GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	1 

HOUSE BILL 164

Short Title:  Collect Child Support 2.	(Public)

─────────────────────────────────────── 
Sponsors: Representatives Gardner; Cansler and Nichols.

─────────────────────────────────────── 
Referred to:  Judiciary II, if favorable, Finance.

─────────────────────────────────────── 

February 13, 1995

A BILL TO BE ENTITLED
AN ACT TO ENHANCE CHILD SUPPORT COLLECTION THROUGH EMPLOYER REPORTING OF NEW HIRES, HEALTH INSURANCE PREMIUM WITHHOLDING, AND OTHER INITIATIVES FOR COLLECTING OVERDUE CHILD SUPPORT.
The General Assembly of North Carolina enacts:
Section 1. Effective October 1, 1995, Chapter 110 of the General Statutes is amended by adding the following new section to read:
"§ 110-142.  Duty of employers to report hiring or rehiring of persons.
(a)	Every employer with five or more employees doing business in this State shall report to the Child Support Enforcement Program of the Department the following information:
(1)	The hiring of any person who resides or works in this State to whom the employer anticipates paying earnings; and
(2)	The hiring or return to work of any employee who was laid off, furloughed, separated, granted leave without pay, or terminated from employment.
(b)	Employers are not required to report the hiring of any person who:
(1)	Will be employed sporadically so that the employee will be paid for less than 350 hours during a continuous four-month period; or
(2)	Will have gross earnings from the employer of less than three hundred dollars ($300.00) in every month.
(c)	Employers may report the information by mailing the employee's copy of the W-4 form or by other means mutually agreed to by the Secretary and the employer that will result in timely reporting.  Employers shall submit reports within seven days of the hiring, rehiring, or return to work of the employee.  The report shall contain:
(1)	The employee's name, address, social security number, and date of birth; and
(2)	The employer's name, address, and employment security number or unified business identifier number.
The Secretary may adopt rules to establish additional exceptions if needed to reduce unnecessary or burdensome reporting.
(d)	The Program shall retain the information on a particular employee only if the Program is responsible for establishing, enforcing, or collecting a support obligation or debt of that employee.  If the employee does not owe such an obligation or a debt, the Program shall not create a record regarding the employee and the information contained in the notice from the employer shall be promptly destroyed."
Sec. 2.  Effective October 1, 1995, Chapter 110 of the General Statutes is amended by adding the following new section to read:
"§ 110-143. Health insurance withholding order.
(a)	Issuance.  The Department on its own behalf, on behalf of a custodial parent who applies for the Department's support enforcement services, or on behalf of another state's Title IV-D agency, may issue to a responsible parent's employer or other payor of income a health insurance withholding order to enforce the responsible parent's obligation to obtain or maintain health insurance coverage or other health care services for the responsible parent's child or children.  A health insurance withholding order must be accompanied by:
(1)	An employer notice of the order; and
(2)	A sworn statement issued by the Secretary or the Secretary's representative stating that the responsible parent is required by a court order or duly acknowledged agreement of support to obtain or maintain health insurance coverage or other health care services for the dependent child or children named in the health insurance withholding order and has failed to provide the Department with proof of coverage required.
(b)	Employer notice.  A health insurance withholding order issued to an employer shall contain notice of the employer's rights and obligations under this section.
(c)	Duty to enroll.  An employer or other payor of income served with a health insurance withholding order shall enroll the employee's dependent child or children named in the order as covered persons in a group health insurance plan or other similar plan providing health care services or coverage offered by the employer, if the children are eligible for the coverage under the employer's enrollment provisions, and shall deduct any required premiums from the employee's earnings to pay for the insurance.
(d)	Choice of plan.  If more than one plan is offered by the employer, the employer shall enroll qualified children prospectively in the insurance plan in which the employee is enrolled or, if the employee is not enrolled, in the least costly plan otherwise available, provided that the plan's services are available where the children reside.  If the services of the employee's plan or the least costly plan are not available where the children reside, the employer shall  enroll qualified children prospectively in the least costly plan that is available where the children reside.
(e)	Employer's answer.  An employer shall respond to a health insurance withholding order in writing within 30 days of service on the employer.  The employer shall advise the Department of the plan in which the children are enrolled or, if the children are ineligible for any plan through the employer.  The Department shall include a printed answer form for the employer's use and shall include a form and a prepaid self-addressed envelope with the health insurance withholding order.
(f)	Mistake of fact; affirmative defenses.  A responsible parent may claim a mistake of fact or assert affirmative defenses to contest the issuance of a health insurance withholding order.  The Department shall adopt rules for reviewing claims of mistake of fact and investigating affirmative defenses.
(g)	Duration of order.  A health insurance withholding order shall remain in effect until:
(1)	The responsible parent's employment is terminated; or
(2)	The employer or other payor of earning is released from the order in writing by the Department or release is ordered by a court of competent jurisdiction.
(h)	Change of plan.  After it is initially determined in response to a health insurance withholding order that a child is eligible for coverage, the employer must make subsequent enrollment changes to include the child if the group health insurance plan is changed, and shall notify the Department of the changes in coverage.
(i)	Fee.  An employer may charge the employee a processing fee not to exceed one dollar ($1.00) for each withholding and for each change in plan.
(j)	Failure to comply.  Wilfull failure of an employer or other payor of earnings to comply with the requirements of a health insurance withholding order is a civil violation for which the Department may recover a civil penalty of up to one thousand dollars ($1,000) in a civil action.  Prior to bringing an action to recover the penalty authorized under this subsection, the Department shall notify the employer by certified mail, return receipt requested, that if the employer has not complied within 20 days of receipt of the notice an action will be brought to recover the penalty.
(k)	Priority of order.  A health insurance withholding order has priority over any previously filed attachment, execution, garnishment, or assignment of wages that is not for the purpose of enforcing or paying a child support obligation.
(l)	Employer protected.  The Department shall defend and hold harmless any employer or other payor of earnings who honors a health insurance withholding order.
(m)	Immunity.  An employer may not be held liable for medical expenses incurred on behalf of a dependent child or children because of the employer's failure to enroll the dependent child or children in a health insurance or health care plan after being ordered to do so by the Department.
(n)	Employee protected.  An employer who discharges, refuses to employ, or takes disciplinary action against a responsible parent, or who otherwise discriminates against that parent because of the existence of a health insurance withholding order or because of the obligation the order imposes upon the employer, is subject to a civil penalty of not more than five thousand dollars ($5,000) payable to the State, to be recovered in a civil action.  The employer shall also be subject to an action by the responsible parent for compensatory and punitive damages, plus attorneys' fees and court costs.
(o)	Service of process.  A health insurance withholding order must be served on the responsible parent's employer or other payor of earnings.  Service may be by certified mail, return receipt requested, by an authorized representative of the Department, or in accordance with G.S. 1A-1, Rule 4, of the Rules of Civil Procedure.  The Department shall send a copy of the health insurance withholding order to the responsible parent at the responsible parent's most recent address of record.
(p)	Rules.  The Department shall adopt rules to implement this section."
Sec. 3.  This act is effective upon ratification.