Changes in Alabama Child Support – “Cash Medical Support”

Thanks to Noah Funderburg at the University of Alabama College of Law for spotting this one and passing word of it around. The Alabama Supreme Court has amended the provision governing Alabama child support to provide more flexible options for health coverage for Alabama children.

Basically, these changes are required to make sure Alabama is in compliance with federal statutes. The changes to Alabama Rule of Judicial Administration 32 take effect March 1, 2009 for all cases filed on or after that date.

The first change is to Rule 32(A)(4), and I’ve marked the new language: “Health care needs. All orders establishing or modifying child support shall, at a minimum, provide for the children’s health care needs through health insurance coverage, through cash medical support, or other means. Normally, health insurance covering the children should be required if it is available to either parent through his or her employment or pursuant to any other group plan at a reasonable cost and is accessible to the children.”

The next change is an expanded and significantly revised section on Definitions, Rule 32(B)(7):

(7) Health-Insurance Coverage/Cash Medical Support.

(a) Medical support in the form of health-insurance coverage and/or cash medical support shall be ordered provided that health-insurance coverage is available to either parent at a reasonable cost and/or cash medical support is considered reasonable in cost.  The health-insurance coverage must be “accessible” to the children, as that term is defined in subsection (c).

(b) Cash medical support may be ordered in addition to health-insurance coverage.  Cash medical support does not have to be a stand-alone amount.  Cash medical support for uninsured medical expenses can be allocated between the parents.

(c) Definitions.

(1) Cash Medical Support.  Cash medical support is an amount ordered to be paid toward the cost of health insurance provided by a public entity or by another parent through employment or otherwise, or for other medical costs not covered by insurance.

(2) Health Insurance.  Health insurance includes the fee for service, health-maintenance organization, preferred-provider organization, and other types of coverage that is available to either parent, under which medical services could be provided to the dependent children.

(3) Reasonable Cost.  Cash medical support or the cost of private health insurance is considered reasonable in cost if the cost to the parent responsible for providing medical support does not exceed 10% of his or her gross income.  For purposes of applying the 10% standard, the cost is the cost of adding the child or children to existing coverage or the difference between self-only and family coverage, whichever is greater.

(4) Accessible.  Health-insurance coverage shall be deemed “accessible” if ordinary medical care is available to the children within a 100-mile radius of their residence.
(d) The actual cost of a premium to provide health-insurance benefits for the children shall be added to the “basic child-support obligation” and shall be divided between the parents in proportion to their adjusted gross income in the percentages indicated on the Child-Support Guidelines form (Form CS-42).

(e) The amount to be added to the “basic child-support obligation” shall be the actual amount of the total insurance premium for family/dependent coverage, regardless of whether all children covered are in the same family.

(f) After the “total child-support obligation” is calculated and divided between the parents in proportion to their “monthly adjusted gross income,” the amount added pursuant to subsection (e) shall be deducted from the obligor’s share of the total child-support obligation, provided the obligor actually pays the premium.  If the obligee is actually paying the premium, no further adjustment is necessary.

(g) If, at any time while a child-support order providing for an insurance adjustment is in effect, the insurance coverage is allowed to lapse, is terminated, or otherwise no longer covers the children for whose benefit the order was issued, the court (i) may find the amount deducted from the obligor’s child-support obligation therefor to be an arrearage in the obligor’s total child-support obligation; (ii) may find the obligor liable for medical expenses that would otherwise have been covered under the insurance; and/or (iii) may enter such other order as it shall deem appropriate.

The new comments accompanying these changes make it clear that the changes are in response to and in compliance with federal law, mainly around this new concept of “cash medical support.” Interestingly, there has been no change to the controversial practice of including the entire family health insurance premium in the calculation of child support rather than some portion of that premium allocable to the children.