The Basics of Child Support and Health Insurance

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Is There Any Insurance?

While there are some exceptions, when a parent has insurance that is “currently available . . . at a reasonable cost” the court is required to “order either parent to obtain and maintain medical health insurance coverage.” When is insurance available at a reasonable cost?

The 2015 NC Child Support Guidelines were just amended by Session Law 2015-220. The new law says health insurance is “. . . considered reasonable in cost if the coverage for the child is available at a cost to the parent that does not exceed five percent (5%) of the parent’s gross income. In applying this standard, the cost is the cost of (i) adding the child to the parent’s existing coverage, (ii) child-only coverage, or (iii) if new coverage must be obtained, the difference between the cost of self-only and family coverage.”  If health insurance is not available, the court must require parents to provide it when and if it becomes available. Although there is no specific mention of vision insurance in the Guidelines, the court may require a parent to provide dental insurance.

How Does Insurance Change Support?

In North Carolina, the Child Support Guidelines start with the gross incomes of parents, before any taxes or other payroll deductions, to determine the child support obligation. Then, the support obligation is adjusted to account for payment of work-related child care and/or health insurance. When parents (or their spouses) pay premiums for a child’s coverage, that parent is credited and the amount of support is adjusted accordingly.  It is not a dollar for dollar credit, which means it is essentially prorated between the parents so they are sharing the cost.

How Much is Credited to the Parent?

A parent is entitled to a health insurance credit only for the cost to cover the child or children. When a parent has a family insurance policy, it is important to obtain an itemization of the premium cost.  For example, if a family insurance plan is $300 per month, and the cost to cover only the employee is $100 per month, the amount credited for the children would be $200 per month.  If no itemization is available, the cost is divided by the number of people covered by the plan.  The insurance premium is often paid by payroll deduction.  Note that if a parent’s employer pays the health insurance premium directly to the insurer on behalf of the parent, the parent receives no credit because he or she has not paid anything for it. But, it is not considered as income for child support purposes.