In cases involving children, it is necessary to determine the dependent cost for health, dental and vision insurance.
The first step is requesting that the employer, sometimes human resources, provide a breakdown of health insurance costs. That usually includes the following information:
- Employee
- Employee + Spouse
- Employee + Family
- Employee + Children
The information is generally not readily available through review of paycheck stubs.
Once that information is obtained, the dependent cost is determined using the following steps:
- How often is the obligor, the person who pays the insurance, paid?
- Determine the difference between the employee + child cost and the employee cost.
- Take the number reached in step 2 and multiply that by the number of paychecks in a year (if paid bi-weekly then it is twenty-six (26) weeks).
- Once that number is determined, divide the number by twelve (12) months to get the monthly amount.
- That monthly amount is then divided by two (2) to reach each parent’s obligation for health insurance.
An example of calculating the dependent child portion is as follows:
- Employee $25.00
- Employee + Spouse $72.50
- Employee + Family $107.90
- Employee + Children $53.06
Take the two (2) amounts and determine the difference set forth in step 2 above.
Here, it would be $53.06 subtracted from $25.00 which equals $28.06.
If the amount is paid bi-weekly then the cost for the child is $28.06 multiplied by twenty-six (26) weeks which equals $729.56.
That amount is then divided by twelve (12) months to determine the monthly amount. $729.56 divided by twelve (12) months equals $60.80 per month.
Using that number, each parent’s obligation for health insurance is $30.40 per month.
