Health care coverage

Written on July 8, 2004 by David C. Sarnacki

2004 Michigan Child Support Formula Manual (effective October 1, 2004):
3.07 (B) Health Care Coverage
(1) Responsibility to Insure
(a) The law directs that, if a child support order is entered, the court must make one or both parents responsible to obtain or maintain health care coverage for the benefit of the parents� children that is available at a reasonable cost as a benefit of employment. Further, if a parent is self-employed and maintains health care coverage, the court must order the parent to obtain or maintain dependent coverage for the benefit of the children. MCL 552.605a(2).
(b) Many factors may be used in determining whether one or both parents should maintain employer, group, or private insurance coverage for minor children. When comparing plans, consider factors like:
accessibility and comprehensiveness of included services, likely continuation of coverage, affordability of deductibles and copayments (split as ordinary expenses, Subsection 3.07(C)), and reasonableness of the cost of coverage (Subsection 3.07(B)(3)).
(c) Michigan law requires that orders of dependent health care coverage contain qualified medical child support order information. MCL 552.626b. Qualified medical child support orders must clearly specify: the name and the last known mailing address of the participant (providing parent), the name and mailing address of each child covered by the order, the name and mailing address of each child�s custodial parent (except the order may provide that the name and mailing address of an official substituted for the address of any child or custodian), a reasonable description of the type of coverage to be provided to each child or the manner in which the types of coverage is to be determined, and the period to which such order applies. 29 USC 1169.
(2) Reasonable Cost of Coverage
(a) A reasonable cost for providing private health care coverage does not exceed five percent of the gross income of the providing parent.
(b) Parents with a net income below 133 percent of the federal poverty level ($1,032) or whose resident child is covered by Medicaid based on that parent�s income should not be ordered to contribute toward or provide private coverage, unless private coverage is obtainable without employee contribution.
(c) A providing parent�s costs for private health care coverage are unreasonable if the parent�s total share of child support, child care, ordinary health care expenses, and net share of health care insurance (not including arrearage payments) exceed 50% of the parent’s net income as defined in the Michigan Child Support Formula Manual.
(3) Allocation of Premiums
(a) The net determinable portion of health insurance premiums paid by the parents for children eligible for support in this case should be apportioned between the parents according to their incomes.
(b) The net premium amount should be included as part of the support payment.
(c) Calculate the allocation of premiums according to the following steps.
Step 1: Determine the portion of each parent�s net health care premium attributable to the children.
a. If the parent is included on the coverage, use the children�s portion of the premium as represented in the difference in cost between single and family coverage. If the policy does not include single coverage or if the parent is not included, use the entire premium.
b. Divide the children�s portion of the premium by the number of individuals covered (excluding the parent if single coverage was subtracted in Step 1 a), and multiply by the number of children covered in this case.
Step 2: Determine the children�s monthly premium that each parent pays, by dividing each parent�s annual premium costs by 12.
Step 3 Offset the two amounts. Record the support payee�s premium payment as a positive number and the other parent�s premium payment as a negative number; then add the two amounts together. (Note: A positive result means an additional amount will be paid to cover the custodian�s premium and a negative
result means less money will be paid as support to offset the payee�s portion of the premium).
Step 4: Determine the payer�s portion of the premium payment amount by multiplying the offset amount by the payer�s percentage of family income (according to Subsection 3.07(A)(5) and rounding to the nearest cent.
Step 5: Add the payer�s portion of the premium amount, whether positive or negative, to the base support obligation calculated in Sections 3.01 - 3.05.

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