Opinion ID: 1160955
Heading Depth: 3
Heading Rank: 1

Heading: The Superior Court Erred in Denying Allan a Child Support Credit for Maintaining Health Insurance for Kristen and Kaylee.

Text: After the Rusenstroms divorced, this court amended Alaska Civil Rule 90.3(d) to require divorcing parents to provide their children with health care insurance if it is available. Under the amended rule, parents must ordinarily share the cost of the insurance, and if the non-custodial parent pays for the coverage, the non-custodial parent is entitled to a child support credit for the custodial parent's share of the payment. [2] Although the Rusenstroms' original child support order did not address the topic of insurance, Allan voluntarily provided medical coverage for his daughters. On August 30, 1996, after Rule 90.3(d) was amended, he moved to modify the support order to allocate to Carrie half the cost of this insurance. Claiming that the girls' coverage cost him $339.20 per month, Allan requested a monthly child support credit of $169.60 (one half of the claimed actual cost). Following a hearing, the superior court ordered Allan to provide health insurance for his daughters, finding that [t]he parties' two minor children are in need of health care coverage by insurance and that [t]he necessary health care coverage for the children is available to Allan under the collective bargaining agreement between IBEW and his employer. But the court further found that Allan ha[d] failed to offer any admissible evidence ... [of] the cost necessary to insure the two children. It thus denied him any credit for the cost of maintaining this insurance. Allan challenges this ruling, arguing that he presented admissible evidence proving that his actual monthly cost for insuring his daughters amounts to $339.20. In response, Carrie maintains that Allan should receive no credit, since his employer actually pays for the coverage. Alternatively, she claims that Allan failed to prove that the girls' insurance is necessary.
We review rulings admitting or excluding evidence for abuse of discretion. [3] We review factual findings for clear error. [4] But in determining how legal doctrine applies to undisputed facts, we rule de novo, without deference to the trial court's judgment. [5]
To support his claim that insuring Kaylee and Kristen cost him $339.20 per month, Allan presented the affidavit of Donald Parks (with attached exhibits) and his own affidavit. At the hearing on Allan's motion, Carrie did not argue that this evidence was inadmissible. The court nevertheless found that Allan had failed to offer any admissible evidence that the sum of $339.20 is the cost necessary to insure the two children. The court's reference to inadmissibility suggests that it denied Allan's motion because his affidavits contained hearsay. Allan persuasively disputes this ruling. Absent a proper objection, hearsay is normally admissible. [6] Here, Carrie raised no hearsay objection. Moreover, the trial court did not suggest that it considered the evidence to be problematic on this ground. [7] To the contrary, when Allan offered to call Parks as a witness during the hearing on his motion, the court indicated that his testimony was unnecessary. [8] Given these circumstances, if the trial court denied Allan's motion on the ground that his evidence of added cost was inadmissible hearsay, the court abused its discretion. Carrie offers an alternative explanation for the trial court's ruling, suggesting that, in finding no admissible evidence of the cost necessary to insure the two children, the court meant to say that Allan had failed to prove that the insurance package he had chosen was actually necessary to meet the children's needs. But this argument misconstrues the trial court's order, which directs Allan to continue providing the coverage precisely because it is necessary health care coverage for the children [and] is available to Allan under the collective bargaining agreement. In finding that Allan failed to show that $339.20 was the cost necessary to insure the girls, the court echoed the words of the commentary to Civil Rule 90.3(d)(1), which it had quoted in its decision. The commentary explains that the rule's cost-sharing provision is limited to that portion of the total cost necessary to insure the children involvednot the parent, the parent's new spouse or children of another relationship. [9] The court's reference to this commentary makes it obvious that it found Allan's evidence deficient not in failing to prove the need for the provided coverage, but in failing to prove the cost that was allocable to his daughters.
The remaining question is whether, considering his hearsay evidence, Allan presented substantial evidence that his monthly cost for insuring his daughters was $339.20. The evidence on this point is essentially undisputed. Parks's affidavit establishes that Allan receives a Health and Welfare Plan (H & W) benefit from his employer of about $756 per month. This benefit is used by his union to purchase insurance for Allan and, at Allan's option, for his family. Allan's selection of the premium insurance plan, which extends coverage to his family, results in the entire H & W benefit being applied toward insurance coverage. But if Allan purchased health insurance for himself alone, forty-eight percent of his H & W benefit would be paid into his Money Purchase Pension Plan (MPPP), which becomes available to him upon retirement. Thus, were Allan to insure himself but not his family, the cost of his insurance would be about $393; the remaining $363 (forty-eight percent of $756) per month of his H & W benefit would be paid into his MPPP. Allan has selected the premium insurance, so that none of the H & W benefit goes into his MPPP. In so doing he forgoes a monthly benefit of about $363. [10] Carrie offered no conflicting evidence. Her only witness, Gregory Stokes, corroborated Parks's affidavit. Stokes testified that he was familiar with Allan's benefits package; he confirmed that if Allan did not insure the girls, a portion of Allan's H & W benefit would be paid into his MPPP. In fact, Carrie apparently did not call Stokes to dispute Allan's evidence concerning the increased cost of covering their two daughters. She presented his testimony only to make the point that Allan did not actually pay for this coveragethat his employer paid it. This was the heart of Carrie's opposition to Allan's motion below, and it is the core of her argument on appeal. Alaska Civil Rule 90.3(d)(1) permits a non-custodial parent to receive child support credit for providing court-ordered health insurance only if the insurance is actually paid by that parent. [11] According to Carrie, the cost of coverage is not actually paid by Allan, since his employer pays for the insurance. In Carrie's view, Allan would be entitled to receive credit only if he personally paid the costs or if they were reflected as deductions from his take-home pay. Allan responds that he does actually pa[y] for the insurance because he forgoes the benefit of future income in order to maintain the insurance. He contends that [m]oney put into his retirement is just as valuable as money put into his pocket every month.... Since retirement money is income to him, the loss of it due to a health insurance election for the children represents a very real cost to [him]. Allan has the better argument. Civil Rule 90.3(d)(1) allows Allan a credit for costs that he actually paid, but it does not expressly require that Allan pay those costs directly or out of his present take-home income. The Commentary to the rule provides some insight into the purpose of the actually paid requirement. It suggests that the rule mandates allocation of insurance payments only when there is actual cost imposed on the parent seeking a credit. [12] By opting for employer-funded insurance coverage over payments into a retirement plan, a non-custodial parent incurs a cost as real as the cost of paying directly. In keeping with the Commentary, we interpret Rule 90.3's actually paid requirement to include this situation. The record establishes that Allan paid an actual cost out of his future income stream in order to maintain his children's insurance. The record also establishes that this cost is approximately the amount that Allan asserted as the basis for requesting a child support credit. [13] Accordingly, we conclude that the superior court erred in finding that Allan failed to produce admissible evidence sufficient to support his claim for a child support credit. We nevertheless note that Allan's evidence on this point may not be conclusive. Although neither party addresses the issue, the record suggests that Allan has remarried and that his new spouse has a child. It therefore seems conceivable that Allan's added cost for insuring his family provides coverage not only for Kristen and Kaylee, but also for his new spouse and her daughter. [14] On remand, the court should resolve any remaining uncertainty on this point. Because Rule 90.3(d)(1) entitles Allan to a credit based only on his added costs for insuring Kristen and Kaylee, he should receive no credit for any added costs reflecting coverage of his new family members. The court may require Allan to produce additional evidence concerning his coverage. If the plan covers other family members, and evidence is unavailable on the incremental cost of insuring only Kristen and Kaylee, the court should determine Allan's costs for covering Kristen and Kaylee by spreading the total added cost of family coverage pro rata among all covered family members, and allocating to Carrie half of Kristen's and Kaylee's prorated costs.