Friday, March 21, 2014

2014 Indiana Child Support Guidelines Amendments - Insurance and Health Costs coverage

21 March 2014

2015 Indiana Child Support Guidelines
review scheduled for public comment

The Domestic Relations Committee [DRC] of the Indiana Judicial Center met in regular session today to discuss the process of revising the Indiana Child Support Guidelines. Dr Betson appeared and presented to the DRC on the particular subject of the Health Costs coverage.

In the year 2008 the federal government issued regulations instructing states that their child support guidelines should address “how parents will provide for the children's health care needs through health insurance coverage” or by providing for the health care costs.

Under the Patient Protection and Affordable Care Act 111-148 and the Health Care and Reconciliation Act 111-152 families are expected to pay between 2% [income <133% of FPL] and 9.5% [income >300% of FPL] of their income for coverage based upon income. Coverage at these levels is based upon a 30% co-pay.

The law divides coverage plans into four categories based upon cost sharing: Platinum 10%; Gold 20%; Silver 30%; and Bronze 40%. As applied to the CSOW this cost sharing – Uninsured Health Care Expense Calculation – allocates the portion of that 10-40% range for each parent. The fee for the coverage is calculated in the CSOW under section 7 which also includes child care expense and parenting time credit.

The Act provides for subsidies based upon income when a Silver or higher plan is purchased. For those earning 100-150% of the FPL their expected cost share is 6% which rises to 30% for those earning over 300% of the FPL. Judicial officers and parents will need to consider the expected medical outlays for the children. If outlays are expected to be high then a Platinum or Gold level plan should be purchased. If outlays are expected to be low then a Silver or Bronze level plan should be purchased although the Bronze is not subsidized.

Judicial officers and parents will also need to consider which parent is defined as the custodial parent for health insurance premium purposes. This may not be the same as what a court orders The IRS defines custodial parent based upon overnights. IRS Form 8332 allows for transfer of the exemption for child to align with the parents agreement or order of the court.

In a Healthy Perspective on Health Care I wrote about the dissonance created when a person who envisions himself as healthy paying for sick care coverage which goes unused. As the cost outlays accrue this dissonance creates sickness in the person experiencing the dissonance as to alleviate that stress. Thus, purchasing coverage causes illness. Those who hold such a belief may be exempt from the law.

The law exempts certain individuals which include those who are;
~ incarcerated, and not awaiting the disposition of charges;
~ a member of a recognized religious sect with religious objections to insurance;
~ not required to file a tax return because their income is too low; and
~ anticipated to spend more than 8% of household income to obtain the lowest-priced coverage available.
Thus, someone who is a Christian Scientist is exempt from the law.

The Indiana Child Support Guidelines, unlike the Obama health tax, does not mandate medical care coverage. As initially stated the feds require that the states provide a mechanism by how the parents will share the cost of providing health insurance coverage. ICSG section 7 provides that the “court shall order one or more parents to provide private health insurance when available to the child at a reasonable cost.” The federal coverage mandate essentially removes the availability clause within Guideline 7 as coverage is available to everyone now. The second and remaining test the becomes “reasonable cost” which is essentially removed by the federal mandate as the subsidy provisions are based upon what is presumed to be a reasonable contribution by policy holders.

In In re: Paternity of S.A. the Indiana Court of Appeals addressed the cost share and reasonableness of coverage fees. This was more recently addressed by the Indiana Supreme Court in Johnson v Johnson last year. The DRC will need to provide guidance to judicial officers on how to calculate the cost of insuring the children based upon the inclusion of the parent in the plan, which plan should be chosen, and the premium subsidy which gets paid directly to the insurer.

Overall, applying the Obama Health Tax plan to the Indiana Child Support Guidelines is going to require a greater examination of available plans, the cost for those and the expected outlays for the children. A new support calculator will likely be generated for this. The most probable method of calculating parents' contribution towards medical care will be actual premium paid.

In conclusion, the ICSG are premised upon the idea that the child should be able to maintain the same standard of living which was experienced or would have been if the parents resided in an intact family. That means that if coverage didn't exist prior to divorce then it does not necessarily need to be provided following. The Obama Tax does allow for a penalty tax to be assessed rather than pay the premiums for a sick care policy.

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©2008, 2014 Stuart Showalter, LLC. Permission is granted to all non-commercial entities to reproduce this article in it's entirety with credit given.

1 comment:

John Mclaughlin said...

It really sounds like Indiana is in interested in having this kind of change happen soon. Something that really is interesting as well is that there are possible changes that are being made to the percentage of the child support that is being payed. Hopefully this is something that can allow for different kinds of situations that allow for the parents to be able to negotiate different percentages as well within their own agreements. Thank you for taking the time to share this information.