New State Health Plan Wage Garnishment Legislation

House Bill 1056 became law on June 25, 2018.  This legislation mandates employing unit cooperation in collecting through wage garnishment money that members owe the State Health Plan (Plan). Specifically, any payment of benefits or other amounts to, or premiums or claims paid on behalf of, any Plan member that is later determined to be an overpayment, an erroneous payment, or a benefit or amount for which the Plan member was ineligible, shall be repaid by the Plan member.

If the Plan member is an employee of an employing unit, then any amounts to be recouped under this subsection shall be offset against the net wages of the Plan member.

What this means for you:

  • When a Plan member owes an amount to the Plan, the Plan will notify the member of this debt in writing.  If the member does not enter into a payment plan acceptable to the Plan within 30 days after the written notice, the Plan will notify the member's employer of the debt.
  • When the employing unit receives notice of the debt from the Plan, the employing unit is required to offset the amount owed against at least 10 percent of the net wages of the member until the Plan notifies the employing unit that the debt has been paid in full.
  • The Plan's notice to the employing unit shall be prima facie evidence that the debt is valid and the employing unit has no obligation to verify the amount owed.
  • The employing unit must provide written notice to the member before beginning the offset. The written notice must be no more than 30 days but not less than 14 days.
  • The employing unit is required to remit all offset amounts to the Plan in intervals corresponding with the employing unit's regular pay periods.
  • If an employing unit does not follow these requirements, the Plan will, after notice to the employing unit of its failure to cooperate, be entitled to seek recovery of any amounts due directly from the employing unit.
  • Debts owed to the Plan may not be forgiven by the Plan’s Board of Trustees, the Plan, the Plan’s Executive Director, the State Treasurer, or an employing unit.
  • The Plan and the employing unit have a duty to pursue repayment in full of these debts by all lawful means available, including the filing of a civil action in the General Court of Justice.

For details, visit the Recovery Section.

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