It used to be anyone’s guess as to how much is “reasonable cost” for a parent to provide health insurance through their employer pursuant to court order under the law. All a parent could do was ask the court to consider their situation on a case by case basis, if they believed they had to pay too much. In theory, the court would look at how much the parent earned and compare it to how much was the cost of the health insurance to add on the child(ren). There was no defined analysis the court was required to perform.
This year the legislature codified what is meant by “reasonable” in an amendment to Family Code section 3751. Now “reasonable cost” means 5% or less of the parent’s gross income. So if a parent earns $5,000.00 per month then the most they can be court ordered to pay each month for medical insurance for their children is $250.00. Further, the code states that this defined “reasonable cost” is a rebuttable presumption. That means that a parent still has the ability to challenge in court the amount he/she must pay for medical insurance for their children by showing that in their case 5% of their gross income is not reasonable.
Given the cost of medical insurance today, it is difficult to imagine a case where 5% of your gross income is the cost of medical insurance. Mostly, it appears that this rule is going to give many parents the ability to argue that they are being required to pay too much for health insurance in these difficult economic times.
For instance, it is not uncommon currently for employees to be asked to contribute anywhere from $500.00 to $750.00 per month for health insurance for the addition of their children on medical insurance. In order for these sums to be considered “reasonable” under the code, the party paying $500.00 would have to earn $10,000.00 per month and the party asked to pay $750.00 would have to earn $15,000.00 per month. Thus, under the new definition of “reasonable” there will not be many parents who will be able to be legally court ordered to pay for health insurance for their children since there gross income to cost of health insurance ratio will not meet the definition of “reasonable.”
It is unclear if there will be a backlash in that many children may go uninsured under this new definition of “reasonable.” However, most parents do their best to meet all the needs of their children if they can possibly afford it. Naturally a parent wants to be able to provide their children with health insurance, unfortunately, sometimes a parent is doing everything they can to meet the more pressing and basic needs of their child(ren).
If you are being court ordered to pay health insurance and the cost is more than 5% of your gross income, come see the family law attorneys at Wallin & Klarich and we can help you address the issue. The experienced family law attorneys at Wallin & Klarich are available to help you in any family law matter. If you or a loved one needs help with a situation such as this, please call Wallin & Klarich today at 714-730-5300.
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