for the immediately preceding fiscal year plus 3 percentage points;

"(C) for a State with a paternity establishment percentage of not less than 45 percent but less than 50 percent for such fiscal year, the paternity establishment percentage of the State for the immediately preceding fiscal year plus 4 percentage points;

"(D) for a State with a paternity establishment percentage of not less than 40 percent but less than 45 percent for such fiscal year, the paternity establishment percentage of the State for the immediately preceding fiscal year plus 5 percentage points; or

"(E) for a State with a paternity establishment percentage of less than 40 percent for such fiscal year, the paternity establishment percentage of the State for the immediately preceding fiscal year plus 6 percentage points."; and

(2) in paragraph (2) -

(A) in subparagraph (A) -

(i) by striking "(or under all such plans)" each place such term appears and inserting "or E";

(ii) in clause (i) by inserting "during the fiscal year" before the comma;

(iii) in clause (ii) -

(I) in subclause (I), by striking "for such" and inserting "as of the end of the"; and

(II) in subclause (II), by striking "for the" and inserting "as of the end of the";

(iv) in clause (iii) by inserting "or acknowledged during the fiscal year" before the comma; and

(v) in the matter following clause (iii) -

(I) by striking "have been" and inserting "were";

(II) by inserting "during the immediately preceding fiscal year" after "wedlock";

(III) by striking "is being" and inserting "was being";

(IV) by striking "for such" and inserting "as of the end of such preceding";

(V) by striking "are being" and inserting "were being"; and

(VI) by striking "for the" and inserting "as of the end of such preceding";

(B) by striking subparagraph (B) and inserting the following:

"(B) the term `reliable data' means the most recent data available which are found by the Secretary to be reliable for purposes of this section.";

(C) by inserting "unless paternity is established for such child" after "the death of a parent"; and

(D) by inserting "or any child with respect to whom the State agency administering the plan under part E determines (as provided in section 454(4)(B)) that it is against the best interests of such child to do so" after "cooperate under section 402(a)(26)."

(b) STATE PLAN REQUIREMENTS FOR THE ESTABLISHMENT OF PATERNITY. - Section 466(a)(42 U.S.C. 666(a)) is amended -

(1) in paragraph (2) -

(A) by striking "at the option of the State,"; and

(B) by inserting "or paternity establishment" after "support order issuance and enforcement";

(2) in paragraph (5), by adding at the end the following:

"(C) Procedures for a simple civil process for voluntarily acknowledging paternity under which the State must provide that the rights and responsibilities of acknowledging paternity are explained and ensure that due process safeguards are afforded. Such procedures must include a hospital-based program for the voluntary acknowledgment of paternity during the period immediately before or after the birth of a child.

"(D) Procedures under which the voluntary acknowledgment of paternity creates a rebuttable, or at the option of the State, conclusive presumption of paternity, and under which such voluntary acknowledgment is admissible as evidence of paternity.

"(E) Procedures under which the voluntary acknowledgment of paternity must be recognized as a basis for seeking a support order without requiring any further proceedings to establish paternity.

"(F) Procedures which provide that (i) any objection to genetic testing results must be made in writing within a specified number of days before any hearing at which such results may be introduced into evidence, and (ii) if no objection is made, the test results are admissible as evidence of paternity without the need for foundation testimony or other proof of authenticity or accuracy.

"(G) Procedures which create a rebuttable or, at the option of the State, conclusive presumption of paternity upon genetic testing results indicating a threshold probability that the alleged father is the father of the child.

"(H) Procedures requiring a default order to be entered in a paternity case upon a showing of service of process on the defendant and any additional showing required by State law."; and

(3) by inserting after paragraph (10) the following new paragraph:

"(11) Procedures under which a State must give full faith and credit to a determination of paternity made by any other State, whether established through voluntary acknowledgment or through administrative or judicial processes.".

(c) EFFECTIVE DATE. - The amendments made by this section shall become effective with respect to a State on the later of -

(1) October 1, 1993 or,

(2) the date of enactment by the legislature of such State of all laws required by such amendments, but in no event later than the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of enactment of this Act. For purposes of the previous sentence, in the case of a State that has a 2 year legislative session, each year of such session shall be deemed to be a separate regular session of the State legislature.

From August 4, 1993 Congressional Record -- Page H6018

CHILD SUPPORT ENFORCEMENT

1. State Paternity Establishment Programs (Sec. 13241 of House bill; Sec. 7602 of Senate amendment)

Present Law

The Child Support Enforcement Program was enacted as part of the Social Security Act in 1975. The States operate their own programs within Federal law and regulations. The Federal Government pays for 66 percent of the administrative costs. States are responsible for establishing paternity, locating absent parents, establishing child support orders, and enforcing child support. The Federal role includes monitoring and evaluating State programs, providing technical assistance, and in certain instances, helping States locate absent parents and collect child support payments. The Internal Revenue Service (IRS) collects some child support in arrears by offsetting income tax refunds otherwise due to taxpaying obligors.

Paternity Establishment Performance Standards--A State shall be found in compliance with Federal law if its paternity establishment percentage for fiscal years beginning on or after October 1, 1991 is at least (a) 50 percent; (b) the paternity establishment percentage of the State for fiscal year 1988, increased by 3 percentage points for each year after fiscal year 1989 and ending before the fiscal year for which the standard is to apply; or (c) the paternity establishment percentage determined with respect to all States for the fiscal year.

The term "paternity establishment percentage" for a State for a given fiscal year is the percent obtained by dividing the number of children in the State who are born out of wedlock, are receiving cash benefits or Title IV-D child support enforcement services, and for whom paternity has been established by the number of children who are born out of wedlock and are receiving cash benefits or IV-D child support services.

House Bill

Paternity Establishment Performance Standards.--A new paternity establishment standard would require that a State's paternity establishment percentage be based on the most recent data available which are found by the Secretary to be reliable, and must: (1) be 75 percent; or (2) have increased by 3 percentage points over the previous fiscal year for a State with a percentage between 50 and 75 percent, or by 6 percentage points over the previous fiscal year for a State with a percentage below 50 percent.

Additional Requirements.--The provision would require each State to have in effect laws requiring the use of additional procedures:

(1) for a simple civil process for voluntarily acknowledgingpaternity under which the State must explain the rights and responsibilities of acknowledging paternity and afford due process safeguards. Procedures must include: (A) a hospital- based program for the voluntary acknowledgment of paternity during the period immediately preceding or following the birth of a child; and (B) the inclusion of signature lines on applications for official birth certificates which, once signed by the father, and the mother, constitute a voluntary acknowledgment of paternity;

(2) under which the voluntary acknowledgment of paternity in the manner described in (1)(B) above creates a rebuttable, or at the option of the State, conclusive presumption of paternity, and under which such voluntary acknowledgments are admissible as evidence of paternity;

(3) under which the voluntary acknowledgment of paternity in the manner described in (1)(B) must be recognized as a basis for seeking a support order without first requiring any further proceedings to establish paternity;

(4) which provide that any objection to genetic testing results must be made in writing within a specified number of days prior to any hearing at which such results may be introduced in evidence and if no objection is made the test results are admissible as evidence of paternity without the need for foundation testimony or other proof of authenticity or accuracy;

(5) which create a rebuttable or, at the option of the State, conclusive presumption of paternity upon genetic testing results indicating a threshold probability of the alleged father being the father of the child; and

(6) which require default orders in paternity cases upon a showing that process has been served on the defendant and whatever additional showing may be required by State law;

(7) which require States to have expedited processes for paternity establishment in contested cases and to require that a State give full faith and credit to determinations of paternity made by other States.

The State plan requirements are further amended by requiring States to have in effect procedures under which, in the administration of any law involving the issuance, reissuance, or amendment of a birth certificate, the State must require each parent to furnish the social security number (SSN) to assist in identifying the parents of the child, unless the State (in accordance with regulations prescribed by the Secretary) finds good cause for not requiring the furnishing of the number. The SSN could not appear on the birth certificate, and the use of the SSN is restricted to child support purposes, unless the Privacy Act of 1974 does not prohibit the State from requiring the disclosure of the number.

Effective Date

The provisions would be effective on: (1) October 1, 1993, or (2) if later, upon enactment by the State legislature of all laws required by the provision, but in no event later than the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins afterenactment of this bill.

Senate Amendment

Same as House bill, except does not require that the voluntary acknowledgment be "in the manner described in (1)(B)," and does not require that the voluntary acknowledgment be "in the manner described in (1)(B)" and does not require the State procedures to acquire social security numbers in conjunction with issuing birth certificates.

Effective Date

Same as House bill.

Conference Agreement

The conference agreement follows the Senate amendment with technical changes in the paternity establishment percentage definition and standards.