Legistlative Alert: Important Health Insurance Coverage Amendments Effective January 1, 2011
Family law practitioners are well aware of the importance of continuing health care coverage for children not only during the dissolution process but through emancipation Today, many people out of work and don’t have health insurance as an employee benefit. Health care coverage must be given great care and attention during the pendency of the proceedings in both temporary child support orders and when drafting your marital settlement agreement. Under the current Family Code, the Court is required to order either parent or both to provide health insurance coverage. Under existing law, health insurance is rebuttably presumed to be reasonable in cost as employment-related or other group coverage.
Family Code Section 3751 relates to the maintenance of health coverage and its associated costs. The amendment to this Section requires the court to look beyond the employee coverage and its related costs. The Court now must determine if the cost of coverage exceeds more than 5% of the supporting party’s gross income unless a lowincome adjustment is applicable. Should a low income adjustment be applicable, the Court would be required to determine that the cost of the health care coverage is reasonable and would not impose an undue financial burden or be inappropriate under the circumstances. Keep in mind that a low income adjustment applies presumptively when a party’s net monthly income is less than $1,000 a month. See Family Code section 4055(b) (7)
Family Code Section 4063 addresses the issue of uninsured health care costs and payment procedures. Under the existing law, when either parent uses a health care provider other than the preferred provider, reimbursement is limited to the differential in cost between what the preferred provider would have covered and paid and the actual cost incurred by the party going outside the network. When a Motion is filed for reimbursement, the Court is required to consider the geographical access and reasonable availability of necessary health care for the child that complies with the health care insurance paid by either parent pursuant to court order. Section 4063 (g) (1) has been amended and requires the Court to apply a rebuttable presumption that the health care is accessible if the medical services are within a 50 mile range of the residence of the supported child. Under this amendment, the Court is also mandated to state the reason on the record should it be determined that health insurance was not accessible within this 50 mile radius.
The importance of these amendments to the Family Code relating to health care costs cannot be ignored. The legislature response in looking at the actual and rising costs of health insurance is constructive and realistic. The financial burden is part and parcel of any child support order. We have a responsibility to inform and advise our clients of this threshold 5% and its implications to sharing of health costs for both parents. We also have an obligation to inform our clients in writing that going outside of network even for emergency services outside a 50 mile range from current coverage may bar recovery for reimbursement. The mantra for all family law practitioners is that clients must “stay within the network” and not go beyond the 50 mile range.