New Regulations Will Make it Easier for School Districts to Access Public Benefits or Insurance to Pay for Special Education Services

On February 14, 2013, the United States Department of Education released new regulations designed to make it easier for school districts to obtain parental consent to access a child’s or parent’s public benefits or insurance, such as Medicaid.  This is a significant development because under certain circumstances, school districts may access such benefits or insurance to pay for special education and related services.  These new regulations will go into effect on March 18, 2013.

Previously, school districts were required to obtain parental consent each time they sought access to public benefits or insurance.  The new regulations are designed to ease the administrative burden associated with having to repeatedly obtain parental consent for accessing benefits, while continuing to ensure the confidentiality protections afforded to parents and students under the Family Educational Rights and Privacy Act.  In effect, however, the new regulations should increase the number of students on whose behalf school districts may seek coverage or benefits, thus increasing access to alternative revenue sources.

Under the new regulations, school districts shall no longer be required to obtain separate parental consent each time they seek to access a child’s or parent’s public benefits or insurance.  Instead, school districts may “obtain a one-time written consent from the parent before accessing public benefits or insurance for the first time.”  Under the new regulations, the one-time consent form must specify:

1. The personally identifiable information that may be disclosed (e.g., records or information about the services that may be provided to a particular child).
2. The purpose of the disclosure (e.g., billing for services).
3. The agency to which the disclosure may be made (e.g., Medicaid).
4. A statement that the parent “understands and agrees” that the school district may access the child’s or parent’s public benefits or insurance to pay for services.

In addition, under the new regulations, school districts must satisfy heightened notice requirements if they wish to access insurance or benefits.  More specifically, they must “provide written notification to a child’s parents before accessing the public benefits or insurance for the first time and prior to obtaining the one-time parental consent and annually thereafter.”  This notification must be written in language understandable to the general public and must be provided in the parent’s native language, unless it is clearly not feasible to do so.  Under the new regulations, the parent notification document must include the following information:

1. A statement that parental consent must be obtained before the district discloses, for billing purposes, the student’s personally identifiable information to the agency responsible for administering the state’s public benefits or insurance program.
2. A statement repeating the no-cost provisions set forth in the federal regulations regarding accessing or obtaining public benefits or provisions (e.g., parents shall not incur any out-of-pocket expenses or reduction in benefits if a school district accesses their benefits).
3. A statement that the parents have the right to withdraw their consent to disclose personally identifiable information to the agency administering the public benefits or insurance program at any time. 
4. A statement that the withdrawal of consent to disclose personally identifiable information does not relieve the school district of its responsibility to ensure that all required services are provided at no cost to the parents. 

To ensure compliance with these new rules and to assist school districts in maximizing their access to public benefits and insurance, the United States Department of Education has suggested that each state develop its own model consent form and parental-notification document for use by its school districts.  We, therefore, expect the New York State Education Department to develop such model forms in the near future, along with guidance on how these new rules shall be applied and enforced in New York.  We will continue to provide updates on this topic as new information becomes available.

If you have any questions about the matters in this Legal Alert or any other legal issues, contact Jeffrey Weiss at (716) 200-5141 / jweiss@harrisbeach.com, David Oakes at (585) 419-8727 / doakes@harrisbeach.com, Douglas Gerhardt at (518) 701-2738 / dgerhardt@harrisbeach.com, or Susan Fine at (516) 880-8377 / sefine@harrisbeach.com, or the Harris Beach attorney with whom you usually work.

This alert does not purport to be a substitute for advice of counsel on specific matters.

Harris Beach has offices throughout New York state, including Albany, Buffalo, Ithaca, New York City, Niagara Falls, Rochester, Saratoga Springs, Syracuse, Uniondale, White Plains and Yonkers, as well as New Haven, Connecticut, and Newark, New Jersey.