Reasonable Cost Determination
A. If there is NO statutory duty of support between Pltf and Deft (parties NOT legally married), and the difference between the cost for self and family coverage is known:
Take that “difference” cost ÷ by the # covered in the “family” portion x # people in the action (do NOT include the Deft in this count as there is NO duty of support between parties; his portion was “backed-out” by determining difference between self and family)
ex. Total cost of Family coverage is $100/mth;Deft’s “self coverage” = $40/mth
3 people covered total. (1Deft, 2 children of which only 1 in this action):
$100/mth family coverage - $40/mth “self coverage” = $60/mth difference
$60/mth cost ÷2 children covered = $30/mth for each child
$30/mth per child x 1 child in this action = $30/mth cost used to determine reasonable cost.
B. If there is NO statutory duty of support between Pltf and Deft (parties NOT legally married), and the difference between self and family cost is NOT known:
Take the full amount of the family coverage ÷ # people it covers x # people in action (do NOT include the Deft in this count as there is NO duty of support between parties).
ex. Only total cost of family coverage is known = $120/mth family coverage
3 people covered. (1Deft, 2 children of which only 1child in this action):
$120/mth total family coverage ÷ 3 people covered = $40/mth per person
$40/mth per person x 1 child in action (child in this case only) = $40/mth cost to be used to determine reasonable cost.
C. If there IS a statutory duty of support and the difference between self and family coverage is known:
Take that “difference” cost ÷ by the # covered in the “family” portion x the number of people in the action AND add this to the “self” cost for Deft as there IS a statutory duty to support. This is now your “total applicable cost” that should be considered in this case.
ex. Total cost of family coverage is $180/mth. Cost for Deft’s “self” coverage is $60/mth. 4 people covered total. (1 Deft, 2 children in this case, 1 child in another case)
$180/mth family coverage - $60/mth Deft’s self coverage = $120/mth “difference”
$120/mth ÷ 3 children covered =$40/mth per child
$40/mth per child x 2 in this action = $80/mth for children in this action
$60/mth Deft’s self coverage + $80/mth for children in this action = $140/mth total cost to be considered
D. If there IS a statutory duty of support and the difference between self and family coverage is not known:
Take the total amount of family coverage ÷ # people it covers x # people in the action. (Deft is included in this count as there IS a duty of support)
Ex. Total cost of family coverage is $120/mth.
3 people covered. (1Deft, 1child in this case, 1child in another case):
$120/mth family coverage ÷ 3 people covered = $40/mth per person
$40/mth per person x 2 people in this action (1Deft, 1child in this case) =$80/mth cost to be used to determine reasonable cost.
E. Determine reasonable cost (using the figure determined from above scenario) pursuant to Pa R.C.P. 1910.16-6(b)(3)(i):
1. Deft’s monthly net income = $
2. Deft’s monthly net x 5% = $
3. Applicable cost for coverage that you have determined (using scenarios above) = $
4. If “Line 3” is greater than “Line 2”, cost is unreasonable. Proceed to step “F” below to re-determine reasonableness.
5. If “Line 3” is less than “Line 2” proceed with:
a. Determine Deft’s monthly basic support and “additional expense” total = $
b. Applicable monthly cost for coverage = $
c. Determine what is 50% of Deft’s monthly net = $
d. If “a” + “b” = more than “c”, cost is unreasonable. Proceed to step “F” below to re-determine reasonableness.
e. If “a” + “b” = less than “c”, cost of coverage is reasonable.
F. If, by using the calculations for cost above, you find that the cost is unreasonable, you may consider what the Plaintiff’s % of responsibility of that applicable insurance cost is (based upon the parties’ incomes), and “back out” that amount from the applicable cost you were using. Then, recalculate the “reasonable cost” formula for Deft to determine if this adjusted cost may be considered reasonable.
ex. You determined that the applicable cost of $80/mth is not reasonable for the Deft. You find the % share of parties’ incomes using the most recent conference information. You find that Pltf has 40% share of the parties’ income:
$80/mth (applicable cost for coverage)) x 40% (portion of cost Pltf should be responsible for) = $32/mth. $80/mth - $32/mth =$48/mth is Deft’s actual end cost for coverage.
Use this $48/mth insurance cost figure to go through steps in “E” to determine if NOW this cost incurred by Deft would be reasonable.
In the event the cost is deemed unreasonable, parties are encouraged to negotiate a downward deviation in an amount equal to what was over and above “reasonable cost”.
In a conference situation, it is appropriate for officers to consider a downward deviation of the order amount if the amount of applicable insurance cost is within 10% above what would be “reasonable”. The downward deviation would accommodate the “overage amount” that is above “reasonable cost”.