Understanding Child Support – Part 3
Unreimbursed Medical Expenses Included In Child Support
There are a lot of issues that arise when parties make the decision to separate or divorce. While parties try to face the emotional obstacles that come with separating or a divorce, it is difficult to fully grasp all of the intricacies of child support.
Even years after a divorce, some people still struggle to recognize (or remember) what is included in child support and what can be included in the future. The person paying support always seems to think there is a reason to have the obligation reduced and the person receiving support always seems to think there are “new” or “additional” expenses that weren’t originally included in child support.
However, keep in mind, that anything described in these articles summarizes the contents of the “Considerations in the Use of Child Support Guidelines,” contained in Appendix IX-A of the Rules of Court. Therefore, these articles discuss the issues of the average family. If there is any type of formal agreement between parties or a Court Order, which states something other than what is described, that agreement or Court Order would take precedence.
This article is the third of a three-part series and focuses on one of the most unnecessarily contentious issues surrounding payment of child support: unreimbursed medical expenses and medical insurance premium payments.
Medical Insurance Premium
The expense a parent incurs by including a child or children on health insurance coverage is not included in basic child support obligation. However, the additional cost associated with including a child on your health insurance is taken into account when calculating child support.
In order to ensure that this is properly included in the child support guidelines calculation, the person that covers the child or children under their medical insurance will need to submit documentation of the premium payment (usually easily ascertainable from paystubs if you have medical insurance through your employer).
However, if you pay for your medical insurance for your child or children, you will need to provide documentation on the cost of the premium for an individual (i.e. you) and the additional cost that is associated with having a child or children on the same medical insurance plan. If you only submit your paystubs (or premium payment) that show the cost for you and the children, that will not be sufficient documentation. Clients should contact their HR department or office manager. The person who handles your health insurance (either through employment or even through a third party vendor) should be able to tell you how much medical insurance would cost for an individual person and how much additional is being paid for the coverage of the children. The additional cost to cover the children under the medical insurance plan is included in the child support guidelines (i.e. you receive a credit for the payment being made on the children’s behalf). You cannot include the entire cost of the premium as it includes the cost associated with covering the individual (i.e. the parent covering the child/children).
Unreimbursed Medical Expenses
Appendix IX-A §8 delineates the expenses that make up a child support obligation and includes “The FIRST $250 of unreimbursed medical expenses.” This concept is common knowledge for the attorneys who practice family law in New Jersey but is often something that parents do not fully conceptualize when calculating, paying and/or collecting support. How child support awards (Appendix IX-F) are calculated and set based on the average spending of a variety of families in different socioeconomic situations is discussed in Part I of Let’s Talk About Child Support. On average, most families spend at least $250 PER CHILD PER YEAR on unreimbursed medical expenses. As a result, that initial $250.00 spent on a child for prescriptions, non-prescription medications, copays, deductibles, splints, urgent care, vaccinations, flu shots, crutches, bandages, ice-packs, etc. is included in the child support award set forth by the child support guidelines.
This means, if you are collecting child support, you ARE responsible for the first $250.00 of unreimbursed medical expenses PER CHILD PER YEAR because it is already factored into the support you are receiving.
This also means that if you are the one who is paying child support, you are not responsible for ONLY THE FIRST $250.00 PER CHILD PER YEAR.
Another important word that needs to be emphasized is “Unreimbursed.” If you are lucky enough to have medical insurance that actually reimburses you for some of your expenses, then that expense cannot be included as a medical expense (as you are getting reimbursed). (As a practical matter, expenses which are reimbursed are also not included in the calculation of your medical expenses for the year that you claim on your tax returns, so it is wise to keep track of how much you are reimbursed v. how much you are not reimbursed.)
The main problem that arises from unreimbursed medical expenses is that parties fail to stay on the same page when it comes to their children’s expenses. This is difficult when two people have an acrimonious past. Parties who have divorced often want to have as little interaction with the other party as possible. The guidelines below are meant to assist parents in keeping track of unreimbursed medical expenses incurred on behalf of children.
How to Handle Unreimbursed Medical Expenses
If you are seeking reimbursement for medical expenses, you cannot simply state ,“You owe me $400.00 for Britney’s medical expenses.” First, you will need to show that you already incurred $250.00 in expenses on behalf of Britney (or you may just get a check for $150.00). The same applies to the parent who is paying child support. You cannot simply seek reimbursement for any and every medical expense under the assumption that since you are paying child support, a medical expense is part of the initial $250.00 of unreimbursed medical expenses and that you should be reimbursed. In order to avoid unnecessary litigation, here are a few tips on how to handle the medical expenses of children, which apply to both the parties receiving child support and for those who are paying child support.
Keep All Documentation
As previously explained, the initial $250.00 included in child support pertains to unreimbursed medical expenses per child per year. Therefore, you must keep copies of all records that are submitted to health insurance for reimbursement. By keeping copies of your claims for reimbursement, you will easily be able to decipher when a claim was submitted, if you received reimbursement and, if any reimbursement is received, whether it was partial or fully reimbursed.
In addition to keeping copies of all claims for reimbursement, you should also keep copies of all receipts for any expenses incurred on behalf of your child. If you pay a co-pay and you do not receive a receipt, then make sure you keep copies of the credit card statement which shows the co-pay, or you keep a copy of the canceled check.
Record Expenses in Categories
To ensure that you are keeping track of unreimbursed medical expenses, you should keep a spreadsheet or log of all expenses. When recording expenses incurred on behalf of your child, make sure that you separate the expenses by the child and by the year. It is very easy to get lost in a pile of receipts when you are handling medical expenses for several children over the course of several years. Therefore, make sure you have a log or spreadsheet for each child and for each year.
If you are submitting claims to your insurance carrier seeking reimbursement, it is wise to keep track of dates of submissions. This will help you keep track of the amount you are seeking for reimbursement and how much you were reimbursed, if at all. (This will also be helpful to you when you are filing your tax returns.)
By recording all medical expenses incurred on behalf of your child, it will be easy to determine when you have paid more than $250.00 of medical expenses.
Communication & Notification
When it comes to your children, their parents should keep each other aware of any health-related issues involving their children. However, if there is a no contact order or any type of provision that prohibits you from contacting your former significant other, then you should not be sending them information regarding medical expenses (although you are free to do this through your attorney).
If at all possible, maintain ongoing communication with the other party when it comes to your children’s medical expenses. Keeping a log of expenses is vital to any request for reimbursement of medical expenses. If you are successfully keeping a log of expenses incurred on behalf of your child then you have the option of making this log accessible to the other party (through Google Sheets or some alternative). By keeping an updated log of unreimbursed medical expenses that both parties can access, there can be no dispute on whether or not the initial $250.00 per child per year has already been incurred by the custodial parent. However, a log alone will not be sufficient. If there are claims for reimbursement submitted to insurance, then copies of those submissions (and copies of checks for reimbursement) should be submitted to the other party (either on your own or through the use of attorney if there is a prohibition against contact).
In addition to submitting copies of bills and claims to the other party, it is incredibly important to timely notify the other party of any expense incurred. All too often parties with years of unreimbursed medical expenses seek contribution from a former significant other. When these requests are submitted to a Court, a judge will often not look favorably on the party who has harbored the request for years. Additionally, when you are not promptly notifying the other party of the expense, it is that much more difficult for you to decipher whether the initial $250.00 of unreimbursed medical expenses per child per year were already incurred by the custodial parent. To make your life easier, regardless if you are paying or receiving child support, timely notifying the other party of medical expenses is imperative.
Wise attorneys will ensure that there is some type of provision regarding notice in a Property Settlement Agreement and/or a pendente lite Order. However, if there is no provision regarding how often you need to submit bills to the other party, then make an effort to submit bills on a regular basis (whether it be monthly or every three months). By timely notifying the other party of medical expenses, you will be securing your claim to such reimbursement.
Although the tips above are designed to help parents handle ongoing medical expenses incurred by the average family, handling children’s medical expenses may be too daunting for parties that are already undergoing a huge life-altering change, such as divorce. Therefore, if you need assistance in seeking reimbursement for medical expenses, you should contact our New Jersey family lawyers as we will be able to make that request on your behalf.