Employers’ Guide to Child Support, Part 2

Medical Insurance

Under current law, every new child support order must include a provision for medical support. Medical support coverage could be provided in one of several ways.

1. Order to Include the Children in the Insurance Program

The order could require the paying parent to include the children in the insurance program provided by the parent’s employer.

In this case, the employer will be notified to enroll the employee in the company’s family coverage plan and deduct the premium from the employee’s income. If an application is needed, the employer must accept an application from either parent, the Department of Workforce Development, or the child support agency. The employer is required to notify the child support agency when coverage of the child (ren) under the health plan is in effect, and upon request, provide copies of necessary program or policy identification to the other parent. Click here for a directory of child support agencies.

The National Medical Support Notice serves as notice that the employee identified in the Notice is obligated by a court or administrative child support order to provide health care coverage for the child(ren) identified in the Notice. The National Medical Support Notice replaces any Medical Support Notice that the Issuing Agency has previously served on you with respect to the employee and the child(ren) listed in the Notice.

If the employee is eligible, family coverage for the child must begin immediately, without regard to enrollment period or waiting period restrictions. The employer may not discontinue coverage for a child unless:

  • Written evidence is sent that the child has comparable coverage from another source or that the court order is no longer in effect.
  • The employer eliminates family health coverage for all of its employees.
  • Similarly situated children are no longer eligible for coverage under the terms of the plan. However, the continuation coverage provisions of the Employees Retirement Income Security Act (ERISA) may entitle the child(ren) to continuation coverage under the plan.

Note to self-insured employers: under changes in the 1993 omnibus budget reconciliation act, self-insured employers subject to the federal ERISA must follow any Qualified Medical Child Support Order (QMCSO) sent to them. The company may elect to accept a conventional medical support order instead.

Click here for more information about the National Medical Support Notice.

2. Order to Pay the Premium

The order could require the parent to pay the premium for a medical insurance plan provided by someone other than the parent’s employer.

In this case, the employer will be sent a notice to withhold the premium amount from the employee’s income and send the premium payment to the appropriate insurer, provider, or designated agency.

3. Order to Pay Additional Amount

The order could provide that the parent (your employee) pay an additional amount of support to cover all or a share of the premiums charged to the other parent.

In this case, the support ordered to cover the premium would be included in the employee’s overall child support obligation to be withheld from his or her income.

4. Fees

You may not charge a fee for sending an insurance premium payment to the appropriate health care provider, but you may charge a fee for insurance premium payments you send to the Wisconsin Support Collections Trust Fund. These cases are unusual. The amount you charge should be the actual cost, but cannot be more than $3.

5. Withholding Limits for Medical Support

The total amount withheld for both cash and medical support cannot exceed the CCPA limit as listed on the employee's income withholding notice/order. Click here for detailed information on CCPA limits.

If under the CCPA limits, the employee's disposable income is insufficient for both cash and medical support contributions, the employer must withhold amounts for purposes of cash support and medical support contributions in accordance with the law, if any, of the state of the employee's principal place of employment requiring prioritization between cash and medical support. (Wisconsin has no applicable law for prioritization of withholding.)

In most cases, the National Medical Support Notice will limit the amount allowed for health insurance premiums to "reasonable cost." Reasonable cost is generally interpreted to mean that the employee’s share of the monthly family coverage premium does not exceed 5% of the employee's gross monthly income.

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Income Withholding Notices from Other States

1. Overview

When you receive an income withholding order/notice from another state, and the employee’s principal state of employment is Wisconsin, you should comply with Wisconsin laws for determining the following:

  • The employer’s fee for processing an income withholding order/notice
  • The maximum amount permitted to be withheld from the employee’s income
  • The time frames within which the employer must implement the support order and forward child support payments to the issuing state
  • The priorities for withholding and allocating income withheld if an employee has multiple support withholding notices

A Wisconsin employer who complies with an income withholding order/notice issued by another state in accordance with the Uniform Interstate Family Support Act (UIFSA) cannot be held liable for withholding child support from an employee’s income.

A Wisconsin employer who willfully fails to comply with an income withholding order/notice issued by another state is subject to the same penalties that may be imposed for noncompliance with an order/notice issued by a Wisconsin tribunal.

If an employee contests a direct income withholding order/notice issued by another state, the employee must provide a notice of contest to the employer who received the income withholding order/notice.

The federal Office of Child Support Enforcement has developed a standard order/notice of income withholding to facilitate uniform processing of interstate income withholding. Click here to view a copy of the standard form*.

* Requires Adobe(r) Acrobat Reader. Click here to download a free copy of the Adobe(r) Acrobat Reader.

2. Mailing Your Payments to Other States

Please check the income withholding notice that you received for the address.

3. CCPA and Orders/Notices from Other States

Wisconsin employers must comply with an income withholding order/notice issued by another state in accordance with the Uniform Interstate Family Support Act (UIFSA).

If you have an employee with income withholding orders/notices from two different states, but the CCPA limits prevent you from withholding the total amount due, you will need to prorate the amounts sent to the two states.

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Other Employer Responsibilities

1. Termination Notification

You must notify the agency designated to receive support payments within ten (10) days after an employee terminates employment. The employer must provide the agency with the employee's last known home address and the name and address of the new employer, if known.

2. Employer Liability

As an employer, you are required to forward child support money withheld from income to the designated collection location or agency within five (5) days of the withholding. You will have one (1) week from the receipt of the initial income withholding notice to begin withholding from employee wages.

Employers can be held liable if they do not comply with income withholding notices. An employer who fails to withhold income after receiving a withholding notice or who fails to forward the withheld money may be liable for contempt of court and a financial penalty. Courts may also impose a civil forfeiture on an employer who does not withhold money or who does not send the money to the specified location within five (5) days. Courts may hold an employer responsible for the amounts of support they fail to withhold.

Employers can also be held liable for failing to report New Hire information. The law provides for a penalty of up to $25 for each employee the employer fails to report. Furthermore, the employer can be held liable for a fine of up to $500 for failing to report or reporting false information because of a conspiracy with an employee. Employers will be notified of any potential penalties and will have an opportunity to contest their application.

3. Discrimination Prohibited

An employer may be subject to a fine of up to $500 for discharging an employee from employment, refusing to employ, or taking disciplinary action against any employee because of income withholding for child support. The employer may also be required to make full restitution to the aggrieved person, including reinstatement and back pay.

4. Providing Employee Information

When trying to locate child support payers, child support agencies may contact employers and request information about their employees. Information typically requested includes employment dates, wages, home and work addresses, and health insurance coverage. You are required to provide all information requested by child support staff from Wisconsin within seven (7) days of the request. You may ask that requests for information be made by letter. If you have concerns about the information being requested, contact the child support agency (click here for a directory of child support agencies) or the state Bureau of Child Support (click here to email the Bureau of Child Support).

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Statutes

  • Combining payments – §767.75(7) Wis. Stats.
  • Discrimination – §767.75(6)(c); §973.20, Wis. Stats.
  • Employers’ costs and charges – §767.75(3h), Wis. Stats.
  • Employer liability for income withholding – Chapters 767, 778, and 785, Wis. Stats.
  • Faxing income withholding notices – §767.75(2r), Wis. Stats.
  • Forwarding withholdings – §767.75(3h), Wis. Stats.
  • Gross income reporting – § 767.75(3h), Wis. Stats.
  • Income definitions – Administrative Rule DCF 150.02(13)
  • Interstate income withholding – §769.501, 769.504, 769.505, Wis. Stats.
  • Medical insurance –§767.75(3h); §767.513, Wis. Stats.; federal Omnibus Budget Reconciliation Act of 1993; federal Employee Retirement Income Security Act.
  • New Hire Reporting – §103.05, Wis. Stats.
  • Priority (legal process against same income) – §767.75(4), Wis. Stats.
  • Providing information – §49.22(2m), Wis. Stats.
  • Termination notification – §767.75(6)(b), Wis. Stats.
  • Withholding amounts – §767.75(1)(b); § 767.75(1f), Wis. Stats.
  • Withholding limits – 45 CFR 303.100(a)(3); 15 u.s.c.1673(b); §767.75(1f), Wis. Stats.
  • Withholding R&D – §767.75(2m), Wis. Stats

Links to laws and regulations:

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Income Withholding Calculations

Click here to use withholding calculators (Require MS Excel)

A. Income Withholding Calculations for Percentage Orders

Example A-1

Combination of a percentage order with an additional fixed-dollar amount

Scenario:

  • Income withholding order/notice: "17% of gross income, plus $10 per week"
  • Gross income for the biweekly pay period is $500

Calculation:

  • $500 x 17% = $85
  • $10 x 2 weeks = $20
  • Income withholding is $105 ($85 + $20)

Example A-2

Combination of a percentage order with a fixed-dollar amount minimum

Scenario:

  • Income withholding order/notice: "17% of gross income or $50 per week, whichever is greater"
  • Gross income for the biweekly pay period is $500

Calculation:

  • Percentage of gross income amount is $500 x 17% = $85
  • Fixed sum amount is $50 per week x 2 weeks = $100
  • Compare the two amounts ($85 vs. $100)
  • Withhold the greater amount ($100)

Example A-3

Combination of a percentage order with a fixed-dollar amount maximum

Scenario:

  • Income withholding order/notice: "17% of gross income or $50 per week, whichever is less"
  • Gross income for the bi-weekly pay period is $500

Calculation:

  • Percentage of gross income amount is $500 x 17% = $85
  • Fixed sum amount is $50 per week x 2 weeks = $100
  • Compare the two amounts ($85 vs. $100)
  • Withhold the lesser amount ($85)

B. Income Withholding Calculations for R&D Fees within CCPA Limits

Example B-1

Calculating withholding amounts within CCPA limits for a fixed-dollar amount order and a withholding for R&D Fees

Scenario:

  • Income withholding order/notice: $100 per biweekly pay period
  • R&D Withholding: $35
  • Total Amount: $135 for the biweekly paycheck
  • Employee’s CCPA limit on the income withholding order/notice is 60% of disposable income
  • Gross income for the biweekly pay period is $250
  • Disposable income is $205

Calculation:

  • Employee's CCPA limit is 60% of disposable income is: 60% X $205 = $123
  • Compare withholdings to CCPA limits:

Income withholding order/notice: $100 (below the CCPA limit)
With R&D Withholding: $35 + $100 = $135 (above the CCPA limit)

  • Prorate the R&D Fee withholding CCPA limit $123 - $100 income withholding order/notice = $23 R&D Withholding
  • Withhold $23 for the R&D Withholding

R&D Fee Example B-2

Calculating withholding amounts within CCPA limits for a percentage order, a fixed-dollar amount order and an R&D withholding

Scenario:

  • Income withholding order/notice 1: 31% per bi-weekly pay period
  • Income withholding order/notice 2: $150 per bi-weekly pay period
  • Employee’s CCPA limit noted on the income withholding order/notice is 55% of disposable income
  • R&D withholding: $70
  • Gross income per bi-weekly pay period is $500
  • Disposable income is $450

Calculation:

  • Employee’s CCPA limit is 55% of disposable income: 55% x $450 = $247.50
  • Total amount due per income withholding notices: (31% x $500 = $155) $155 + $150 = $305 per bi-weekly paycheck (does not include $70 R&D withholding)
  • Income withholding notices 1 and 2 = $305 (above the CCPA limit)
  • Withhold nothing for the R&D withholding

C. Income Withholding Calculations within CCPA Limits for Multi-State Orders

Example C-1

Calculating withholding amounts for two states within CCPA limits when both notices/orders are for fixed-dollar amounts.

Scenario:

  • Wisconsin notice/order is for $200 per month
  • Minnesota notice/order is for $350 per month
  • Employee’s gross income is $900/month
  • Employee’s CCPA limit noted on the order/notice is 55% of disposable income
  • Disposable income is $750/month

Calculation:

  • Employee’s CCPA limit is 55% of disposable income: 55% x $750 = $412.50
  • Total amount due per notices/orders: $550 ($200 + $350) is above the CCPA limits
  • Wisconsin notice is 36% of total ($200/$550)
  • Minnesota notice is 64% of total ($350/$550)
  • Prorated amount for Wisconsin order/notice: 36% of $412.50 = $148.50
  • Prorated amount for Minnesota order/notice: 64% of $412.50 = $264
  • Withhold $148.50 and remit to Wisconsin and
  • Withhold $264 and remit to Minnesota

Example C-2

Calculating withholding amounts for two states within CCPA limits when one order is a percentage order and one order is a fixed-dollar amount.

Scenario:

  • Wisconsin income withholding order/notice: 31% of gross income
  • Illinois income withholding order/notice is $150 per bi-weekly pay period
  • Gross income for the bi-weekly pay period is $500
  • Employee’s CCPA limit noted on the withholding order/notice is 55% of disposable income
  • Disposable income is $450 per bi-weekly pay period

Calculation:

  • Employee’s CCPA limit is 55% of disposable income: 55% x $450 = $247.50
  • Total amount due per notices: (31% x $500 = $155) $155 + $150 = $305
  • Wisconsin notice is 51% of total ($155/$305)
  • Illinois notice is 49% of total ($150/$305)
  • Prorated amount for Wisconsin notice: 51% of $247.50 = $126.23
  • Prorated amount for Illinois notice: 49% of $247.50 = $121.27
  • Withhold $126.23 and remit to Wisconsin and
  • Withhold $121.27 and remit to Illinois

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Resources for employer information

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Updated April 09, 2009