Uninsured Medical Expenses and Co-parenting

Uninsured Medical Expenses and Co-parenting

Indiana’s 6% Rule

Co-parenting after a divorce can bring frustrations and challenges, even when a split is fairly amicable. The circumstance usually requires patience and tons of open communication, both between exes and kids. But another critical component is knowing the law and common legal practices. Understanding your rights and how best to protect your family’s interests can mean the difference between a tenuous situation and a downright awful one.

Solid settlement agreements and divorce decrees usually spell out child support arrangements in great detail. But not all items are addressed in these legal documents, sometimes bringing confusion around who is supposed to pay for what. Expenses like clothes, school supplies, extracurricular needs, and uninsured medical expenses tend to be a gray area. Luckily, there are some legal guidelines in place to clear up some of the perplexities.

Health insurance coverage and premiums are usually stated clearly in custody documents, but when it comes to uninsured medical expenses, who’s responsible? Sometimes parents can agree on an arrangement or division that works for them, taking into account who has the higher income, FSAs/HSAs, or better insurance. But other times the courts need to get involved. That’s where Indiana’s 6% rule can come into play.

What is the Indiana Child Support Guidelines 6% Rule?

While referred to as a “rule,” the Indiana Child Support Guidelines (ICSG)’s 6% Rule is more like a guideline than anything else. The ICSG created this guideline as a court recommendation for how to divide children’s uninsured medical expenses between parents. Some judges regularly follow this protocol when handling these types of cases, others do not.

With the 6% Rule, both parties are obligated to pay part of any expenses that fall into the uninsured category. This might include things like:

  • Any and all medical expenses for an uninsured child
  • Expenses insurance companies deny
  • Uninsured dental or vision expenses
  • Co-pays for doctor visits or prescriptions
  • Deductible payments
  • Non-prescription, health-related items
  • Counseling, therapy, or psychological treatment
  • Orthodontic work

The 6% Rule requires the custodial parent to be the first to pay any uninsured expenses. That’s because the guideline assumes that support checks from the non-custodial parent include a pre-payment of sorts for these types of expenses. The custodial parent is expected to pay 6% of the annual basic child support obligation (calculated from the annual support worksheet) in uninsured medical expenses before seeking financial help from the other parent.

After the 6% portion has been paid by the custodial parent, the remaining expenses are usually divided up between the parties by taking their individual total gross incomes into consideration. Other times they are split 50/50, depending on the specific situation and the judge involved.

Why You Need to Document Everything

In an ideal world, ex-spouses are able to come to an agreement around financial issues involving their kids. But we all know it doesn’t always go this way. And sometimes leaning on the legal system for help is the best way to resolve problems. Experienced family law attorneys can often bring resolution outside of the courts. Other times, motions need to be filed or hearings scheduled. Either way, having solid documentation can be your best bet for a positive outcome.

It’s essential to keep excellent records when it comes to co-parenting, even if you don’t think issues between you and your ex will arise. Arming yourself with expense-related records like these can make all the difference:

  • Any and all communications (to and from your ex, medical professionals, insurance companies, etc.)
  • Certified mail receipts/delivery confirmations
  • Related emails, letters, text messages
  • Proof of payments
  • Billing statements
  • Itemized receipts
  • Insurance paperwork (e.g. EOBs)

If there ends up being any type of dispute, this documentation will prove critical. Consider setting up a spreadsheet to track these items as you go. Or try using a smartphone co-parenting app to scan receipts, log communications, and share info. And if the time comes where you need an advocate, hire a family law attorney to help. We’re here if and when you need us. Reach out to Cecelia Neihouser Harper at 765-637-9175 for guidance.

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