It is enacted by the General Assembly as follows:

SECTION 1. Purpose -- to assure full federal participation in the Rhode Island medical assistance program administered by the Rhode Island department of human services pursuant to title 40, chapter 8 of the General Laws and title XIX of the Social Security Act [42 U.S.C. section 1396 ET seq.] by establishing states laws relating to medical child support and health insurance in full compliance with P.L. 103-66, section 13623 [42 U.S.C. section 1396 g-1]

SECTION 2. Title 27 of the General Laws entitled "Insurance" is hereby amended by adding thereto the following chapter:

{ADD 27-18.4-1. Definitions. -- ADD} {ADD (a) An "insurer" shall mean any health insurer (including a group health plan, as defined in section 607 (1) of the employee retirement income security act of 1974), a health maintenance organization as defined in section 27-41-2, a qualified health maintenance organization as referred to in section 42-62-9, a non-profit hospital service corporation as defined in section 27-19-1, a non-profit medical service corporation as defined in section 27-20-1, a non-profit dental service corporation as defined in section 27-20.1-1, a non-profit optometric service corporation as defined in section 27-20.2-1, a domestic insurance company subject to chapter 1 of title 27, and a foreign insurance company subject to chapter 2 of title 27. ADD}

{ADD (b) "Medical assistance" and "Medicaid" shall mean the Rhode Island medical assistance program administered by the department of human services pursuant to title 40, chapter 8 and title XIX of the Social Security Act [42 U.S.C. section 1396 et seq.]. ADD}

{ADD 27-18.4-2. Coordination of benefits with medical assistance -- Acquired rights to payments. -- ADD} {ADD (a) An insurer is prohibited from considering the availability or eligibility for medical assistance in this or any other state when considering eligibility for coverage or making payments under its plan for eligible enrollees, subscribers, policyholders or certificateholders. ADD}

{ADD (b) To the extent that payment for covered expenses has been made under the state Medicaid program for health care items or services furnished to an individual in any case where a third party, including an insurer, has a legal liability to make payments, the department of human services is considered to have acquired the rights of te individual to payment by any other party, including an insurer, for those health care items or services. These rights are further defined and are enforceable in accordance with section 40-6-9. ADD}

{ADD 27-18.4-3. Non-discrimination in enrollment -- Claims submission. -- ADD} {ADD (a) An insurer shall not deny enrollment of a child under any health plan of the child's parent on the grounds that: ADD}

{ADD (1) The child was born out of wedlock; ADD}

{ADD (2) The child is not claimed as a dependent on the parent's federal tax return; or ADD}

{ADD (3) The child does not reside with the parent or in the insurer's service area. ADD}

{ADD (b) Where a child has health coverage through an insurer of a noncustodial parent the insurer shall: ADD}

{ADD (1) Provide such information to the custodial parent as may be necessary for the child to obtain benefits through that coverage; ADD}

{ADD (2) Permit the custodial parent (or the provider, with the custodial parent's approval) to submit claims for covered services without the approval of the noncustodial parent; and ADD}

{ADD (3) Make payments on claims submitted in accordance with subsection (b) (2) directly to the custodial parent, the provider or the department of human services. ADD}

{ADD (c) Where a parent is required by a court or administrative order to provide health coverage for a child, and the parent is eligible for family health coverage, the insurer is required: ADD}

{ADD (1) To permit the parent to enroll, under the family coverage, a child who is otherwise eligible for the coverage without regard to any enrollment season restrictions; ADD}

{ADD (2) If the parent is enrolled but fails to make application to obtain coverage for the child, to enroll the child under family coverage upon upon application of the child's other parent, or the department of human services which administers the medicaid program and the child support enforcement program under 42 U.S.C. sections 651 to 669; and ADD}

{ADD (3) Not to disenroll (or eliminate coverage of) the child unless the insurer is provided satisfactory written evidence that: ADD}

{ADD (a) The court or administrative order is no longer in effect; or ADD}

{ADD (b) The child is or will be enrolled in comparable health coverage through another insurer which will take effect not later than the effective date of disenrollment. ADD}

{ADD (d) An insurer may not impose requirements on the department of human services, which has been assigned the rights of an individual eligible for medical assistance pursuant to section 40-6-9 and covered for health benefits from the insurer, that are different from requirements applicable to an agent or assignee of any other individual so covered. ADD}

{ADD 27-18.4-4. Employer obligations. -- ADD} {ADD Where a parent is required by a court or administrative order to provide health coverage, which is available through an employer doing business in this state, the employer is required: ADD}

{ADD (a) To permit the parent to enroll under family coverage any child who is otherwise eligible for coverage without regard to any enrollment season restrictions; ADD}

{ADD (b) If the parent is enrolled but fails to make application to obtain coverage of the child, to enroll the child under family coverage upon application by the child's other parent, or by the department of human services acting as the state medicaid and/or child support enforcement program; ADD}

{ADD (c) Not to disenroll (or eliminate coverage of) any such child unless the employer is provided satisfactory written evidence that: ADD}

{ADD (1) The court is no longer in effect; ADD}

{ADD (2) The child is or will be enrolled in comparable coverage which will take effect no later than the effective date of disenrollment; or ADD}

{ADD (3) The employer has eliminated family health coverage for all of its employees. ADD}

{ADD (d) To withhold from the employee's compensation the employee's share (if any) or premiums for health coverage and to pay this amount to the insurer. ADD}

{ADD 27-18.4-5. Rules and regulations. -- ADD} {ADD The director of business regulation may promulgate such rules and regulations as he or she shall deem necessary for the efficient administration of this chapter. ADD}

{ADD 27-18.4-6. Severability. -- ADD} {ADD If any provision of the chapter, or the application of a provision to any person or circumstances, shall be held invalid, the remainder of the chapter, and the application of the provision to persons or circumstances other than those as to which it is held invalid, shall not be affected thereby. ADD}

SECTION 3. Chapter 40-6 of the General Laws entitled "Public Assistance Act" is hereby amended by adding thereto the following section:

{ADD 40-6-21.2. Child medical support garnishment -- State income tax offset. -- ADD} {ADD (a) The department of human services may garnish the wages, salary or other income of, and withhold amounts from state income tax refunds due to, any person who: ADD}

{ADD (1) Is required by court or administrative order to provide coverage of the cost of health services to a child eligible for medical assistance under chapter 40-8 and title XIX of the Social Security Act [42 U.S.C. section 1396 et seq.]; and ADD}

{ADD (2) Has received payment from a third party for the costs of such service but has not used the payments to reimburse either the other parent or guardian of the child or the provider of the services, to the extent necessary to reimburse the department of human services for its costs, but claims for current and past due child support shall take priority over these claims. ADD}

{ADD (b) Garnishment proceedings may be commenced and enforced in the family court under title 15, chapters 5, 8, 9, 11, 13, 15, and 16. ADD}

{ADD (c) Withholding from state income tax refunds shall be enforced in accordance with chapter 30.1 of title 44. ADD}

SECTION 4. Section 44-30.1-1 of the General Laws in Chapter 44-30 entitled "Setoff of Refund of Personal Income Tax" is hereby amended to read as follows:

{ADD 44-30.1-1. Definitions. -- ADD} (a) "Claimant agency" means either,

(1) The department of human services, {DEL bureau of family support, DEL} with respect to past-due support which has been assigned to the department of human services by {ADD public assistance and medical assistance recipients or by ADD} the department for children and their families and with respect to past-due support which it is attempting to collect on behalf of any individual not eligible as a public assistance recipient.

(2)(i) The Rhode Island higher education assistance authority (RIHEAA) with respect to obligations owed to that agency or to the state of Rhode Island by reason of default or failure to pay student loans, health professions contract advances or scholarships or grant overawards or

(ii) The Rhode Island higher education assistance authority (RIHEAA), acting as agent for the United States department of education or other student loan guarantee agencies in other states which shall have negotiated a reciprocal arrangement with the Rhode Island higher education assistance authority for the setoff of refunds of personal income taxes against defaulted loan obligations.

(3) The Rhode Island court administrative office, with respect to court costs, fines, and restitution owed.

(b) "Debtor" means,

(1) any individual who owes past-due support which has been assigned to the department of human services {ADD by public assistance and medical assistance recipients or ADD} by the department for children and their families, or owes past-due support to any individual not eligible as a public assistance recipient and

(2) any individual who has obligations owed to RIHEAA, the state of Rhode Island, the United States department of education or such other states and agencies as have negotiated reciprocal agreements with RIHEAA,

(3) any individual who owes court costs or fines to the superior, family and district courts, and

(4) any individual who owes restitution to any victim of any offense which has been ordered by a judge of the district, family and superior courts pursuant to a disposition in a criminal case and which has been made payable through the administrative office of state courts pursuant to section 12-19-34 of the general laws.

(c) "Division" means the department of administration, division of taxation.

(d) "Past-due support" means the amount of court-ordered child support or maintenance {ADD , child medical support ADD} or a spousal support order for a custodial parent having custody of a minor child, which is overdue or otherwise in arrears, regardless of whether there is an outstanding judgment for that amount, and whether the order for the support or maintenance has been established by a court or by an administrative process authorized under the laws of any state.

(e) "Refund" means the Rhode Island income tax refund which the division determines to be due to a taxpayer.

(f) "Obligation owed" means the total amount owed by any individual on;

(1) Any guaranteed student loan or parent loan for undergraduate students for which RIHEAA has had to pay the guarantee, or for which RIHEAA is acting as agent on behalf of the United States department of education or other state cooperating agencies which have had to pay a guarantee,

(2) Any contract fee advanced by either RIHEAA or the state of Rhode Island on behalf of any individual participating in a health professions educational program for which payment has not been made according to the terms of the contract, and,

(3) Any amount of scholarship or grant funds which constitutes an overaward, whether due to error or to the submission of false information, and for which repayment has been demanded by the agency, but which has not been paid.

(g) "Court costs owed" means any amount which has been assessed pursuant to a criminal disposition by a judge of the district, family and superior courts (including but not limited to those amounts assessed pursuant to chapters 20 and 25 of title 12 of the Rhode Island general laws and those amounts assessed pursuant to title 31) which has not been paid and which has been declared delinquent by the administrative judge of the court making the assessment.

(h) "Restitution owed" means any amount which has been ordered paid pursuant to a criminal case disposition by a judge of the district, family and superior courts pursuant to chapter 19 of title 12 of the Rhode Island general laws, which has not been paid and which has been declared delinquent by the administrative judge of the court making the assessment.

(i) "Fines owed" means any amount which has been ordered paid as a penalty in a criminal case by a judge of the district, family and superior courts which has not been paid and which has been declared delinquent by the administrative judge of the court making the assessment.

SECTION 5. This act shall take effect upon passage.