SENATE BILL NO. 207 "An Act relating to the establishment and enforcement of medical support orders for children; and providing for an effective date." This was the first hearing for this bill in the Senate Finance Committee. BARBARA MIKLOS, Director, Division of Child Support Enforcement, Department of Revenue, testified via teleconference from Anchorage to tell the Committee that the division believed that it would help all parties, including those who are paid child support, those who pay child support and the agency. She stated that the bill would eliminate confusion. Ms. Miklos explained that under existing statutes, an order for medical support could only be established in conjunction with a financial support order. This bill, she stated changes the provision so that a medical support order might be established on its own. She stressed that this is important in the case of Medicaid recipients because the division is required to submit an order of medical support anytime a client goes on Medicaid. Current statue, she noted ties medical support together with financial support, thus requiring the division to submit the financial support order even if the parents did not want it. She elaborated that in these instances, the financial order is issued, but not enforced. However, she pointed out, the debt continues to accumulate and if the parent goes on public assistance, the division begins to collect on that debt. Under this bill, she said the debt would not accumulate. Ms. Miklos continued that the bill establishes a medical support statute to provide that either parent, not simply the obligor parent, may be required to provide health coverage. Currently, she detailed Alaska statute only places that responsibility on the obligor parent, although the courts have ruled in Civil Rule 90.3 that either parent could be responsible. She pointed out that this legislation makes the statute and the court order consistent. She noted that the division follows the civil rule and requires that either parent may have to provide health insurance. Ms. Miklos stated that the bill also amends the law to require that a medical support order be issued regardless of whether health care coverage is currently available. She explained this is a clarification to make the statute clear that the division can issue the order to require health care coverage be provided to the child if it becomes available to either parent. She said this is in place of waiting until the health care coverage is available before pursuing the matter. Senator Phillips asked what other states have this provision. Ms. Miklos answered that the division did a survey of all states and had 24 responses. Of those responses, she said 16 states could issue separate medical and financial orders and three states could not. In the five remaining states that responded, she said the court issues all these orders. Senator Phillips asked why the practice of only allowing the courts to issue medical and financial orders was not implemented in this legislation. Ms. Miklos responded that it is a simpler process and less costly for the division to establish child support orders. She pointed out that if the court issued the order, every change would require the parties to return to court. She added that most states allow the divisions to issue the orders. Senator Phillips remarked that the child support enforcement office was not the most popular of state agencies. Senator Green asked how the Denali KidCare program fit into this legislation. Ms. Miklos replied Denali KidCare is a Medicaid program and therefore requires a medical support order. Senator Phillips asked which states require the court to issue the orders. Ms. Miklos listed Washington D.C., Massachusetts, Louisiana, Virginia and Maryland. Most of the West Coast states, she noted have a provision to allow the agency to issue the orders Co-Chair Torgerson asked about the mechanics of the language contained on page 5 lines 5 through 8, "The hearing officer shall allocate equally the cost of the health care coverage between the parents unless the hearing officer finds good cause to order a different allocation of these costs." Ms. Miklos explained the appeals process, which begins with an administrative review by the division and then a review conducted by a hearing officer outside the division but within the Department of Revenue. She said the rulings are made based on which parent has health insurance available at a reasonable cost. Co-Chair Torgerson asked if currently, the courts normally determine which parent is the obligor for the health insurance coverage. Ms. Miklos replied that it depended upon who established the order. If the courts issued the order, she said the court would use the same procedure to make the determination. She qualified that the hearing officer is involved only when the order was issued by the agency. In both cases, she stressed appeals could be made to the court. Co-Chair Torgerson then wanted to know how the financial obligor was established. Ms. Miklos answered that it usually depended upon which parent has custody of the child, or in cases of joint custody, which parent has the greater income. She stated that the obligator is usually determined strictly by financial circumstances. By allowing the division to issue medical support orders separately from financial support orders, the decision of medical obligator could be determined based on which parent has reasonable health care coverage. Ms. Miklos stressed that the state benefits from the children having independent health care insurance, because there is less need for public assistance. Senator Adams offered a motion to report from Committee, SB 207 with accompanying zero fiscal note from the Department of Revenue. Senator Phillips objected. He stated that he would rather the courts made the decision on the support orders. Senator Green asked if there were any instances where both parents are required to carry health care insurance on a child. Ms. Miklos responded the parents are not being required to have health care coverage unless it is available at a reasonable cost. She added that in some cases, insurance may not be available at all. Ms. Miklos then commented on Senator Phillips's concerns saying that this legislation does not change how the courts or the division determines the support orders other than to separate the two orders. This bill, she stressed does not give any more power to the child support enforcement agency. A roll call was taken on the motion. IN FAVOR: Senator Green, Senator Donley, Senator Leman, Senator Adams, Senator Wilken, Senator P. Kelly, Co-Chair Parnell and Co-Chair Torgerson OPPOSED: Senator Phillips The motion PASSED (8-1) The bill MOVED from Committee. AT EASE 9:25 AM / 9:37 AM