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Health Insurance premiums and CS calculation

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What is the name of your state (only U.S. law)? Minnesota
First, please let me know if this is more appropriate for the Health Ins forum--it crosses both lines but possibly could affect CS, so I posted here.

Does the State of MN figure health insurance premium paid by the parent for their own health insurance into the child support calculation? I didn’t see it on the online calculator. Here is a scenario we are dealing with in the health insurance industry—I am interested in your opinion on this or what you think would happen in front of a judge. Also, this has nothing to do with ACA subsidies, just straight up individual policies.

Many small groups are moving away from offering a group health plan to their employees and are considering individual policies instead. Employers can’t pay by invoice on an individual policy but would just give the employee additional money to pay for their own insurance, so it would be compensation. But, they would require ‘proof’ that the money is going to pay for the health ins, not just spent at will. Say a person’s boss gives them 500/month for health ins (in this example, the cost of a single person is $500), it looks like a $6000 yearly increase in income, but it is specifically designated for health ins. If the employee does not keep the insurance, they do not get the extra money. How would this figure into CS? Would a judge consider that gross income and could child support possibly go up even though there are stipulations on the money?
 


Zigner

Senior Member, Non-Attorney
What is the name of your state (only U.S. law)? Minnesota
First, please let me know if this is more appropriate for the Health Ins forum--it crosses both lines but possibly could affect CS, so I posted here.

Does the State of MN figure health insurance premium paid by the parent for their own health insurance into the child support calculation? I didn’t see it on the online calculator. Here is a scenario we are dealing with in the health insurance industry—I am interested in your opinion on this or what you think would happen in front of a judge. Also, this has nothing to do with ACA subsidies, just straight up individual policies.

Many small groups are moving away from offering a group health plan to their employees and are considering individual policies instead. Employers can’t pay by invoice on an individual policy but would just give the employee additional money to pay for their own insurance, so it would be compensation. But, they would require ‘proof’ that the money is going to pay for the health ins, not just spent at will. Say a person’s boss gives them 500/month for health ins (in this example, the cost of a single person is $500), it looks like a $6000 yearly increase in income, but it is specifically designated for health ins. If the employee does not keep the insurance, they do not get the extra money. How would this figure into CS? Would a judge consider that gross income and could child support possibly go up even though there are stipulations on the money?
I'm sorry - do you have a specific legal matter you are dealing with? This seems like a purely hypothetical question...
 
I'm sorry - do you have a specific legal matter you are dealing with? This seems like a purely hypothetical question...
I guess it is a possible scenario, but I am still interested in an answer. I am an insurance agent, one of my groups is wanting to drop their small Group policy and put all employees on Individual policies and just give them the money to pay for it. Could this affect members that pay child support because of the way CS is calculated in MN or would a judge subtract that from gross income because it is specifically for insurance premiums. I am just trying to do my due diligence for my client.
 

LdiJ

Senior Member
I guess it is a possible scenario, but I am still interested in an answer. I am an insurance agent, one of my groups is wanting to drop their small Group policy and put all employees on Individual policies and just give them the money to pay for it. Could this affect members that pay child support because of the way CS is calculated in MN or would a judge subtract that from gross income because it is specifically for insurance premiums. I am just trying to do my due diligence for my client.
Yes it could, at least in the short term. Eventually the laws on child support are going to have to adjust to take in all of the ramifications of Obamacare (and this is an Obamacare issue even if it does not appears so at the moment). Once everyone is forced to have insurance or pay high tax penalties, state legislatures really will have no choice but to adjust child support calculations.

I am also not surprised that employers are leaning this way. Now that employers are required to report the cost of employee health insurance on their W2s, its very clear that employer based insurance is unbelievably expensive. I see many somewhat low income people whose insurance cost is equal to or greater than their annual wages, and many moderate income families where the cost is 1/2 or better than their annual wages. In many cases people could buy individual polices that are decent, for far less than their employers group plans.

Just yesterday I saw a W2 that showed 5k of income, with 8k of insurance cost. That one is obviously extreme, but it was real. The system is going to have to adjust. It will take some years for it to happen, but it WILL have to adjust.
 
Thank you LdiJ!

There used to be a member that was in MN Child support....CSO? Is she still around? (I am an avid lurker, but rarely post)
 

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