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New Hire Reporting
National Medical Support Notice
Income Withholding
New Hire Reporting
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Q1. |
How is new hire information used?
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A1. |
States match New Hire Reports against their child support records to locate
parents, establish a support order or enforce an existing order. This
information is also fed into a National Directory of New Hires to provide more
current information for locating out-of-state non-custodial parents. Each state
has access to this directory so up-to-date information is available regardless
of where the parent is located. Nearly one-third of child support cases involve
parents who do not live in the same state as their children. |
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Q2. |
Why not just use the information on the quarterly wage reporting?
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A2. |
Quicker notification is needed to enable child support officials to locate
individuals and enforce child support orders. New hire reporting provides
up-to-date employment information that can be used to collect child support
from individuals who move from job to job. Quarterly data is often out of date
before the child support office receives the information. There can be as much
as a six-month lag between the time the data is submitted and when it is
available to child support officials. Since the data will be significantly more
current under New Hire Reporting, non-custodial parents can be located more
quickly, allowing child support orders to be established and/or enforced more
quickly.
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| Q3. |
Which employers need to report new employees under the New Hire
Reporting Program?
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A3. |
All employers, including private firms, unions, nonprofit and religious
organizations, and government agencies, must report all new employees.
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| Q4. |
Which employees must an employer report?
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A4. |
The rule of thumb is that employers must report all new employees who are
required to fill out federal W-4 wage withholding forms. This includes
employees who are full time, part time, seasonal, temporary, or rehired after a
separation of 180 days or more and student workers.
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| Q5. |
Does an employer need to report employees who return from leave or
who are rehired after layoff?
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| A5. |
Yes. The employer must submit a report if an employee is reinstated after any
lapse of pay of 180 days or more. However, if the employee remains on the
payroll while away from the job, the employer need not submit a report when the
employee returns to work.
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| Q6. |
Do New Hire Reports need to be submitted for independent contractors
and subcontractors?
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A6. |
The business/organization must first determine whether there is an
employer/employee relationship. If the relationship meets the Internal Revenue
Service test for an independent contractor relationship, the
business/organization is not required to report. In this case, contractors are
responsible for reporting their employees.
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| Q7. |
What about temporary or seasonal employees?
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| A7. |
Employers are required to report temporary and seasonal employees. One
exception, however, is employees who are sent to the job site by a temporary
employment agency. In these situations, it is the responsibility of the
temporary agency, not the business in which he or she is working, to report the
individual.
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| Q8. |
Must temporary employment agencies report each individual placed by
their agency?
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| A8. |
If the agency is paying wages to the individual, the agency must submit a New
Hire Report. The agency needs to report the individual only once, except when
there is a break in service with the agency of 180 days or more. If the agency
simply refers an individual for employment and does not pay a salary, the
agency does not need to file a New Hire Report. However, the employer who
actually hires and pays the individual, whether on a part time or full-time
basis, is required to report the new hire information.
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| Q9. |
Are labor organizations and hiring halls required to report members
under the New Hire Reporting Program?
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| A9. |
Labor organizations and hiring halls must report their own employees
(individuals who work directly for the labor organization or hiring hall). If
the labor organization or hiring hall simply refers individuals for employment,
the labor organization or hiring hall does not need to file a New Hire Report.
The employer who puts them on the payroll must report the employee information.
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National Medical Support Notice
| Q1. |
What is the National Medical Support Notice?
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| A1: |
The National Medical Support Notice is a standardized medical child
support order used by state child support enforcement agencies to enforce
medical child support obligations. The Department of Labor and the Department
of Health and Human Services adopted regulations on December 27, 2000,
implementing the National Medical Support Notice provisions of the Child
Support Performance and Incentive Act of 1998 (CSPIA). (These regulations
appear in 29 CFR 2590.609-2 and 45 CFR 303.32.) CSPIA also requires plans
sponsored by churches and state and local governments to provide benefits in
accordance with the requirements of an appropriately completed notice. For
questions with respect to these plans, contact your state child support
enforcement agency.
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| Q2. |
Does the National Medical Support Notice always come from the
Illinois Department of Healthcare and Family Services?
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| A2: |
No. The law allows every state to serve employers outside their state. The
federally mandated form will only be used by state government child support
agencies.
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| Q3. |
Will the employer packets vary?
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| A3: |
Yes. The Order/Notice to Withhold Income for Child Support and the National
Medical Support Notice should be the same from every state. The federal
government requires that the content and formatting of these forms be standard
to make them easily recognizable. However, each state may have different
forms/documentation/instructions that accompany the notices.
Additionally, a state agency will include the National Medical Support Notice
with the Order/Notice to Withhold Income for Child Support in an
employer packet only when dependent insurance is ordered through an
employer/union. The National Medical Support Notice may also be issued
separately from the Order/Notice to Withhold Income for Child Support.
Also, individual attorneys and parents have the legal right to serve employers.
They cannot use the National Medical Support Notice but may use the Order/Notice
to Withhold Income for Child Support.
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| Q4. |
What are an employer's obligations when receiving a National Medical
Support Notice?
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A4: |
The Notice has two parts - Part A, Notice to Withhold for Health Care Coverage
(which includes an Employer Response) and Part B, Medical Support Notice to Plan
Administrator (which includes a Plan Administrator Response). The
employer must check the appropriate box on Part A (Employer Response)
and return it to the issuing agency within 20 business days after the date of
the notice (or sooner if reasonable) if the:
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Employee named in the notice is not an employee; or
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Employer does not maintain or contribute to a plan that provides dependent
coverage; or
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Named employee is among a class of employees (e.g., part time or non-union) not
eligible for enrollment in a plan that provides dependent coverage.
In all other cases, the employer must transfer Part B of the notice to the
group health plan (or plans) for which the child may be eligible for
enrollment. The employer must transfer Part B not later than 20 business days
after the date of the notice. (For Part A and Part B purposes, the "date of the
notice" means the date that is shown on the notice.)
If the employer offers different types of benefits (e.g., dental, prescription)
through separate plans, and the issuing agency does not specify the type of
coverage, the employer should assume that all plans are included and should
forward copies of Part B to each plan administrator.
Application of a "waiting period" before an employee may enroll in the group
health plan does not affect the employer's obligation to transfer Part B to the
plan administrator(s).
When transferring Part B of the notice, the employer retains Part A. The
employer may later need to use Part A if it is determined the employee has
insufficient income to withhold the contribution required to enroll the
child(ren) in the health care plan.
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| Q5. |
What are a plan administrator's obligations upon receipt of a National
Medical Support Notice?
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A5: |
The plan administrator must inform the state agency that issued the notice when
coverage under the plan for the child named in the notice will begin. The plan
administrator must also provide the child's custodial parent (or, in some
cases, a named state official) with information about the child's coverage
under the plan, such as the plan's summary description, any required forms or
documents necessary for filing claims under the plan, etc.
If the employee is not enrolled and there is more than one option available
under the plan for coverage of the child, the plan administrator must also use
the Plan Administrator Response to notify the agency of that fact, and
inform the agency of the available options for coverage. If the agency does not
then respond within 20 business days and the plan has a "default option," the
plan administrator may enroll the child in the default option.
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| Q6. |
What is an "appropriately completed" National Medical Support Notice
(NMSN)?
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A6: |
An "appropriately completed" notice is a notice that includes the following
information:
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The name of an issuing state's child support enforcement agency
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The name and mailing address of the employee, who is enrolled or eligible for
enrollment and who is obligated by a state court or administrative order to
provide medical support for each named child
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The name and mailing address of each child covered by the NMSN (The name
and address of a state or local official may be substituted for the child's
name and address.)
As long as the NMSN includes the information listed above, it should be
considered "appropriately completed" even if some information is not included
but is reasonably available to the employer.
| Note: All Illinois-issued NMSNs are pre-printed, contain all
necessary information and should be considered appropriately completed. |
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| Q7. |
What if the non-custodial parent is not yet eligible to enroll
because he or she has not satisfied the plan's generally applicable waiting
period?
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A7: |
For short waiting periods (90 days or less remaining at the time of the plan
administrator's receipt of Part B), the plan administrator waits until the
expiration of the necessary time to enroll the child and notifies the employer
of the need, if any, to withhold from the employee's wages to provide such
coverage.
For long waiting periods (greater than 90 days remaining at the time of the
plan administrator's receipt of Part B, or the period is measured by other
means, such as hours worked), the plan administrator should inform the employer
of the waiting period. The employer sends Part A to the department and notifies
the plan administrator when the employee becomes eligible.
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| Q8. |
What does an employer do if the income is insufficient to withhold
for medical coverage?
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A8: |
The employer must determine if necessary employee contributions may be withheld
from the employee's wages without violating any applicable withholding limits.
Part A of the National Medical Support Notice (NMSN) contains
information for the employer regarding federal and state limitations on
withholdings, any applicable withholding prioritization laws, and the duration
of the withholding obligation. If withholding limits would prevent the employer
from withholding the employee contributions necessary for coverage, the
employer must use the Employer Response on Part A to notify the issuing IV-D
agency of the employer's inability to withhold the necessary amounts. If the
amounts necessary for coverage can be withheld, then the employer must initiate
such withholding and transmit the withheld amounts to the group health plan to
pay for the child's coverage. (For income withholding limitations, reference
Income Withholding, Question 13.)
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| Q9. |
Who pays for coverage provided pursuant to a National Medical Support
Notice (NMSN)?
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A9: |
The NMSN provides that the employee named in the NMSN is liable
for any employee contributions required under the plan for enrollment of the
children. However, if federal or state withholding limitations prevent the
withholding of the required employee contributions from the employee's
paycheck, the plan is not required to provide coverage for the child. The
employer is required to notify the state agency if such withholding limitations
prevent the withholding of the required employee contributions.
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| Q10. |
Are all medical child support orders issued by a court?
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A10: |
No. Either a court of competent jurisdiction or an administrative agency
authorized to issue child support orders under state law (such as a state child
support enforcement agency) can issue a medical support order.
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| Q11. |
Who can be an "alternate recipient"?
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A11: |
Any person named under a medical child support order as having a right to
enrollment under the plan with respect to the plan participant is an alternate
recipient.
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| Q12. |
What should the employer do if the employee ordered to obtain
dependent health insurance is not enrolled in the plan?
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A12: |
If the employee is not enrolled, the employer should request the employee to
enroll so the child can be enrolled. If the employee refuses to enroll and the
plan does not allow the employer to enroll the employee without his/her
consent, the employer should check with the plan administrator to see if the
child can be enrolled independently. If not, the employer completes Part A, #1,
noting the child cannot be enrolled, and returns the form to the issuing
agency.
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| Q13. |
Can a medical child support order require the plan to provide
coverage for a child of a participant if a group health plan does not provide
any dependent coverage?
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A13: |
No. The employer marks #1 of Part A and returns the form.
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| Q14. |
Is the plan required to create and provide comparable benefits to an
alternate recipient who resides outside of the HMO's service area if a plan
provides benefits solely through an HMO or other managed care organization with
a geographically limited benefit area?
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A14: |
No. A National Medical Support Notice (NMSN) cannot require a
type or form of benefit that is not otherwise available under the plan. A plan
that provides benefits solely through a limited-area HMO is not required to
provide benefits to alternate recipients outside of the HMO's service area
(i.e., on a fee-for-service or any other basis). On the other hand, if the
dependent is able to come into the HMO's service area for medical care, the
plan would be required to provide benefits.
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| Q15. |
Does the child have any rights to continuation coverage if a child
is covered by a group health plan pursuant to the National Medical Support
Notice (NMSN)?
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A15: |
Yes. A child covered by a group health plan pursuant to an NMSN is a
beneficiary under the plan. The Internal Revenue Service (which has
jurisdiction over such questions) has informed the department that a child
covered pursuant to an NMSN is therefore a "qualified beneficiary" with
the right to elect continuation coverage under COBRA, if the plan is subject to
COBRA and if the child loses coverage.
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| Q16. |
When must a plan begin to provide coverage pursuant to a National
Medical Support Notice (NMSN)?
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A16: |
Coverage must begin at the earliest possible date following receipt of the NMSN.
For example, if an insured plan only adds new participants or beneficiaries as
of the first day of each month, the plan would be required to provide coverage
as of the first day of the first month following the receipt of the NMSN.
Section 1908 of the Social Security Act requires that when a child is enrolled
in a plan pursuant to a court or administrative order, that enrollment be made
without regard to open-enrollment restrictions.
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| Q17. |
To whom should the plan pay benefits?
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A17: |
The plan should pay benefits to the alternate recipient, the custodial parent,
or the provider of health services to the child, notwithstanding plan terms
that may require benefit payments be made to the participant. In some
instances, the plan will be required to make payment to the state child support
enforcement or Medicaid agency.
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| Q18. |
When and under what conditions may a plan disenroll an alternate
recipient?
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A18: |
A plan may disenroll an alternate recipient at the same time and under the same
conditions as it can disenroll other dependents of participants under the plan.
For instance, if the plan terminates coverage when a participant terminates
employment, and neither the participant nor the alternate recipient elects
COBRA continuation coverage, the plan may discontinue coverage for the
alternate recipient. Similarly, if the plan ceases to provide coverage for
dependents that are over the age of 18, the coverage of an alternate recipient
who is over the age of 18 may be terminated (assuming that continuation
coverage is not elected).
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| Q19. |
Must an "alternate recipient" be enrolled in the same coverage and
options in which the participant is enrolled if a plan provides that dependents
of participants must be enrolled in the same coverage and option as the
participant?
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A19: |
Yes.
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Income Withholding
| Q1. |
When does the state of Illinois send out income withholding
notices?
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A1: |
Illinois initiates an Order/Notice to Withhold Income for Child Support to
the employer within two (2) days of learning about a non-custodial parent's
employment or whenever changes occur on an existing Order/Notice.
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What does the employer receive?
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A2: |
Illinois sends the employer The Order/Notice to Withhold Income for Child
Support, Child Support Remittance Form, and Employer's Income
Withholding Worksheet. The National Medical Support Notice and the
Health Insurance Report is included if employer- or union-related health
insurance is ordered. These forms provide a summary of all the information the
employer needs to comply with income withholding and dependent medical
insurance.
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| Q3. |
Does a notice to Withhold always come from the Illinois Department
of Healthcare and Family Services?
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A3: |
No. The law allows every state to send withholding notices to employers outside
their state. The employer must follow the laws of the state sending the notice.
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| Q4. |
How does an employer know when and how much to withhold?
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A4: |
Withholding must begin no later than the first pay period occurring within 14
business days after the date the notice was mailed, faxed or personally served
on the employer. The notice informs the employer of the amount to be withheld.
The withheld pay must be sent within seven (7) business days of the pay date of
withholding. The address to which the withheld pay is to be sent is in the
notice.
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| Q5. |
What if the employee's available allowable disposable income is less
than the amount to be withheld?
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A5: |
If the pay available for withholding under the federal Consumer Credit
Protection Act cannot meet total child support payments, then the employer
withholds amounts provided in the Order/Notice using the following
priority list:
1. Current child support
2. Health care coverage
3. Arrearage
4. Delinquency payments
5. Notice of Levy (wage garnishment)
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| Note: A13. directly below provides the CCPA limitations; the Employer
and Income Withholding Page also provides additional information under the
headings: Income Withholding and CCPA and Insufficient Income to Withhold
Ordered Amounts. |
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| Q6. |
What does an employer send with the check or money order for
employees' withheld funds?
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A6: |
The remittance should be made payable to the state Disbursement Unit and must
include:
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Illinois county where the order was entered
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Case/docket number
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Name of each employee
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Social Security number of each employee
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Amount of the payment and pay date for each employee and each case number (if
the employee has more than one case)
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Name and address of the payee, if known
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| Q7. |
Can the employer send withheld income from the pay of several
different employees in one check?
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A7: |
Yes. An employer may combine withheld amounts for more than one employee in a
single payment; however, information (see A6 directly above) must be provided
about the amount withheld for each employee listed.
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| Q8. |
Does an employer have to withhold at the frequency on the notice?
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A8: |
Employers do not have to vary their pay cycles to comply with the ordered
frequency. For the employer's convenience, the notice provides the total amount
to be withheld and the corresponding amounts for weekly, biweekly, semimonthly
and monthly pay cycles.
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| Q9. |
How does an employer know when to stop withholding?
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A9: |
Employers stop withholding current support on the first pay date after the
termination date, which appears on the notice. Withholding of arrearage or
delinquency must continue until paid in full or until the employer is notified
to stop withholding.
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| Q10. |
Can an employer charge a fee to cover the cost of issuing a separate
check?
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A10: |
An employer can charge a fee of up to $5 per month to each employee where the
employer is withholding income. The employer deducts this fee from the
employee's remaining income, not the support payment.
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| Q11. |
What if the employee quits?
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A11: |
When the employee's employment ends, the withholding should continue through
the last pay date. When the employee leaves, the employer should return the Order/Notice
to the issuing agency along with any information the employer might have about
the employee's new employment and address. The Employer Response Page of
Part A of the National Medical Support Notice should also be completed
and returned to the issuing agency.
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| Q12. |
What are the priorities for wage garnishment?
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A12: |
Support payments take priority over all others, except federal (IRS) tax
levies served prior to the date of the child support order (the underlying
order, not the Order/Notice to Withhold Income for Child Support). If
the employee also has federal, state or local tax garnishments, the employer
should seek confirmation of this withholding priority from the tax agency.
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| Q13. |
How does the federal Consumer Credit Protection Act affect
withholding?
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A13: |
The federal Consumer Credit Protection Act limits the available net income as
follows:
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50% if the non-custodial parent has other dependents and owes no arrearages or
is less than 12 weeks in arrears
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60% if the non-custodial parent has no additional dependents and owes no
arrearage or is less than 12 weeks in arrears
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55% if the non-custodial parent has other dependents and is over 12 weeks in
arrears
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65% if the non-custodial parent has no other dependents and is over 12 weeks in
arrears
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| Q14. |
Can child support be withheld from bonuses, profit sharing, severance pay and commissions?
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A14: |
Yes. This must be done if the periodic wage amount does not satisfy the ordered
support amount or if the child support order states that an additional amount
is to be taken from the additional income.
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| Q15. |
Are there shortcuts to make it easier for employers to comply?
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A15: |
Illinois law requires that after June 30, 2000, every employer having 250 or
more employees shall use electronic funds transfer (EFT) to pay all amounts
withheld pursuant to a child support income withholding notice. (750 ILCS 28/35
(a)) Additionally, the statute requires that after January 1, 2001, every
employer with fewer than 250 employees and where the employer withholds income
for child support for 10 or more income withholding notices during the
preceding December shall use EFT to pay all amounts withheld pursuant to a
child support income withholding order. (750 ILCS 28/35 (a)) Employers should
contact the Illinois state Disbursement Unit EFT liaison for instructions on
how to properly submit child support payments by EFT. The EFT liaison contact
number is 1-888-704-0683.
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| Q16. |
Can an employer discipline, discharge or refuse to hire an employee
who has a withholding order?
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A16: |
No. If an employer discharges, disciplines, refuses to hire or otherwise
penalizes an employee because of a support obligation, the employer can be
ordered to employ, reinstate and pay restitution to the employee. The employer
may also be fined up to $200.
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| Q17. |
What does an employer do when the employee or custodial parent asks
questions about his or her Order/Notice to Withhold Income for Child Support
or National Medical Support Notice?
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A17: |
Employers are not responsible for answering questions about the information on
the notices. The employer should refer the employee or custodial parent to the
inquiry number provided on the notices or to the customer service number listed
on the Web site's Contact Information Page.
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| Q18. |
What if an employer does not comply with an Order/Notice to Withhold
for Child Support?
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A18: |
The employer may be subject to a $100 penalty for each day that the withheld
amount is not paid after seven (7) business days have expired. If the employer
willfully fails to withhold support pursuant to a notice, the employer can also
be liable for the total amount not withheld.
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| Q19. |
Does the employer have to tell the employee that an Order/Notice to
Withhold Income for Child Support has been received? What about the National
Medical Support Notice?
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A19: |
For an Illinois order, the department not only sends the employee a copy of the Order/Notice
to Withhold Income for Child Support, but also includes a Non-Custodial
Parent notice, which explains the withholding process and the
employee's rights. If the employer receives the Order/Notice to Withhold Income
for Child Support from another state, the employer must provide a copy
to the employee.
For all Illinois orders and all orders registered in Illinois, the department
sends the employee a cover letter regarding service of the National Medical
Support Notice on their employer and a copy of the National Medical
Support Notice. Because the NMSN the employer receives may
contain the custodial parent's and child(ren)'s names and address(es), the
employer should never share this document with the employee.
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| Q20. |
What should the employer do when the employee is ordered to provide
medical support?
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A20: |
When the non-custodial parent is ordered to provide dependent health insurance
coverage through employment or the union, the employer or union receives a National
Medical Support Notice. If employee/dependent medical coverage is
provided by the employer, the employer must forward Part B of the notice to the
plan administrator, who must immediately enroll (without regard to enrollment
periods) the employee's child(ren) in the health plan designated in the order.
The employer must withhold and pay the required premiums and other insurance
fees on time. The employer/plan administrator must also mail to the custodial
parent within 15 days of enrollment (or upon request) a notice of the effective
date of coverage, information on the dependent coverage plan and the necessary
forms to obtain reimbursement for covered services. The National Medical Support
Notice contains the custodial parent's name and address. This
information is confidential and is not to be shared with the employee.
If the employer does not provide employee/dependent medical coverage, the
employer completes Part A (Employer Response) of the National Medical
Support Notice and returns it in the envelope provided or to the
address listed on page one of the notice.
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| Q21. |
What does the employer do when an employee says the information on
the Order/Notice to Withhold Income for Child Support is wrong?
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A21: |
Employers are not responsible for answering questions about the information on
the Order/Notice to Withhold Income for Child Support. When an employee
questions the withholding, the employer should refer the employee to the
information on Page 3 of the Non-Custodial Parent notice, which is
included in the employer-withholding packet and is also sent to the
non-custodial parent. Directions on how to contest an income withholding order
are clearly explained in this notice.
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| Q22. |
How can an employee owe past-due support when the employer has sent
every single payment on time since the employee started working?
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A22: |
A non-custodial parent can owe past-due support prior to his or her employment
with a new employer. Also, if the non-custodial parent does not personally pay
the child support to the State Disbursement Unit during the time between the
start date of the Order/Notice to Withhold Income for Child Support and
the date the employer actually withholds from the paycheck, a delinquency may
accrue.
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