How to calculate health insurance premium for child support

 

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How to calculate health insurance premium for child support


Your child deserves access to high-quality healthcare, which can be achieved by including health insurance in their child support agreement. Understanding how premiums for health insurance are calculated can be confusing; this article will guide you through the process so that you make educated decisions regarding your child's medical care.

Understanding Health Insurance Premiums

Before we dive in to how to calculate your premiums for health insurance coverage, let us first define them. A health insurance premium is the monthly amount paid to maintain coverage under a policy; this payment usually goes to either the insurer or employee and can be broken up into two parts: employer contribution and employee contribution.


Employer contributions refer to your employer's contribution towards the premium for health insurance coverage. In many cases, non-custodial parents pay the majority of premiums for family coverage.

Step 1: Calculate the Total Cost of Insurance Premium

To start, determine your health insurance premium cost. This includes employer and employee contributions - this information can be obtained from either your health insurer or employer's Human Resources department.

Step 2: Calculate the Non Custodial Parent's Share of Premium

Once you have calculated the premium's total cost, calculate what share is paid by the non-custodial parent. Usually, using their income percentage as a guideline, this figure should equal approximately 25%.
If the income of a non-custodial parent is 40%, they would have to cover 40% of the premium for health insurance.

Step 3: Subtract the Custodial Parent's Share

Subtract the custodial parent's share from that of non-custodial parents based on how much income the custodial parent makes. This amount usually equals 100%.
If the custodial parent earns 60%, they would have to cover 60% of the premium for health insurance while the non-custodial parent would receive a share of 60%.

Step 4: Calculate Your Monthly Premium

Calculating a monthly premium is the last step. Divide the share of premium paid by 12 for non-custodial parents.If a non-custodial parent pays $300 per month toward insurance for their child, then the monthly premium would be $25 ($300 divided by 12).
Factors Affecting Health Insurance Premiums
It is essential to remember that health insurance premiums may vary based on a variety of factors.

Type of plan (HMO, PPO or EPO).Coverage level (bronze, silver or gold, platinum).

Maximum out-of-pocket and deductible amounts allocated in each plan; location where it will be offered and child's age/health condition.
These factors could influence the cost of health insurance, in turn affecting the share of non-custodial parents in terms of payments.

Conclusion

Calculating child support health insurance premiums can be a complicated task, but it's an essential step in guaranteeing your children receive quality healthcare. Use the following formula to calculate the premium for non-custodial parents and make informed decisions regarding your child's healthcare.