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Post by caddy on Jan 19, 2011 16:05:31 GMT -5
Hello all,
I just got married last year to a man who shares custody of his two children. As their father, he's required to pay their health insurance premiums + half of medical bills, doctor co-pays and prescriptions. Last year, his ex-wife had a baby with her new husband and put all three kids on her new husband's health insurance plan, because it's the type that covers child(ren) whether you add one child or two+ children. My DH pays his half to them in cash when bills come due and the cost amounts to a few hundred dollars per year (no major health issues, just typical stuff).
When we married last year, I put my DH on my health insurance plan, which offers the same coverage at the same cost as the kids' stepfather's plan. We wanted to add the kids to my insurance as well, to pay the premiums with our pre-tax dollars, but his ex opted to keep them on her husband's plan, since she handles appointments, etc. and she's already sorted out everything and doesn't want to change again. My DH continues to pay his half of the bills to her in cash.
My insurance plan offers tax advantaged accounts we could use to cover any eligible expenses that he must pay to doctors, pharmacies, etc. But because his ex wife pays the bills and he pays her in cash, we can't use our HSA. We realize we're losing money by not paying health care expenses with tax deferred accounts, but we really can't think of a better way to do this.
Just curious... is anyone else in this situation? Of course, if it were up to me, we wouldn't be doing it this way. But since it's not up to me, can anyone think of a better way to pay these medical expenses, under the parameters I've defined?
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thyme4change
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Post by thyme4change on Jan 19, 2011 16:50:04 GMT -5
Here is the deal - sometimes it isn't worth the money. I don't know what your tax bracket is, but the HSA probably isn't saving you more than $100 per year. I wouldn't mess with a decent divorce by squabbling over $100, or even $200. It amounts to less than $5 per week. Would you rather have a well functioning, happy ex-wife, or a bitter situation where you and the ex are constantly trying to nickel and dime each other over every little thing.
I would just chalk it up to the cost of being divorced with kids, and look for savings in other places.
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thyme4change
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Post by thyme4change on Jan 19, 2011 16:55:54 GMT -5
Also, you might be asking the Mom to pay more in taxes, just so you can pay less in taxes. That doesn't seem fair either.
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Post by Savoir Faire-Demogague in NJ on Jan 19, 2011 16:57:10 GMT -5
I wouldn't mess with a decent divorceGotta love it....
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cronewitch
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Post by cronewitch on Jan 19, 2011 17:00:02 GMT -5
If you think they will rack up huge cost like braces you could put them in your HSA then pay the provider your half after the mother's insurance. For copays and such I wouldn't bother.
I was having some dental work done one fall and the dentist said I was at my annual limit so future appointments would be next year and gave me a list of appointments and the amount of future bills. I put them on a plan at work to pay pretax, saved some money and they paid early compared to when they deducted so it helped cash flow.
I would only put money in if I knew I was going to have an expense.
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thyme4change
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Post by thyme4change on Jan 19, 2011 17:25:11 GMT -5
Does your HSA give you a debit/credit card looking thing? Maybe you could ask Mom to use that for co-pays, and then deduct her half from the other amounts you pay her.
Or, could you submit the bill from the doctor to the HSA, even if you can't prove you paid it directly? I've never had to show what form of payment I used. Especially if Mom is using cash.
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Angel!
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Post by Angel! on Jan 19, 2011 18:18:02 GMT -5
You still can use the HSA. You can use your HSA for any family member's eligible medical expenses regardless of whether they are on the health plan with you. Check to see if your HSA offers checks. Then either write a check to yourself & pay them in cash or write out a check directly to the ex-wife. Your HSA might also have a way to transfer funds to your bank account. Either way, keep your reciepts. www.hsaresources.com/pdf/HSA_Resources_Distribution_Worksheet.pdf
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Post by caddy on Jan 19, 2011 18:19:02 GMT -5
"Or, could you submit the bill from the doctor to the HSA, even if you can't prove you paid it directly? I've never had to show what form of payment I used."
That's what I was thinking. But we don't even get copies of the bills or even receipts. Their mother just tells us what we owe, and we transfer the cash. Even if we did get the bills, I don't know if that would work, since the children aren't listed as dependents on our health insurance.
I haven't ever signed up for the HSA. But since they've expanded it to cover any OTC meds and I can link my debit card, so that the system will recognize any eligible purchase, I was thinking of doing it next year, now that it's become so easy.
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Angel!
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Post by Angel! on Jan 19, 2011 18:20:36 GMT -5
HSA's no longer can be used for OTC meds unless you have a prescription.
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Post by caddy on Jan 19, 2011 18:21:03 GMT -5
Thanks, Angel. That's exactly what I needed to know.
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Angel!
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Post by Angel! on Jan 19, 2011 18:22:35 GMT -5
Just want to add - HSAs can't be used to pay insurance premiums either.
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thyme4change
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Post by thyme4change on Jan 19, 2011 18:26:03 GMT -5
You could ask the ex-wife for copies of the bills. Well, you can't, but your husband can. Will she refuse?
Also, I don't think that they have to be on your insurance to be on your HSA - but the best person to ask would be a rep of the plan, or at least someone in your HR department.
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Jake 48
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Post by Jake 48 on Jan 19, 2011 18:29:26 GMT -5
If it works for you, it is not worth upsetting the situation over a few dollars, I would pay by check so there is a paper trail
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Post by caddy on Jan 19, 2011 18:36:40 GMT -5
Angel,
I know I can't use the health FSA for premiums, but I do pay health insurance premiums pre-tax, so that's what I meant by the tax benefit to that over cash.
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Post by caddy on Jan 19, 2011 18:39:28 GMT -5
Jake,
The paper trail is what my DH was really concerned about. He wanted to cover his kids in his name (and avoid the cash payments) to have a legal record that he was fulfilling his obligation. Because even though we all trust each other now, you never know what can happen in the future (job loss, death), and we don't ever want to be in a position to be sued for insurance premiums and medical bills, since we don't have a record of payment.
Both families have the same insurance provider, same coverage level and costs, in the same state. It's only $70 to cover children. The kids' stepfather has to add children to his plan to cover his new baby. If we were to have a baby in the future, we'd have to add child coverage. For each family, it's "free" to cover these kids.
I don't know how confusing it would be, but I read that you can have someone secondarily insured on a second health insurance plan. We might look into adding them to ours in the future, just for the peace of mind and the legal records.
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Angel!
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Post by Angel! on Jan 19, 2011 18:42:19 GMT -5
That is what I figured you meant, but just thought I would clarify since it sounds like you have to hand over money for the insurance premiums & medical expenses. Just wanted to make sure you realized I was saying you could pay her the medical expenses portion from the HSA, but not the insurance premiums.
As part of the divorce/custody agreement, your husband should have access to all their medical information & bills. Not sure if he would want to push the issue though.
I would always pay with a check & always note in the memo what the payment was for (DS Doc apt on 1/8). Then you have a much better record & she would have a hard time trying to prove that you aren't paying. Either that or purchase a receipt book & have her sign a reciept each time you make a cash payment. You could tell her that it is record keeping for tax purposes or something similar.
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Jake 48
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Post by Jake 48 on Jan 19, 2011 19:07:00 GMT -5
Caddy, my ex and I did secondary coverage for our kids dental, her husband had a better dental plan than I did, he had to cover his kids anyways, so it worked out. I covered health insurance and most of the time I did not;t ask Ex for her share of co-pays. If everyone gets along and is an adult , it works. When my oldest boy came to live with me at 14, EX cut my child support in half, no court, 100% illegal. I always worried it would come back to bite me, never did. Came down to acting like an adult. i understand DH concerns for covering his butt
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Post by caddy on Jan 19, 2011 19:34:07 GMT -5
Angel,
Thanks again. Yes, before we were married, DH was paying cash to cover premiums. It used to cost him about $200/month to cover the kids' health insurance. Their mother remarried and her new husband had better and cheaper insurance and they had a baby to cover anyway, so they worked out a deal with my DH that the kids be covered on their stepfather's insurance at a cost to them of $70/month, and my DH would pay her $200/mo in cash, which he'd have to pay to cover them on his policy. She wanted to use that money for tuition send son to K at his pre-school instead of public school (another situation where a flex spending acct would come in handy). After the school year, my husband would then pay just $70 going forward.
Well, when he married me, he had the option of insuring them through my plan for $70. For record-keeping and fairness, I thought he should insure them on my plan or pay nothing if they'd rather keep them on their stepfather's plan. Again, it doesn't cost their mother anything extra to insure the kids on her husband's plan... her husband is required to insure his own baby anyway. The kids' mother had already gone through the hassle of setting everything up on her plan, so she chose to keep it as is, and we no longer pay their premiums. It might sound like we were trying to get out of paying, but it was the most fair thing for us. We also signed a letter stating that we would put them on my plan immediately if anything came up in the future (job loss, change in policy cost, etc.).
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Post by caddy on Jan 19, 2011 19:40:07 GMT -5
Angel -- last week we were asked to pay $200 to cover another hospital bill for an operation we'd already paid for. Out of curiosity, I asked what it was we had to pay for, and she said she already threw the bill away. We paid it, but we requested copies of any bills/receipts in the future. So that shouldn't be a problem going forward. If there was ever any extra padding on the medical bills, it wasn't outrageous. LIke I said before, the medical expenses were never for anything out of routine stuff (tonsils, x-rays, ambulance rides after bee stings at school (school policy -- oh brother
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Post by caddy on Jan 19, 2011 19:42:12 GMT -5
Jake -- your ex sounds like a good person. I'm glad you were able to have such a cordial relationship with her, for your son's sake. Honestly, my DH is probably too far on the push-over side. He doesn't get to see his kids as much as he'd like. They don't follow the divorce decree since the kids are still pretty young. Hopefully when they hit middle school/high school, things will change...
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whoisjohngalt
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Post by whoisjohngalt on Jan 19, 2011 21:55:17 GMT -5
Caddy,
I am REALLY not trying to stir anything, but the answer "I already threw the bill away" would bug me. I don't have any experience with divorces, step children, etc, so take it for what it's worth, but 1) I would not accept any cash transactions EVER! and 2) I would want to see the bills.
I am not the most diplomatic person out there, but I would tell her that you want to see the bills and pay by check so YOU can keep records of YOUR expenses - so she doesn't get too defensive.
May be I watch too much Judge Judy, but it is so very rare that exes are fair and decent to each other
Good luck! Lena
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Deleted
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Post by Deleted on Jan 20, 2011 3:18:14 GMT -5
They don't follow the divorce decree since the kids are still pretty young. Hopefully when they hit middle school/high school, things will change... That would bother me more than then the money on health insurance
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thyme4change
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Post by thyme4change on Jan 20, 2011 7:52:55 GMT -5
I threw the bill away sounds fishy to me too. I keep all bills for a year - but certainly hospital bills, since there are so many billing errors and they always seem to come back with more charges. Of course, I know I'm anal - so it doesn't surprise me - but I would still ask to see future bills.
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michelyn8
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Post by michelyn8 on Jan 20, 2011 8:13:00 GMT -5
I don't know how confusing it would be, but I read that you can have someone secondarily insured on a second health insurance plan. Read more: notmsnmoney.proboards.com/index.cgi?board=finance&action=display&thread=1915#ixzz1Ba4iWP4eThis is how my youngest is covered. She lives with her father and is on her step-mother's insurance. When she decided to go live with him, we agreed I would carry the insurance and he would pay what wasn't covered (step-mom's insurance came later). I have chosen to keep her on my insurance despite her being on step-mom's as a precaution. Claims are submitted to both insurance companies by the Dr. and what one doesn't pay, the other often does. I don't find it to confusing but I don't get involved in every little Dr. visit they make. I actually had to push them to give my insurance info to the Dr.'s and now see EOB's once in while for claims made by daughter's Dr.'s. If DH is unwilling to make changes to the current agreement, then at least encourage him to get receipts from his ex. If she is unwilling then he should begin paying her via check versus cash to cover his own rear should things go downhill in the future.
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Post by caddy on Jan 20, 2011 9:02:28 GMT -5
Of course I don't believe that a medical bill was received, paid, and thrown away before we even knew about it. Asking to pay the expenses through a tax deferred account is my way of asking to see bills/receipts without anyone getting defensive. But I wanted to make sure it was possible.
I don't know how much money my DH has paid in cash over the past 5 years, but we've worked hard to dig our way out of a hopeless financial situation (for him). He's a great guy, but not good with money, so he's finally agreed to let me handle the budget so we can buy a house. That's why this is now my business.
Thanks all for your advice. Sounds like there's no standard way to handle joint expenses like this.
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Post by caddy on Jan 20, 2011 9:10:38 GMT -5
michelyn -- I couldn't follow your link. Thanks for your advice. It can't be easy for you to let go of your control over insurance/doctor info. Especially if you are a person who likes to track her finances closely; and as a reader of this board, I'm betting you are.
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Angel!
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Post by Angel! on Jan 20, 2011 11:52:50 GMT -5
They don't follow the divorce decree since the kids are still pretty young. Hopefully when they hit middle school/high school, things will change... That would bother me more than then the money on health insurance Yeah, if them not following the decree bothers your husband, then he needs to start tracking & reporting this. If both parties agree not to follow the decree, then that is fine. But if you husband is getting less time with the kids than he wants, then he should really start reporting this to the courts & possibly work out a new custody plan. The parenting plan is meant to be followed how it is written now, not assumed that it was meant for when the kids get older unless there is wording in there that states specifically states how the plan changes as the kids get older. I also wouldn't assume things will just somehow work better as the kids get older. As kids get older, they get involved in more activities & get busier & you may find you get less & less time with them unless you push the issue.
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Jake 48
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Post by Jake 48 on Jan 20, 2011 19:09:34 GMT -5
Caddy, my Ex is a good person, and when we divorced we agreed that the boys came first and we would do everything we could to be civil for their sake. Fast forward they are 22 and 24 now and have told us they are glad mom and dad get along and even their friends comment on how well we get along compared to their divorced parents. My Ex had to have a hysterectomy, she asked my wife to be her health care proxy, when I asked her why not her husband or me, she replied "are you f#@!$%g kidding, both of you would pull the plug if I stubbed my toe
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Frappuccino
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Post by Frappuccino on Jan 21, 2011 0:01:46 GMT -5
awww, you wouldn't really pull the plug on her would you?? She thinks her current hubby would too?? That's neat that she gets along with your wife. I wish I got along better with my ex and his wife. My ex and I are civil now after a decade, but it is still a struggle for us - still new. Your kind words about her speak volumes about your good character as well.
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Post by caddy on Jan 21, 2011 9:40:01 GMT -5
Jake -- that's really funny! How old were your kids when you and your first wife split up? I ask because it sounds like they were pretty young and you spent much of their lives remarried. Is your ex wife pretty level-headed when it comes to money?
My DH is a lot like you. He doesn't want his kids to ever feel any negativity in their lives. He's a high school teacher, and dealing with kids and their parents has given him more patience and diplomacy than he had in the first place. Like you, I'm lucky that all parents and step parents get a long and DH's ex-wife's family has embraced me. Her mother (the kids' grandmother) is so wonderful to me (the type who will gush their appreciation and tear up from emotion). I call her "mom" and I love her.
The money issues we deal with don't come from spite, I don't think. Just priorities. His ex will ask for help above and beyond child support for extras that she says she can't afford. But she bought a $30K SUV and a house, went to Europe, etc. Of course, you can't say anything about how she spends her money (and I know better than to try!).
My DH left the marriage with a house that sold at a loss and quite a bit of high interest credit card debt. It's been a long climb back to zero. In the past five years, I've worked my way up professionally and helped pay off the (his) credit card debt. We did it by living in the cheapest, 45-year-old 700 sq ft 2 bdrm apt, we don't have cable, don't eat at restaurants, no movies, the typical.
But... the debt is paid off, we're in the process of buying a house with a down payment. I start grad school in the fall. Hopefully the financial pain will become a distant memory for us.. but I'm always wary of returning to that place.
Thanks again for sharing your story.
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