Debbie Tam, CPP
PayrollOrg (formerly known as the American Payroll Association) held its 41st Payroll Congress in Denver, Colorado. During the Forum on Federal Payroll Issues, Part 2, Sherri Grigsby, Deputy Director, Division of Federal Systems, Office of Child Support Enforcement (OCSE) of the U.S. Department of Health and Human Services, addressed various topics regarding employer responsibilities for child support orders as requested by payroll practitioners in attendance.
Payments should be directed to SDUs.
Grigsby explained that there are two exceptions where an employer would not direct child support payments to the State Disbursement Unit (SDU). One is if the Income Withholding Order (IWO) comes from a Tribal Child Support Agency that directs payment to the entity or individual on the order. The other exception is for orders that were entered by the state before January 1, 1994. Therefore, Grigsby advises that if such an IWO does not meet one of these exceptions, the employer should return the order. Grigsby noted that the IWO has a checkbox where the employer can explain that the order is being returned because payments are not directed to the SDU. On the current IWO, this checkbox is located on page 2 under the heading “Return to Sender (Completed by Employer/Income Withholder).” The IWO instructions further explain that the box must be checked and the IWO returned if the IWO is not payable to an SDU or Tribal Payee or the IWO is not regular on its face as indicated on page 1 of the instructions. Grigsby also noted that the OCSE is currently in the process of renewing the IWO which is due to expire on September 30, 2023.
National Medical Support Notice (NMSN) requirements.
Employers may receive a National Medical Support Notice (NMSN) for an employee. NMSN may be included in the same mailing with the IWO or sent separately. If an employee is eligible for health insurance through the employer, Part B of the NMSN should be sent to the plan administrator for completion and the NSMN returned to the state child support agency. Grigsby said that employers have been asking for an automated NMSN process and announced that an Electronic NMSN (E-NMSN) is now available. It has gone live with two states currently using E-NMSN, Nebraska and Virginia. While the E-NMSN has a no-programming option for employers, states will need to do system development.
Child Support Portal enhancements.
OCSE has updated its Child Support Portal based on collaborating with employers and state child support agencies. Employers are not required to have a server in order to access the portal. Grigsby addressed the painpoint of encrypted emails for communication. She had heard from a large employer that they received 400 individually encrypted emails from a child support agency. As a result of that feedback, one of the enhancements include a Communication Center application that allows employers and child support agencies to exchange sensitive information. Currently, 36 states and territories are actively using the Communication Center. OCSE is also working on an application that will allow employers without servers to participate in E-IWO (electronic IWO) and E-MSN with an online application that will allow employers to go to the portal and download orders and upload responses.
Impact of daily payroll and earned wage access program.
Daily pay or earned waged access arrangements allow employees to be either daily or on-demand as wages are earned rather than waiting for the usual pay date. When Grigsby was asked what the impact was of daily pay or earned wage access on child support withholding obligations, Grigsby explained they are looking at the matter closely and that OCSE is aware that employers are considering these payment options.
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