SB 366: "An Act relating to medical support for children; allowing a member of the teachers' retirement system or the public employees' retirement system to assign to a Medicaid-qualifying trust the member's right to receive a monetary benefit from the system; relating to the effect of a Medicaid-qualifying trust on the eligibility of a person for Medicaid; relating to the recovery of certain Medicaid payments from estates and trusts; requiring persons who receive Medicaid services to be liable for sharing in the cost of those services to the extent allowed under federal law and regulations; and providing for an effective date."
00SENATE BILL NO. 366 01 "An Act relating to medical support for children; allowing a member of the 02 teachers' retirement system or the public employees' retirement system to assign 03 to a Medicaid-qualifying trust the member's right to receive a monetary benefit 04 from the system; relating to the effect of a Medicaid-qualifying trust on the 05 eligibility of a person for Medicaid; relating to the recovery of certain Medicaid 06 payments from estates and trusts; requiring persons who receive Medicaid services 07 to be liable for sharing in the cost of those services to the extent allowed under 08 federal law and regulations; and providing for an effective date." 09 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 10 * Section 1. PURPOSES. The purposes of this Act are to 11 (1) bring the state into compliance with federal law with respect to the recovery of 12 Medicaid payments from the estates and trusts of individuals under certain circumstances and 13 with respect to the establishment of medical support orders for children; 14 (2) allow diversion of certain employee pension payments into Medicaid-qualifying
01 trusts if the trusts provide that Medicaid payments made on behalf of the individual may be 02 recovered from the trust after the individual's death. 03 * Sec. 2. AS 14.25.200(a) is amended to read: 04 (a) Except as provided in AS 29.45.030(a)(1), member contributions and other 05 amounts held in the system on behalf of a member or other person who is or may 06 become eligible for benefits under the system are exempt from Alaska state and 07 municipal taxes and are not subject to anticipation, alienation, sale, transfer, 08 assignment, pledge, encumbrance, or charge of any kind, either voluntary or 09 involuntary, before they are received by the person entitled to the amount under the 10 terms of the system, and any attempt to anticipate, alienate, sell, transfer, assign, 11 pledge, encumber, charge, or otherwise dispose of any right to amounts accrued in the 12 system is void. However, a member's right to receive benefits may be assigned 13 (1) under a qualified domestic relations order; or 14 (2) to a trust or similar legal device that meets the requirements for 15 a Medicaid-qualifying trust under AS 47.07.020(f) and 42 U.S.C. 1396p(d)(4). 16 * Sec. 3. AS 21.36 is amended by adding a new section to read: 17 Sec. 21.36.095. COVERAGE OF CHILDREN. (a) An insurer may not deny 18 enrollment of a child under the health care insurance of the child's parent on the 19 ground that the child 20 (1) was born out of wedlock; 21 (2) is not claimed as a dependent on the parent's federal income tax 22 return; 23 (3) does not reside with the parent; or 24 (4) does not reside in the insurer's service area. 25 (b) If a parent is required under AS 25.27.020(a)(9) or 25.27.060(c) to provide 26 medical support for a child and the parent is eligible for family health coverage 27 through an insurer, the parent's insurer 28 (1) shall allow the parent to enroll the child under the family coverage 29 without regard to restrictions relating to enrollment periods if the child is otherwise 30 eligible; 31 (2) shall, if the parent fails to apply for enrollment of a child under (1)
01 of this subsection, enroll the child under the parent's family coverage upon application 02 by the child's other parent or custodian, the child support enforcement agency, or the 03 Department of Health and Social Services; and 04 (3) may not disenroll or eliminate coverage of the child unless the 05 insurer has received written evidence that 06 (A) the parent with the insurance coverage is no longer required 07 by court order or administrative order to provide the child's medical support; 08 or 09 (B) the child is or will be enrolled in comparable health 10 coverage through another insurer that will take effect not later than the 11 effective date of the disenrollment or elimination of coverage. 12 (c) An insurer who provides health coverage of a child through family health 13 coverage of a parent who does not have sole physical custody of the child shall 14 (1) provide to the child's other parent or custodian the information that 15 may be necessary for the child to obtain benefits through the family health coverage; 16 (2) allow the child's other parent or custodian, or the child's health care 17 provider with the parent's or custodian's approval, to submit claims for covered 18 services without the approval of the parent whose insurance covers the child; and 19 (3) make payment on claims submitted under (2) of this subsection 20 directly to the child's other parent or custodian, the health care provider, or a state 21 agency to which the child's medical support rights have been assigned under 22 AS 25.27.120 or AS 47.07.025. 23 (d) If an individual is covered for health benefits from an insurer, the insurer 24 may not impose requirements on a state agency to which the rights of the individual 25 under AS 25.27.120 or AS 47.07.025 have been assigned that are different from 26 requirements applicable to an agent or assignee of other individuals covered by the 27 insurer. 28 (e) In this section, "insurer" includes 29 (1) an insurer, as defined in AS 21.90.900; 30 (2) a group health plan, as defined in 29 U.S.C. 1167(l) (Employee 31 Retirement Income Security Act of 1974);
01 (3) a health maintenance organization, hospital service corporation, or 02 medical service corporation, as defined in AS 21.87.330; 03 (4) a writing carrier, as defined in AS 21.55.500; and 04 (5) an entity offering a service benefit plan, as referred to in 42 U.S.C. 05 1396g. 06 * Sec. 4. AS 25.27.020(a) is amended to read: 07 (a) The agency shall 08 (1) seek enforcement of child support orders of the superior courts of 09 the state in other jurisdictions and shall obtain, enforce, and administer the orders in 10 this state; 11 (2) adopt regulations to carry out the purposes of this chapter, including 12 regulations that establish 13 (A) schedules for determining the amount an obligor is liable 14 to contribute toward the support of an obligee under this chapter and under 42 15 U.S.C. 651 - 669 (Title IV-D, Social Security Act); 16 (B) procedures for hearings conducted under AS 25.27.170; and 17 (C) subject to AS 25.27.025 and to federal law, a uniform rate 18 of interest on arrearages of support that shall be charged the obligor upon 19 notice if child support payments are 10 or more days overdue or if payment is 20 made by a check backed by insufficient funds; however, an obligor may not be 21 charged interest on late payment of a child support obligation, other than a 22 payment on arrearages, if the obligor is 23 (i) employed and income is being withheld from the 24 obligor's wages under an income withholding order; 25 (ii) receiving unemployment compensation and child 26 support obligations are being withheld from the obligor's unemployment 27 payments under AS 23.20.401; or 28 (iii) receiving compensation for disabilities under 29 AS 23.30 and child support obligations are being withheld from the 30 obligor's compensation payments; 31 (3) administer and enforce AS 25.25 (Uniform Reciprocal Enforcement
01 of Support Act); 02 (4) establish, enforce, and administer child support obligations 03 administratively under this chapter; 04 (5) administer the state plan required under 42 U.S.C. 651 - 669 (Title 05 IV-D, Social Security Act) as amended; 06 (6) disburse support payments collected by the agency to the obligee, 07 together with interest charged under (2)(C) of this subsection; 08 (7) establish and enforce administratively under this chapter, or through 09 the superior courts of the state, child support orders from other jurisdictions pertaining 10 to obligors within the state; 11 (8) enforce and administer spousal support orders if a spousal support 12 obligation has been established with respect to the spouse and if the support obligation 13 established with respect to the child of that spouse is also being administered; [AND] 14 (9) obtain a medical support order as part of a child support order if 15 health care coverage is available to the obligor at a reasonable cost; the medical 16 support order must meet the requirements of AS 25.27.063; and 17 (10) act on behalf of the Department of Health and Social Services 18 in the enforcement of AS 47.07.025(b). 19 * Sec. 5. AS 25.27.060(c) is amended to read: 20 (c) In a court proceeding where the support of a minor child is at issue, the 21 court may order either or both parents to pay the amount necessary for support, 22 maintenance, nurture, and education of the child. The court shall issue a medical 23 support order as part of a child support order if health care coverage is available to the 24 obligor at a reasonable cost. The medical support order must meet the 25 requirements of AS 25.27.063. Upon a showing of good cause the court may order 26 the parents required to pay support to give reasonable security for payments. 27 * Sec. 6. AS 25.27.062(i) is amended to read: 28 (i) An employer shall, to the extent permitted under 15 U.S.C. 1673(b), 29 withhold the current support obligation from an obligor's wages, including the 30 obligor's share, if any, of the premium for health coverage required to be 31 withheld under AS 25.27.063(c)(4). An employer shall withhold additional income,
01 to the extent permitted under 15 U.S.C. 1673(b), from an obligor's wages for any 02 support arrearage. 03 * Sec. 7. AS 25.27 is amended by adding a new section to read: 04 Sec. 25.27.063. MEDICAL SUPPORT ORDER. (a) A medical support order 05 issued under AS 25.27.020(a)(9) or 25.27.060(c) must require that the obligor provide 06 health care coverage for the child to whom the duty of support is owed. 07 (b) If an obligor who is required to provide health care coverage under a 08 medical support order is eligible for family health coverage through an employer doing 09 business in the state, the court or agency issuing the medical support order shall send 10 a copy of the medical support order to the employer. 11 (c) An employer who receives a copy of a medical support order under (b) of 12 this section 13 (1) shall allow the employee named in the order to enroll the child 14 under the family coverage without regard to restrictions relating to enrollment periods 15 if the child is otherwise eligible and is not already enrolled under the family coverage; 16 (2) shall, if the employee fails to apply for enrollment of a child under 17 (1) of this subsection, enroll the child under the employee's family coverage upon 18 application by the child's other parent or custodian, the child support enforcement 19 agency, or the Department of Health and Social Services; 20 (3) may not disenroll or eliminate coverage of the child while the 21 employee is still employed by the employer unless the employer has eliminated family 22 health coverage for all of its employees or has received written evidence that 23 (A) the employee is no longer required by court order or 24 administrative order to provide the child's insurance coverage; or 25 (B) the child is or will be enrolled in comparable health 26 coverage through another insurer that will take effect not later than the 27 effective date of the disenrollment or elimination of coverage; and 28 (4) shall withhold from the employee's compensation the employee's 29 share, if any, of premiums for health coverage to the extent permitted under 15 U.S.C. 30 1673(b) (Consumer Credit Protection Act) and pay the withheld amount to the 31 appropriate insurer; if federal regulations allow the employer to withhold less than the
01 employee's share of the insurance premium, the employer may withhold the lesser 02 amount and pay it to the appropriate insurer. 03 * Sec. 8. AS 25.27.065(b) is amended to read: 04 (b) When the right to receive child support has been assigned to a 05 governmental entity, an agreement under (a) of this section that has not been adopted 06 as an administrative order of the agency is not effective during a period when the 07 obligee is receiving [PUBLIC] assistance under AS 47.07 or AS 47.25.310 - 08 47.25.420. 09 * Sec. 9. AS 25.27.120(a) is amended to read: 10 (a) An obligor is liable to the state in the amount of assistance granted under 11 AS 47.07 and AS 47.25.310 - 47.25.420 to a child to whom the obligor owes a duty 12 of support except that, if a support order has been entered, the liability of the obligor 13 for assistance granted under AS 47.25.310 - 47.25.420 may not exceed the amount 14 of support provided for in the support order, and, if a medical order of support has 15 been entered, the liability of the obligor for assistance granted under AS 47.07 16 may not exceed the amount of support provided for in the medical order of 17 support. 18 * Sec. 10. AS 25.27.120(d) is amended to read: 19 (d) If the agency fails to comply with (c) of this section, interest does not 20 accrue on the liability to the state unless a support order or medical support order, 21 as applicable, has been entered. 22 * Sec. 11. AS 25.27.130(b) is amended to read: 23 (b) To establish or enforce an order of support, including, if applicable, a 24 medical support order, based on the subrogation of the state, the agency is not 25 limited to the amount of assistance being granted to the child. 26 * Sec. 12. AS 25.27.130(c) is amended to read: 27 (c) The recovery of any amount for which the obligor is liable that exceeds the 28 total assistance granted under AS 47.07 and AS 47.25.310 - 47.25.420 shall be paid 29 to the obligee. 30 * Sec. 13. AS 25.27.130(d) is amended to read: 31 (d) Except as provided in (f) of this section, if the obligee is not receiving
01 assistance under AS 47.07 or AS 47.25.310 - 47.25.420 at the time the state recovers 02 money in an action under this section, the recovery of any amount for which the 03 obligor is liable shall be distributed to the obligee for support payments, including 04 medical support payments, that have become due and unpaid since the termination 05 of assistance under AS 47.07 or AS 47.25.310 - 47.25.420 under a support order in 06 favor of the obligee. 07 * Sec. 14. AS 25.27.130(e) is amended to read: 08 (e) After payment to the obligee under (d) of this section, the state may retain 09 an amount not to exceed the total unreimbursed assistance paid on behalf of the 10 obligee under AS 47.07 or AS 47.25.310 - 47.25.420. 11 * Sec. 15. AS 25.27.130(f) is amended to read: 12 (f) Notwithstanding (d) of this section, the state shall, if required under federal 13 law or regulations, distribute amounts recovered through offset of the obligor's federal 14 tax refund as past due support with first distribution to the state for unpaid support 15 assigned to the state under AS 47.07.025 and AS 47.25.345. 16 * Sec. 16. AS 39.35.500 is amended to read: 17 Sec. 39.35.500. SAFEGUARD OF EMPLOYEE FUNDS HELD BY THE 18 SYSTEM. Except as provided in AS 29.45.030(a)(1), employee contributions and 19 other amounts held in the system are exempt from Alaska state and local taxes. 20 Amounts held on behalf of, or payable to, any employee or other person who is or 21 may become eligible for benefits under the system are not subject to anticipation, 22 alienation, sale, transfer, assignment, pledge, encumbrance, or charge of any kind, 23 either voluntary or involuntary, before being received by the person entitled to the 24 amount under the terms of the system. An attempt to anticipate, alienate, sell, transfer, 25 assign, pledge, encumber, charge, or otherwise dispose of a right to amounts held 26 under the system is void. However, an employee's right to receive benefits may be 27 assigned 28 (1) under a qualified domestic relations order; or 29 (2) to a trust or similar legal device that meets the requirements for 30 a Medicaid-qualifying trust under AS 47.07.020(f) and 42 U.S.C. 1396p(d)(4). 31 * Sec. 17. AS 47.07.020 is amended by adding new subsections to read:
01 (f) A person may not be denied eligibility for medical assistance under this 02 chapter on the basis of a diversion of income into a Medicaid-qualifying trust that, 03 according to a determination made by the department, 04 (1) has provisions that require that the state will receive all of the trust 05 assets remaining at the death of the individual, subject to a maximum amount that 06 equals the total medical assistance paid on behalf of the individual; and 07 (2) otherwise meets the requirements of 42 U.S.C. 1396p(d)(4). 08 (g) A person's eligibility for medical assistance under this chapter may not be 09 denied or delayed on the basis of a transfer of assets for less than fair market value 10 if the person establishes to the satisfaction of the department that the denial or delay 11 would work an undue hardship on the person as determined on the basis of criteria in 12 applicable federal regulations. 13 * Sec. 18. AS 47.07 is amended by adding a new section to read: 14 Sec. 47.07.025. ASSIGNMENT OF MEDICAL SUPPORT RIGHTS. (a) An 15 applicant for or recipient of assistance under this chapter is considered to have 16 assigned to the state, through the department and the child support enforcement 17 agency, all rights to accrued and continuing medical support that the applicant and 18 other persons for whom assistance is sought may have from all sources. The 19 assignment takes effect upon a determination that the applicant is eligible for assistance 20 under this chapter. Except with respect to the amount of any unpaid medical support 21 obligation accrued under the assignment, the assignment under this section terminates 22 when the applicant ceases to receive assistance under this chapter. 23 (b) Through the child support enforcement agency or on its own behalf, the 24 department may garnish the wages, salary, or other employment income of a person 25 who 26 (1) is required by a medical support order under AS 25.27.063 to 27 provide coverage of the costs of medical care to a child who is eligible for medical 28 assistance under this chapter; 29 (2) has received payment from a third party for the costs of the 30 services; and 31 (3) has not used the payments to reimburse, as appropriate, the other
01 parent or custodian of the child, the provider of the services, or the department. 02 (c) Garnishment under (b) of this section is limited to the amount necessary 03 to reimburse the department for expenditures for the child under this chapter. Claims 04 for current support or support arrearages take priority over claims under this section. 05 * Sec. 19. AS 47.07 is amended by adding a new section to read: 06 Sec. 47.07.042. RECIPIENT COST-SHARING. The state plan developed 07 under AS 47.07.040 shall impose deductible, coinsurance, and copayment requirements 08 or similar charges on persons eligible for assistance under this chapter to the maximum 09 extent allowed under federal law and regulations. The plan must provide that health 10 care providers shall collect the allowable charge. The department shall reduce 11 payments to each provider by the amount of the allowable charge. A provider may 12 not deny services because a recipient is unable to share costs, but an inability to share 13 costs imposed under this section does not relieve the recipient of liability for the costs. 14 * Sec. 20. AS 47.07 is amended by adding a new section to read: 15 Sec. 47.07.055. RECOVERY OF MEDICAL ASSISTANCE FROM 16 ESTATES. (a) The estate of an individual who received medical assistance payments 17 is subject to a claim for recovery of the medical assistance after the individual's death 18 that, except as provided in (b) of this section, may be secured by a lien filed against 19 the individual's real property during the individual's lifetime if the 20 (1) individual was an inpatient in a nursing facility, intermediate care 21 facility for the mentally retarded, or other medical institution; 22 (2) department required the individual, as a condition of receiving 23 medical assistance under this chapter, to spend for medical expenses all but a minimal 24 amount of that individual's income; and 25 (3) department determined during the individual's lifetime, after notice 26 and opportunity for hearing, that the individual could not reasonably be expected to 27 be discharged from the institution and to return home. 28 (b) A lien may not be filed under (a) of this section against an individual's 29 home if the home is lawfully occupied by the individual's 30 (1) spouse; 31 (2) child under age 21;
01 (3) blind or disabled child as described in AS 47.25.615(3) or (5) or 02 42 U.S.C. 1382(c); or 03 (4) sibling, if the sibling has an equity interest in the home and was 04 residing in the home for at least one year before the date of the individual's admission 05 to the institution. 06 (c) The state may not recover the costs of medical assistance under a lien on 07 a home under (a) of this section until after the death of the individual's surviving 08 spouse, if any, and only at a time when neither of the following is lawfully residing 09 in the home: 10 (1) a sibling of the individual who was residing in the individual's 11 home for a period of at least one year immediately preceding the date of the 12 individual's institutionalization and who has continuously resided in the home since 13 the institutionalization began; or 14 (2) a son or daughter of the individual who 15 (A) resided in the home for at least two years immediately 16 preceding the date of the individual's institutionalization; 17 (B) has continuously resided in the home since the 18 institutionalization began; and 19 (C) establishes to the department's satisfaction that the son or 20 daughter provided care to the individual that allowed the individual to reside 21 in the home rather than in an institution. 22 (d) A lien and claim authorized under (a) of this section are extinguished if, 23 during the individual's lifetime, the individual is discharged from the institution and 24 returns home. However, a new lien and claim are authorized for subsequent expenses 25 if the circumstances described in (a) of this section occur after the individual returns 26 home. 27 (e) In addition to recovery of medical assistance upon sale of property subject 28 to a lien authorized under (a) - (d) of this section, after an individual's death, the 29 individual's estate is subject to a claim for reimbursement for medical assistance 30 payments made on behalf of the individual under this chapter for the following 31 services to the extent that those services were provided when the individual was 55
01 years of age or older: 02 (1) services received while an inpatient in a nursing facility, 03 intermediate care facility for the mentally retarded, or other medical institutions; and 04 (2) home and community-based services provided through a waiver 05 received from the federal government that allows home and community-based services 06 to be covered under this chapter for persons who are eligible for coverage under this 07 chapter while in an institution but who are able to avoid institutionalization because 08 of the provision of home and community-based services. 09 (f) Other than a recovery upon sale of a home, a claim under this section may 10 be made only after the death of the individual's surviving spouse, if any, and only at 11 a time when the individual has no surviving child under age 21 and no surviving child 12 who is blind or totally and permanently disabled. 13 (g) For purposes of AS 13.16.470, the claims authorized under this section are 14 debts with preference under the laws of the state. 15 * Sec. 21. APPLICABILITY. The charges provided for under sec. 19 of this Act apply 16 to services performed on or after July 1, 1994. 17 * Sec. 22. This Act takes effect July 1, 1994.