Division of medical expenses is always a big issue for our clients. Generally, the issue of coverage and insurance premiums is included in child support calculations because the party who provides insurance coverage is entitled to credit for the weekly amount paid. Therefore, the biggest remaining issue between parents is how to divide uninsured medical expenses for the children. When parties can agree, they have the ability to be flexible about how they want to divide these expenses, and there are many good reasons why parties would want to tailor the way they divide these expenses to their specific situation. In some cases, one party has supplemental coverage, a Health Savings Account, Flex Spending account, or other employer benefits that make sense to exhaust before dividing expenses between parties. Parents of children with specific medical issues may also need to specifically plan how uninsured expenses will be divided throughout the year.
When parents cannot agree or do not believe their case requires special accommodations, we advise clients of the 6% Rule, which is how the Indiana Child Support Guidelines ICSG suggest dividing uninsured medical expenses. While there is no guarantee that a judge would order parties to divide uninsured expenses pursuant to the 6% Rule, it is a generally accepted method and endorsed by the ICSG. Therefore, there is a good chance that a party’s judge is familiar with the rule and frequently implements it in his/her child support orders. Per the 6% Rule, the parent who is assigned to pay controlled expenses, usually the custodial parent and the one receiving child support, is required to pay an initial portion of ordinary uninsured health care expenses. The theory behind this is that the parent who is receiving child support can use a percentage of the support toward ordinary uninsured health care expenses. Therefore, the parent who is assigned to pay controlled expenses is expected to pay uninsured medical expenses up to 6% of the annual basic child support obligation, which can be calculated from the parties’ completed child support worksheet. Beyond that, the parties divide any additional uninsured medical expenses pursuant to their pro rata shares of the parties’ total gross income, which is also listed on the parties’ completed worksheet.
One major caution we always have for clients who follow the 6% Rule is the importance of good record-keeping. As with any other co-parenting issue, parties have to exchange information, billing statements, and receipts in order to determine if one parent has met his/her 6% threshold and how bills should be divided. Without a proper exchange of information and accurate record keeping, it can be difficult for an attorney to help resolve a payment dispute under this rule.