It has recently come to our attention that a few schools have not responded timely to request by the State Health Plan (SHP) to garnish employee wages for overpayments made by the SHP. As such, are now being invoiced for those overpayments directly.
Let me remind you, N.C.G.S. § 135-48.37A requires employing units to assist the Plan in collecting amounts owed by Plan members by garnishing the member’s wages and imposes a duty on the employing unit to pursue these funds.
As I understand the process, the SHP makes an attempt to obtain the ‘owed’ amount from the employee directly before any outreach occurs to the employer. If the SHP is not successful working directly with the employee, then they send a notice to the employer requesting that the employee’s wages be garnished. And lastly, if the employer doesn’t respond to the garnishment, the SHP will invoice the employer directly for payment of the outstanding debt. It would then fall to the employer to recoup the debt from the employee – basically, require the employee to pay back the employer.
The few situations we’ve been made aware of have our institutions at the point of being invoiced (past the garnishment stage). In addition to this being state law, it is worth reminding you that an entity such as the State Health Plan (and its parent agency, the State Treasurer’s Office) has an important oversight and compliance role in a number of matters that impact your institution and the University System as a whole.
As such, I would like to ask each of you to:

  • Refresh your understanding of the law – NCGS 135-48.37A
  • Make sure you have an internal process for handling of these requests, including confirming that the garnishment is actually being deducted
  • Make sure your internal process includes a feedback mechanism to the SHP (i.e. confirm receipt of the request, confirm garnishment has started)
  • These invoices are in most cases sent to the Benefits Office but sometimes your Payroll Unit may receive them. It is important to make sure that folks within HR/Benefits/Payroll understand the importance and urgency of these notices.
  • You should not give the employee an opportunity to ‘settle’ the debt once the garnishment notice or invoice has been received by the employer. Prior to contacting you, the SHP has already tried to make arrangements with the employee so there are no additional options for the employee to resolve if the employer has been asked to take action.

Please let me know if you have any questions.
Sent to Benefits Managers with copy to HR Council from Ashley Nicklis