How is Health Insurance Calculated in Child Support?

Health insurance is an important consideration in child support calculations. The cost of premiums to cover children on a health insurance plan must be accounted for when determining child support payment amounts. Calculating a child’s portion of health insurance can be complex, as factors like income, custody, number of children, and more come into play. Overall, health insurance premiums are factored into child support determinations according to legal guidelines and methodologies aimed at fairly distributing costs between parents.

Health Insurance in Child Support

When parents divorce or separate, discussions around child support are common. Child support involves periodic payments made from one parent to another to help cover the costs of raising the child. An often overlooked, but critical component in determining appropriate child support is the cost of health insurance for the child.

Accounting for a child’s health insurance in child support calculations can have a significant impact on the total amount of support ordered. The portion of insurance premium attributable to the child must be calculated and then allocated between the parents based on their respective incomes. Failure to consider health insurance expenses may result in inadequate child support that does not fully cover the child’s needs.

Understanding how health insurance premiums factor into child support is important for anyone going through separation or divorce. Furthermore, knowledge of the methodology used to calculate the child’s share of insurance can help ensure a fair and accurate determination of support obligations.

Factors Affecting Health Insurance Calculations in Child Support

Several key factors come into play when incorporating health insurance expenses into child support calculations:

Cost of Insurance Premiums

The starting point is identifying the total cost of health insurance premiums. This may include medical, dental, vision and prescription drug coverage from one or both parents’ employer-sponsored plans or purchased privately. The source, level of coverage, number of dependents covered and total cost of the plan must be determined.

Income of Each Parent

A major factor is the gross income of each parent. Income shares are used to apportion the cost of the child’s health insurance between the parents. So if Dad earns 70% of the total parental income, he would likely pay 70% of the child’s insurance.

Custody Arrangements

The amount of time the child spends with each parent also comes into play. If Mom has primary physical custody, she will likely be carrying the child on her health insurance. In cases of joint physical custody, the insurance costs may be divided 50/50 between parents.

Number of Children Covered

If the health plan covers multiple children, the cost per child will need to be calculated. The proportion of the total premium attributable to the child involved in the support order must be determined. This will be that child’s portion of the insurance cost to factor into support.

Given these variables, the process of accurately calculating the impact of a child’s health insurance on support obligations can be complicated. However, following established methodologies can help ensure a fair outcome.

Methodology for Calculating Health Insurance in Child Support

Generally, there is a step-by-step process followed to determine the portion of health insurance expense to include when calculating child support:

1. Obtain the full insurance premium cost – Gather documentation detailing the total premium for the health plan covering the child. This usually requires getting the annual premium schedule from the insurance provider or employer human resources department.
2. Determine cost per dependent – For family plans covering multiple dependents, determine the cost per child. Often, the employee’s cost for individual coverage is subtracted from the total family premium to get the cost for the additional dependents. This total dependent cost is then divided by the number of covered dependents to reach the cost per child.
3. Factor in parent’s income – Based on statutory guidelines, each parent’s income share of the total combined parental income is used to allocate the cost of insurance between the parents. If Dad earns 75% of total income, he would pay 75% of the child’s insurance cost.
4. Adjust support obligation – Finally, each parent’s share of the child’s health insurance cost is deducted from the basic child support obligation calculated based on their income.

“The child’s portion of health insurance premium is calculated by obtaining the client’s annual premium schedule, typically from the client’s Human Resources department. The amount is then divided between the parents based on their income shares, and the respective amounts are included in determining each parent’s adjusted support obligation.”

This standardized methodology allows for an impartial and consistent determination of how much health insurance impacts child support payments between separating parents.

Legal Provisions and Guidelines

A web of laws and regulations at both the state and federal levels govern how health insurance factors into child support calculations:

• Affordable Care Act – Requires employer health plans that cover dependents to make coverage available to children up to age 26 of employees who are divorced, separated, or never married. This expanded options for health plan coverage for dependent children.
• State statutes – Most states have laws specifying that the cost of health insurance coverage for a child must be accounted for in setting child support obligations. These laws outline how insurance costs are to be calculated and divided.
• Child support guidelines – State child support guidelines, which are based on the income shares model, address how to adjust support obligations when a parent is carrying the child on their health insurance. The methodology explained above is generally prescribed in state guidelines.
• Court discretion – While following standard methodologies, courts still have some discretion in allocating insurance expenses between parents based on factors like income disparity and custody arrangements. The goal is a fair apportionment of costs.

Complying with applicable laws and regulations is essential for correctly incorporating health insurance expenses into child support calculations. This helps guarantee support orders adequately cover all costs associated with raising a child.

Impact of Health Insurance on Child Support Payments

Adding health insurance premium costs into the child support equation can have a direct impact on the actual payment amounts:

• Raised obligations – If the custodial parent carries the child on their health plan, the non-custodial parent will typically pay their income share of the insurance premium cost on top of their basic support obligation. So the non-custodial parent’s payment is increased.
• Lower obligations – When each parent covers the child during their respective custodial time, insurance costs are typically split evenly. Each parent’s half of the premium cost is deducted from their standard support payment. So the overall payment is lowered.
• Shared expenses – With joint physical custody, insurance costs are often divided proportionately based on custodial time and income shares. Each parent pays their portion of the costs separately rather than adjust support payments.
• Custody impacts – The more custodial time a parent has, the more they typically pay in premiums and the less in support payments. So custody arrangements directly influence financial impacts.
• Uninsured expenses – When a child is uninsured, medical expenses are usually split based on income shares. The uninsured party covers their percentage of costs.

“In one example, Mom pays $100 per month to cover a child on her health plan. Dad earns 60% of the income, so he pays Mom $60 per month for the child’s insurance on top of his regular support payment.”

Proper accounting of insurance premiums can significantly alter the net amount of child support paid or received. Both parents should understand these potential impacts when agreeing to support terms.

Recent Changes and Considerations

As health insurance offerings have evolved, some new factors merit consideration:

• Insurance definitions – Many state laws have expanded the definition of health insurance for child support purposes. Specifically, “health insurance” now includes medical, dental, vision and prescription drug coverage.

“Specifically, ‘health insurance’ now includes medical, dental, and vision insurance, and prescription drug coverage.”

• HDHP and HSA plans – The rise in consumer-directed High Deductible Health Plans with Health Savings Accounts requires new calculations around how deductibles and co-pays factor in.
• Managed care restrictions – Limitations imposed by managed care plans, like provider networks and service pre-authorizations, should be considered when ordering a parent to obtain coverage.
• Unreimbursed costs – Determining how unreimbursed medical expenses will be handled between parents is important, especially with HDHPs.
• Domestic partner coverage – If a parent’s unmarried partner is covered on their health plan, that portion of the premium should be excluded from the child’s cost calculation.

Staying on top of evolving insurance offerings and plan types allows for the most accurate determination of the portion of premium costs attributed to the child in a support case.

Conclusion

Health insurance is clearly an integral factor that must be carefully addressed when establishing child support payment obligations between parents. Calculating the portion of insurance premium costs allocated to the child, and properly attributing those costs between parents based on income and custody time, can have a meaningful impact on resulting support payment amounts.

Following a standard methodology as prescribed by law ensures consistency and fairness in calculating health insurance costs. But flexibility based on case circumstances may still be required for an equitable outcome. Knowledge of the legal provisions, standardized procedures, and potential impacts of health insurance can empower parents to agree on a child support arrangement that truly meets their child’s needs.

FAQs

1. How is the cost of health insurance premiums determined in child support cases?

The total cost of the health insurance premium covering the child is obtained, usually from the insurance provider or employer. For family plans covering multiple dependents, the cost per child is calculated by subtracting the employee’s individual premium from the total and dividing the balance by the number of covered dependents.

2. How are health insurance premiums divided between parents?

The portion of the health insurance premium attributed to the child is divided between the parents pro rata based on their respective incomes. For example, if the father earns 70% of the combined parental income, he would pay 70% of the child’s health insurance costs.

3. Does the custody arrangement impact who pays for health insurance?

Yes, the amount of custodial time each parent has with the child will influence who pays what portion of insurance costs. The parent who has primary custody will likely carry the child on their health plan and the other parent will contribute their pro rata share of premiums based on income.

4. How are health insurance expenses handled for joint physical custody?

With equal custody time, health insurance costs are typically divided evenly between the parents. Each parent pays 50% of the child’s insurance premium separately rather than adjusting support payments.

5. Can carrying a child on health insurance lower child support payments?

Yes, when a parent has the child on their health plan, their share of the insurance premium cost can be deducted from their basic child support obligation. So the amount they owe in support is reduced.

6. Does the income share model apply to health insurance expenses?

Yes, the income shares approach used to calculate basic child support is also used to allocate the portion of health insurance premium costs attributed to the child between the parents.

7. What if one parent’s significant other is on their health plan?

Any portion of the premium that covers a parent’s domestic partner should be excluded when determining the part of the cost that applies to the child involved in the support order.

8. Can changes in health insurance impact modifying child support orders?

Yes, increased premiums or loss of coverage can constitute a substantial change in circumstances allowing for modification of child support to adjust for new insurance costs.

9. What if one parent fails to maintain health coverage as ordered?

The other parent can obtain coverage and may be entitled to a credit against their support obligation for premiums paid or reimbursement of medical expenses paid out-of-pocket.

10. How are unreimbursed medical expenses handled if a child is uninsured?

For uninsured children, non-reimbursed medical costs are typically allocated between the parents pro rata based on their respective incomes under the income shares approach.