I do not believe you have to carry the kids on your insurance, see a lawyer.

If the stepkids are on your policy, you willingly put them there. You, yourself, are in no way responsible for insuring these children. I'll assume in the CO that your DH is ordered to provide health insurance for the children? Ok, so that doesn't mean YOU are. He is. If you don't want to put them on your policy, he could always either put them (and himself) on a policy through his own work place or through a self purchased policy. But yes, that route may very well cost your DH much more out of pocket cost per month and may not provide as decent as coverage as your policy currently does.

My guess, 1) he either doesn't have insurance through his work, 2) he could but it is cost prohibitive, or 3) it was cheaper to enroll DH and his children on your policy through your employment than the other options and you volunteered putting them on your policy.

You making a personal decision between your Dh and yourself does not grant you as SM 'rights' for the healthcare of these children. You can take them off as you are not the one court ordered to provide insurance. Or you can leave them on due to being most economical for your entire household budget. You could even have DH pay you back every month the cost of the premium increase the children may cost on your monthly fees (which, by the way, he should be paying you for now. He should be ashamed of himself if he's expecting you to use your personal money to pay his children's premium which he and BM benefit from)

You providing the policy which helps cover the children does not automatically give you say in any medical care or 'rights' to fill out any medical records in pace of the legal biological parents/s. The parents are still responsible for the medical decisions and of course any amount your company doesn't cover and/or any co-pays. If your insurance policy doesn't cover a certain % or a certain service at all, that does not mean the responsibility of the service lands at YOUR feet, the unpaid/uncovered service falls on DH/BM . The providers of any services should have DH (or BM or both)listed as 'responsible party' and then list your insurance policy info as a party able to be 'billed' for any available services that the company might provide as the insurance carrier. You should never be listed at any of the offices\ facilities billing departments as the 'responsible party'.

I think you are lucky not to have the decision making on your shoulders. Justemetoo, is right about the "responsible party", do not ever sign anything at the hospital or any other medical facility or you will be responsible.