Nonresident Fathers: To What Extent Do They Have Access to Employment-Based Health Care Coverage?

06/15/2000

As part of the Child Support Performance and Incentive Act of 1998, Congress established a medical child support working group to identify barriers to medical support enforcement and to recommend ways to address them. This report is an effort to provide greater background on one such barrier  the lack of access by many nonresident parents to employment-based health care coverage. The report develops a national estimate of the extent to which nonresident fathers have access to employment-based health care coverage, and considers the potential for increasing the number of children covered through a nonresident father's employment-based health care plan.

Since 1985, state child support agencies have been required to request that health care coverage be included in the child support order when the custodial parent does not have private coverage and the nonresident parent has access to employment-based coverage. According to the data presented here, one quarter of all custodial mothers reported that their children were covered by a nonresident father's health care plan in at least one month of 1993. Of cases where the nonresident father was required to provide health care coverage under a child support order, two-thirds of custodial mothers reported receiving such coverage.

Whereas most higher-income custodial families who do not receive health care coverage from the nonresident father are able to provide health care coverage themselves (figure 1), the majority of lower-income custodial families (those with incomes below 200 percent of the poverty threshold) are unable to do so. Without private coverage from the nonresident father or custodial family, half of all lower-income custodial families rely on Medicaid alone and eight percent of lower-income custodial families are uninsured for the entire year. A key question, then, is the extent to which the nonresident fathers of the children who receive Medicaid or are uninsured have access to employment-based health care coverage and are able to extend coverage to their children living elsewhere. 

Figure 1. Source of Health Care Coverage, by Custodial Family's Income Level.

Source:  Author's analysis of the 1993 Survey of Income and Program Participation.

Answering this question definitively would require nationally representative data that linked custodial families to nonresident fathers. Unfortunately, such data do not exist. Therefore, this study examines independently collected data on custodial mothers and nonresident fathers in the 1993 Survey of Income and Program Participation (SIPP), and makes inferences about the extent to which additional employment-based health care coverage from nonresident fathers could reduce the number of children without private health care coverage.

Based on these data, between 42 and 51 percent of nonresident fathers who do not provide health care coverage to their children within the first four months of 1993 have access to employment-based dependent health care coverage in at least one of those months (figure 2). Of those without access, 29 percent work for a firm that does not offer health care coverage, 9 percent work for a firm that offers only individual coverage, 10 percent are self-employed, 38 percent do not work at all during the four-month period, and 14 percent are incarcerated. 

Figure 2. Access to Emploment-Based Dependent Health Care Coverage By Fathers Who do Not Cover Their Nonresident Children.

Source:  Author's analysis of the 1993 Survey of Income and Program Participation.

While many nonresident fathers do not have access to employment-based dependent coverage, coverage is available to as many as half of those who do not provide health care coverage to their nonresident children. But if these fathers provided health care coverage, how much of that coverage would go to children who receive Medicaid or are uninsured? In the first four months covered by the 1993 SIPP, about 8.6 million custodial families do not have coverage from the nonresident father. Of these custodial families, forty-one percent (3.5 million) provide private coverage themselves, the same proportion rely on Medicaid alone, and 18 percent (1.6 million) are uninsured (figure 3). 

Figure 3. Source of Health Care Coverage For Families Who Do Not Receive Coverage From The Nonresident Father.

Source:  Author's analysis of the 1993 Survey of Income and Program Participation.

The potential for reduction in the number of children without private coverage depends on the extent to which the additional coverage from nonresident fathers would duplicate the coverage of the 3.5 million custodial families who provide private health care coverage (and do not receive coverage from the nonresident father) rather than add new coverage for the 5.1 million custodial families who are covered by Medicaid or uninsured. Based on the assumption that women partner with men of similar or higher socioeconomic status, it is reasonable to assume that the custodial mothers who can provide private coverage are more likely to be the former partners of the fathers who themselves have access to private coverage. If all custodial families who provide health care coverage to their children correspond to the 3.6 to 4.4 million nonresident fathers who have access to dependent coverage, then between 100,000 and 900,000 additional custodial families without private coverage could receive coverage from a nonresident father, accounting for between 2 and 18 percent of all custodial families without private coverage.

The above estimates reflect nonresident fathers' access to dependent health care coverage at a single point in time, but perhaps more important is their ability to provide coverage on a continuous and reliable basis. Of the nonresident fathers who report providing health care coverage in at least one month, less than half (44 percent) report providing health care coverage to their children for all twelve months of the year. And only one quarter of nonresident fathers who do not provide coverage to their children are themselves covered for the entire year.

Furthermore, the estimates above do not take into account geographic barriers to coverage that are increasingly relevant in the era of managed care. Only forty percent of nonresident fathers live in the same city or county as the custodial family. By 1999, more than a quarter of all workers were enrolled in HMOs and almost two-thirds were enrolled in other managed care plans such as PPO and POS plans. Children living outside the service areas of their father's plan may be unable to obtain coverage from the plan (HMOs) or may face higher out-of-pocket costs and reduced benefits (PPO and POS plans).

Provision of employer-based health care coverage by nonresident parents is one tool with which to address the medical costs of children in custodial families. At least a quarter of children in custodial families already benefit from such coverage, and some additional children probably could gain access to such coverage. But many nonresident fathers lack access to employment-based health care coverage. They tend to be poorer and have less attachment to the work force than those who provide coverage. Nearly one third are officially poor and less than half work full-time for the entire year. For the children of many of these poor fathers, government programs such as Medicaid and CHIP may provide the only viable source of health care coverage.

To the extent that nonresident parents are able to pay, the problem of lack of access can be partially addressed by requiring nonresident parents to make cash contributions toward their children's health care coverage costs. Options that have been proposed or implemented in various states and localities include using payments from the nonresident parent to "buy-in" to the government's Medicaid program, to contribute to the custodial parent's private health care coverage premiums, or to enroll the child in state health care coverage programs set up to cover uninsured children. Further efforts in these areas, as well as alleviating geographic barriers to access and coordinating seamless transitions between nonresident parents' health care coverage and government health care coverage programs, can yield greater opportunities for nonresident parents to contribute to consistent and reliable health care coverage for their children.