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252E.1A - Self-Employed Income - Cash Medical
This page was updated on March 8, 2019The information below will help you understand the changes to 252E.1A. Please use our Health Insurance Questionnaire - Click Here.
Self-Employed Income
If you have indicated the income of a party as "self-employed" income, that raises two issues. The first is that a self-employed individual may be eligible to benefit from the 20% pass-through tax opportunity provided via the Trump tax act. Click Here to learn more. The second is that if cash medical support would ordinarily apply, the self-employed income NCP will not be ordered to pay cash medical support.
Below is the image of the checkbox in the "Medical" screen related to the application of 252E.1A. Checking the box removes cash medical support and adds those funds back into the mix for the calculation of child support. The short version is, if the kids are covered under a private plan of insurance (ie. Wellmark, American Family), don't check the box as it does not apply. If the kids have no insurance or are on Title 19 or hawk-i, keep reading.
I. 252E.1A(4) provides three circumstances where the NCP would ordinarily be required to pay cash medical support that cash medical is waived. The checkbox applies to sections B or C as detailed below (in this color font).
A. 252E.1A(4)(a) This provision provides that a low-income NCP will not be ordered to contribute toward the cost of any coverage, public or private. Do not check the box. Iowa Support Master will automatically remove cash medical if the NCP is low-income.
B. 252E.1A(4)(b) If the kids have no coverage or if they are covered by Medicaid/Title 19 or hawk-i, and the NCP does not have income which may be subject to income withholding for collection of cash medical support at the time of the entry of the order, the NCP will not be ordered to pay cash medical support. Example: the kids are on hawk-i and the sole source of income for the NCP is through self-employment. In such a case, NCP will not be ordered to pay cash medical. The court must order the NCP to obtain a health care plan when it becomes available at a reasonable cost. If the NCP is self-employed, but also working at a paycheck job (do they get a paycheck?), such as Home Depot, NCP must pay cash medical. The paycheck job allows for income withholding so they must pay cash medical. This section does not apply if the CP has the kids covered by a private plan, NCP will be ordered to contribute toward the cost unless he/she is "low-income". This section only applies if the kids have no coverage or they are covered by Title XIX or hawk-i. If so, you would check the box.
Code language: The NCP will not be required to contribute cash medical if... b. The noncustodial parent does not have income which may be subject to income withholding for collection of cash medical support at the time of the entry of the order. If this paragraph applies, the court shall order the noncustodial parent to provide health care coverage when a health benefit plan becomes available at a reasonable cost, and the order shall specify the amount of the reasonable cost.
C. 252E.1A(4)(c) If the kids have no coverage or if they are covered by Medicaid/Title 19 or hawk-i, and the NCP is receiving "assistance", such as Medicaid/Title 19, NCP will not be ordered to pay cash medical support. Secondly, if there is a child living with the NCP for whom the NCP owes an obligation or duty, and that child is on Medicaid/Title 19 or hawk-i, the NCP shall not be ordered to pay cash medical support. The child living with the NCP does not have to belong to the CP. In either case, the court shall order the NCP to provide health care coverage when a plan becomes available for which there is no premium cost. If this section applies, check the box.
Code language: The NCP will not be required to contribute toward cash medical ... c. If the noncustodial parent is receiving assistance or is residing with any child receiving assistance as provided in section 252E.2A, subsection 1, paragraph “c”, subparagraph 3(3) or (4). If this paragraph applies, the court shall order the noncustodial parent to provide health care coverage when a health benefit plan becomes available for which there is no premium cost for a child to the parent.
252E.1A(5) If a private health benefit plan is not available to either parent, and the CP has the kids on Title 19 or hawk-i, the court shall order the CP to provide health care coverage, and the court shall order the NCP to pay cash medical, unless an exception under 252E.1A(4) applies.
252E Amended - Click Here to Read HF2414.
To-The-Point
H.F. 2414, 252E.1A(7) now says an order entered before 10-1-18 may be modified in accordance with this section. It is not a new statute but 598.21C(1)(c) talks about modifications based on changes in medical expenses of a party. Under these changes, I believe you may file for modification.
The presumption of a substantial change in circumstances for a 10% change in the amount of the child support is found in 598.21C(2)(a). That is in addition to the criteria found in 598.21C(1). If you can show a substantial change in relation to the medical support, I don’t believe that you would necessarily also have to show a 10% change in the child support. Here is the rub, in theory, if you can prove a change in the medical support, the court could also modify child support even if the change in child support is less than 10%.
Because the medical support factors directly into the calculation of child support, before you file for a modification based solely on the new medical statutes in 252E, you might want to look at what may possibly happen in both medical support and child support, as ultimately both may be changed in a modification action, and determine whether the possible outcomes suggest that you should file a petition to modify.
252E.1A(4)(a) No matter whether the kids are covered or not, if the NCP is "low income", the NCP is exempt from paying cash medical support or contributing toward the cost of the coverage by the CP.
252E.1A(4)(b) The NCP does not have income which may be subject to income withholding for collection of cash medical support. Example, a NCP who is self-employed. If this section applies, the court shall order the NCP to provide a plan of coverage if a plan becomes available at a reasonable cos.
252E.1A(4)(c) The NCP is on Medicaid/Title 19 or has a child residing with him/her to whom a duty of support and the child is on Medicaid/Title 19 or hawk-i. If this section applies, the court shall order the NCP to provide a plan of coverage when a plan becomes available for which there is no premium cost.
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