Hello everyone,
Several messages were not saved in the discussions library for this string. To preserve the integrity of the discussion in your Family Law Section microsite, following my email signature, is a transcript of the first 13 messages. The messages were sent from October 21, 2014 12:22 pm through October 24, 2014 9:35 am.
| Bed and Board Divorce, helath insurance and QDRO | Oct 21, 2014 12:22 PM | Barbara L Feinberg, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 21, 2014 12:33 PM | Curtis J. Romanowski, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 21, 2014 12:42 PM | Barbara L Feinberg, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 21, 2014 12:55 PM | Misty A. Velasques, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 21, 2014 1:12 PM | Charles C. Abut, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 21, 2014 1:34 PM | Curtis J. Romanowski, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 21, 2014 2:02 PM | Richard S Diamond, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 25, 2014 1:18 PM | David Perry Davis, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 25, 2014 2:56 PM | William W. Goodwin JR, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 25, 2014 5:26 PM | Robert E. Goldstein, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 25, 2014 7:17 PM | David Perry Davis, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 25, 2014 3:27 PM | David Perry Davis, Esq |
| RE: Bed and Board Divorce, helath insurance and QDRO | Oct 24, 2014 9:35 AM | Faith A Ullmann, Esq |
|
All the best,
Barb
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Barbara Straczynski
Director of New Media and Promotions
New Jersey State Bar Association
New Brunswick NJ
(732) 937-7524
[email protected] -------------------------------------------
Hello everyone:
I am settling a case that calls for Bed and Board divorce period of 4 years so that we can continue the husband's family health insurance benefits for the wife. Under the MSA, the wife will be receiving 50%of the marital portion of husband's 401k plan. Originally we were going to wait until the conversion of the bed and board to divide the 401K, however, my client needs access to her share of the funds now. My adversary is concerned that if we do the QDRO now it will trigger a termination of the health insurance benefits.
I am wondering if anyone has had this issue come up and been denied coverage.
thanks for your input.
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Barbara Feinberg Esq.
Rockaway NJ
(973)586-0707
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B&B Divorce bad idea for insurance purposes. Not binding on carriers, who can terminate the coverage at any time, including denying a claim for a catastrophic loss. Can't stress this enough.
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Curtis Romanowski Esq.
Senior Attorney - Proprietor
Metuchen NJ
(732)603-8585
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Curtis:
I know it is never preferred, but where finances are tight such that the cost of COBRA or private insurance is prohibitive, it is the only temporary solution. So far, I have not had a client (or client's spouse) denied coverage. Again, wondering if anyone has had denial of coverage and if dividing a 401K triggers the inquiry into the health insurance status.
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Barbara Feinberg Esq.
Rockaway NJ
(973)586-0707
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One company told me recently that they treat it as a divorce and will terminate coverage. They don't recognize a divorce from B&B.
I would call the carrier to confirm.
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Misty Velasques, Esq.
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Curt is right and so is Misty.
Don't rely on anecdotal/hearsay advice/rumor. Check the actual insurance contract language for the definitions, exclusions, etc.
Otherwise : what if the parties have a catastrophic medical claim, after their B&B divorce. Say $100K per year. They submit the claim. I'm general counsel for BC/BS. I investigate the claim because of its high amount. I take the position that the marriage ended with the B&B divorce. Or I take the position that this divorce was a sham intended to cheat/defraud the carrier. I decline coverage. Litigation ensues. Maybe the family wins, maybe they lose, but BC/BS can certainly better afford to front the litigation costs [2 or 3 years with appeals, etc.].
Plus, to anticipate the worst, BC/BS takes the position the lawyers actively encouraged/aided/abetted the fraud, and therefore should be sanctioned and/or liable as a joint tort feasor, etc.
charlie
Charles Abut Esq.
Hackensack NJ
(201)342-0404
If I were a plaintiff's attorney, and lawyers were joined as parties, I sure would be subpoenaing any list serve posts those lawyers were making during the relevant period. Just sayin'
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Curtis Romanowski Esq.
Senior Attorney - Proprietor
Metuchen NJ
(732)603-8585
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Dear Curtis,
I recently received a Linked In "friend" request from you. Unfortunately my profile is not complete (I have my web guy working on it as well as a new website) and I misplaced my password. Hence I could not respond. However, I must say that I was very flattered by the request since I am quite in awe of your knowledge of divorce and family law issues. I read almost all of the posts on our list serve and always look for your responses. While others seem to be bumbling around - probably like me - you always seem to be able to cut right to the chase with the exact court rule, rule of evidence (and I don't think it is sad that you read them for a hobby) or line of cases. Although the majority of my work is in Somerset and Hunterdon, perhaps we could meet sometime at a half way point or ICLE seminar. If you are ever in Somerville please feel free to stop by or call. If you ever have a case up here and need a place to make calls or just to get away from a client over a break, I am only a block and a half from the courthouse and have a conference room you are welcome to use. Thank you again for contacting me and I will continue to look forward to your posts.
Sincerely,
Kathy Wagner
[email protected]
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Katherine Wagner Esq.
Somerville NJ
(908)526-0099
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Interesting topic.
I think that most of us have explored the use of Bed & Board divorce settings to address short term insurance issues but not sure how contact with the insurance company, insurance agent or even a review of the underlying contract will help unless the actual wording of the contract specifically states that a bed & board divorce order does or does not constitute a termination event.
My sense is that most health insurance contracts state that the grant of a "divorce" constitutes a termination event.... so we are right back to whether a divorce from bed and board falls within that category or whether the parties and their counsel have the right to rely upon the insurance companies failure to specify "divorce from bed and board" in its contract as a termination event.
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Richard Diamond
Managing Partner
Diamond & Diamond P.A.
Millburn, New Jersey
973-379-9292
[email protected]
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Barbara:
This is a Plan specific issue. If the employer's health insurance plan allows for termination of benefits for "separated" spouses, or similar language than the QDRO should not be sent to the employer until after the Absolute JOD is entered. Clearly the concern is if the QDRO is sent, it will trigger a review by the employer and possibly warrant the termination of health benefits for Wife.
I have had this experience with certain unions and with government agencies (specifically Piccatinny Arsenal) but not yet with any private employers. I have had the experience of entering into Bed and Board divorces with TPAF and then filed a QDRO and there was no issue. I would absolutely get the employee's Benefits Plan if he/she has one, and read all the fine print.
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Faith Ullmann Esq.
Owner
Newton NJ
(973)579-9700
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This is another topic that has come up before here, and it's an important one.
To determine whether parties can share health insurance following a B&B / Limited Divorce, you need to check the policy documents themselves. If you just call human resources or the carrier, many times they hear the word "divorce" (as in "can the parties continue to share medical insurance if a judgment of Limited Divorce or Divorce from Bed & Board is entered?") and will say "no."
Get the policy documents. It's a contract. Read what constitutes a "qualifying event" ending eligibility for coverage. If it lists"legal separation" then you cannot continue coverage after a B&B divorce is entered. Unfortunately, I've even heard lawyers (none on this list that I'm aware of) say "there is no such thing as legal separation in New Jersey." This is malpractice. The statute is clear and the interpretation of it is from the Appellate Division as well as the second highest court in the country (the Third Circuit court of appeals.) A limited divorce is a legal separation. The case cite and language is below. This is not an open question. Legal separation means a B&B divorce -- if it meant upon the filing of a complaint or signing of an agreement or entry of a p.l. support, then no spouse could continue coverage during the pendente lite period since that's "legal separation" (as far as assets, etc). This is obviously not the law.
If the parties have a desperate need to continue coverage (serious medical issue, etc), and the policy terminates on legal separation, then we need to be aware of and discuss the option of obtaining a judgment of separate maintenance (and signing a settlement agreement) with the client. The same court authorities say that this is NOT a legal separation. The parties can therefore share medical insurance.
One of the important distinctions is that under a judgment of limited / B&B divorce, the parties do not file taxes jointly. Under a judgment of separate maintenance, they must do so (or file as "married filing separately"). This can increase tax hit, and usually the person benefiting by obtaining the insurance should agree to make up the tax difference the spouse providing insurance will incur.
The judgment can later be converted to an absolute divorce. The grounds have been established to do so in a limited divorce. Many years ago, a judge suggested that if the original complaint didn't seek "either / or" relief, a new complaint would have to be filed (and filing fee paid), along with either a consent order or a motion for summary judgment to convert from B&B to absolute (regular) divorce. For this reason, I file the complaints in these matters as "complaint for limited divorce or, in the alternative, for absolute divorce." The judgment can later be converted to an absolute divorce as a matter of right (with a consent order or, if there is not consent, a motion for summary judgment).
Any settlement agreement with a B&B or judgment of separate maintenance needs to clearly state that its terms will survive the conversion of a judgment and act as a full resolution of the issues upon a divorce being granted.
I share the concern that a problem could occur if the insurance carrier were tipped off via the entry of a QDRO and then checked the policy. The policy either says coverage cannot be provided when the parties are legally separated or it says cannot be provided when the parties are divorced. I agree 100% with Charlie Abut's comment that a spouse continuing to utilize coverage that terminates on separation after a B&B divorce is entered would be inviting a problem and probably a malpractice action. (Also, be advised that there is no requirement that parties be divorced in order to enter a QDRO, nor is there a limit that only one QDRO can be entered. QDRO's can be entered if the parties are married or separated or divorced).
I also puzzle at hearing people say that there is something fishy about obtaining a B&B divorce when that can be used to continue medical coverage. B&B is a legitimate legal status created by the legislature and discussed in case law going back as far as case law goes. Just because it's less common doesn't make it fishy. People choose whatever status they want (single, married, separated, divorced) for a multitude of personal and practical reasons. I would have malpractice concerns if an attorney did not advise parties who need to continue sharing medical insurance as to the existence of their options. That's as sure a malpractice award as advising parties (actively or negligently) to continue coverage after a B&B divorce is entered even though a party was no longer eligible for it as a result of a "legal separation." There is zero chance that a carrier would have a non-frivolous argument that benefits should be denied because a B&B divorce is in place. They would have an equally powerful argument in trying to deny coverage to a married couple "because they only got married for the insurance coverage." There are fee-shifting provisions when an insurer declines to provide coverage and they would protect a litigant from being bullied by an insurance company who didn't understand this ... but I can't really see that happening. If there is another legal argument on this (as to why a B&B divorce isn't legitimate for some reason), I'd love to hear it.
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David Perry Davis, Esq.
112 West Franklin Avenue
Pennington, NJ 08534
Voice: 609-737-2222
Fax: 609-737-3222
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I recently represented a party in a dissolution of civil union case. Once the MSA was signed, the parties agreed to dismiss the case as one of them wanted to continue to carry the other on her medical insurance until the other became Medicare eligible in a year.
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Robert Goldstein Esq.
Manalapan NJ (
732)972-1600
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I've used that one, too (dismissal). Sometimes the people "can't do it" emotionally as they "want it over" and there's more value to that issue than to doing what makes the most sense financially. Unless there is support to be paid through probation, a judgment of separate maintenance and FD order isn't required. Of course, a written agreement capping the marital estate is required, which should protect the parties as a stand-alone contract.
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David Perry Davis, Esq.
112 West Franklin Avenue
Pennington, NJ 08534
Voice: 609-737-2222
Fax: 609-737-3222
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