Bed and Board Divorce, helath insurance and QDRO

5. RE: Bed and Board Divorce, helath insurance and QDRO

Recommend

Charles C. Abut, Esq

Posted 10-21-2014 01:12 PM

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

Original Message

Original Message:
Sent: 10-21-2014 12:54
From: Misty Velasques
Subject: Bed and Board Divorce, helath insurance and QDRO

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.

Misty Velasques, Esq.
	Hanan M. Isaacs, P.C. 4499 Route 27, Kingston, NJ t 609.683.7400 f 609.921.8982 vCard: Download here >> [email protected] www.hananisaacs.com

Compassionate counsel; tough advocacy.

6. RE: Bed and Board Divorce, helath insurance and QDRO

Recommend

Curtis J. Romanowski, Esq

Posted 10-21-2014 01:34 PM

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'

-------------------------------------------
Curtis Romanowski Esq.
Senior Attorney - Proprietor
Metuchen NJ
(732)603-8585
-------------------------------------------

Original Message

7. RE: Bed and Board Divorce, helath insurance and QDRO

Recommend

Richard S. Diamond, Esq

Posted 10-21-2014 02:02 PM

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.
-------------------------------------------
Richard Diamond
Managing Partner
Diamond & Diamond P.A.
Millburn, New Jersey
973-379-9292
[email protected]
-------------------------------------------

Original Message

8. RE: Bed and Board Divorce, helath insurance and QDRO

Recommend

David Perry Davis, Esq

Posted 10-25-2014 01:18 PM

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.

-------------------------------------------
David Perry Davis, Esq.
112 West Franklin Avenue
Pennington, NJ 08534
Voice: 609-737-2222
Fax: 609-737-3222
-------------------------------------------

http://scholar.google.com/scholar_case?case=15112973781950550701

602 F.2d 64

79-2 USTC P 9447

Lilley CAPODANNO, Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE, Appellee.
R. T. CAPODANNO, Appellee,
v.
COMMISSIONER OF INTERNAL REVENUE, Appellant.

Nos. 78-2210, 78-2211.

United States Court of Appeals,
Third Circuit.

Submitted under Third Circuit Rule 12(6) March 23, 1979.
Decided June 20, 1979.
1

Joseph Schoenholz, Newark, N. J., for appellant in 78-2210.

. . .

We deem Weinkrantz v. Weinkrantz, 129 N.J.Super. 28, 322 A.2d 184 (App.Div.1974) to be in point. There, the wife, living apart under a decree of separate maintenance issued under N.J.S.A. 2A:34-24, secured an order that, among other things, required her husband to file a joint income tax return for the year 1972.7 On the husband's appeal the order was affirmed, the Court holding flatly that a New Jersey decree of separate maintenance does not effect a legal separation. The Court said:

A judgment for separate maintenance entered pursuant to N.J.S.A. 2A:34-24, such as the judgment of separate maintenance dated March 11, 1969 here under consideration, goes no further than to adjudge that the husband without justification abandons and separates himself from his wife and refuses and neglects to maintain her. Such a judgment is actually just a money judgment determining the financial extent of the husband's duty to support his wife and children, if any. See 10 N.J. Practice (Herr, Marriage, Divorce and Separation (3d ed. 1963), § 525 at 446-447. While a judgment for separate maintenance recognizes the existing De facto separation of the husband and wife, it does not sanction or authorize it. A judgment of divorce from bed and board (limited divorce) obtained pursuant to N.J.S.A. 2A:34-3 is significantly different from a judgment for separate maintenance in this respect. A judgment of divorce from bed and board decrees a judicial separation (Rudin v. Rudin, 104 N.J.Eq. 524, 526, 146 A. 351 (Ch. 1929); Mueller v. Mueller, 95 N.J.Super. 244, 247, 230 A.2d 534 (App.Div.1967)), as does a judgment of divorce (absolute divorce) obtained pursuant to N.J.S.A. 2A:34-2.

9. RE: Bed and Board Divorce, helath insurance and QDRO

Recommend

William W. Goodwin Jr., Esq

Posted 10-25-2014 02:56 PM

Ok

Sent from my iPhone

Original Message

Original Message------

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.

-------------------------------------------
David Perry Davis, Esq.
112 West Franklin Avenue
Pennington, NJ 08534
Voice: 609-737-2222
Fax: 609-737-3222
-------------------------------------------

http://scholar.google.com/scholar_case?case=15112973781950550701

602 F.2d 64

79-2 USTC P 9447

Lilley CAPODANNO, Appellant,
v.
COMMISSIONER OF INTERNAL REVENUE, Appellee.
R. T. CAPODANNO, Appellee,
v.
COMMISSIONER OF INTERNAL REVENUE, Appellant.

Nos. 78-2210, 78-2211.

United States Court of Appeals,
Third Circuit.

Submitted under Third Circuit Rule 12(6) March 23, 1979.
Decided June 20, 1979.
1

Joseph Schoenholz, Newark, N. J., for appellant in 78-2210.

. . .

We deem Weinkrantz v. Weinkrantz, 129 N.J.Super. 28, 322 A.2d 184 (App.Div.1974) to be in point. There, the wife, living apart under a decree of separate maintenance issued under N.J.S.A. 2A:34-24, secured an order that, among other things, required her husband to file a joint income tax return for the year 1972.7 On the husband's appeal the order was affirmed, the Court holding flatly that a New Jersey decree of separate maintenance does not effect a legal separation. The Court said:

A judgment for separate maintenance entered pursuant to N.J.S.A. 2A:34-24, such as the judgment of separate maintenance dated March 11, 1969 here under consideration, goes no further than to adjudge that the husband without justification abandons and separates himself from his wife and refuses and neglects to maintain her. Such a judgment is actually just a money judgment determining the financial extent of the husband's duty to support his wife and children, if any. See 10 N.J. Practice (Herr, Marriage, Divorce and Separation (3d ed. 1963), § 525 at 446-447. While a judgment for separate maintenance recognizes the existing De facto separation of the husband and wife, it does not sanction or authorize it. A judgment of divorce from bed and board (limited divorce) obtained pursuant to N.J.S.A. 2A:34-3 is significantly different from a judgment for separate maintenance in this respect. A judgment of divorce from bed and board decrees a judicial separation (Rudin v. Rudin, 104 N.J.Eq. 524, 526, 146 A. 351 (Ch. 1929); Mueller v. Mueller, 95 N.J.Super. 244, 247, 230 A.2d 534 (App.Div.1967)), as does a judgment of divorce (absolute divorce) obtained pursuant to N.J.S.A. 2A:34-2.

10. RE: Bed and Board Divorce, helath insurance and QDRO

Recommend

Robert E. Goldstein, Esq

Posted 10-25-2014 05:26 PM

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. ------------------------------------------- Robert Goldstein Esq. Manalapan NJ (732)972-1600 -------------------------------------------

Original Message

Original Message: Sent: 10-25-2014 13:17 From: David Perry Davis Subject: Bed and Board Divorce, helath insurance and QDRO 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. ------------------------------------------- David Perry Davis, Esq. 112 West Franklin Avenue Pennington, NJ 08534 Voice: 609-737-2222 Fax: 609-737-3222 ------------------------------------------- http://scholar.google.com/scholar_case?case=15112973781950550701 <https: bulk.resource.org/courts.gov/c/f2/602/602.f2d.64.78-2211.78-2210.html=""> 602 F.2d 64 79-2 USTC P 9447 Lilley CAPODANNO, Appellant, v. COMMISSIONER OF INTERNAL REVENUE, Appellee. R. T. CAPODANNO, Appellee, v. COMMISSIONER OF INTERNAL REVENUE, Appellant. Nos. 78-2210, 78-2211. United States Court of Appeals, Third Circuit. Submitted under Third Circuit Rule 12(6) March 23, 1979. Decided June 20, 1979. 1 Joseph Schoenholz, Newark, N. J., for appellant in 78-2210. . . . We deem Weinkrantz v. Weinkrantz, 129 N.J.Super. 28, 322 A.2d 184 (App.Div.1974) to be in point. There, the wife, living apart under a decree of separate maintenance issued under N.J.S.A. 2A:34-24, secured an order that, among other things, required her husband to file a joint income tax return for the year 1972.7 <https: bulk.resource.org/courts.gov/c/f2/602/602.f2d.64.78-2211.78-2210.html#fn7=""> On the husband's appeal the order was affirmed, the Court holding flatly that a New Jersey decree of separate maintenance does not effect a legal separation. The Court said: A judgment for separate maintenance entered pursuant to N.J.S.A. 2A:34-24, such as the judgment of separate maintenance dated March 11, 1969 here under consideration, goes no further than to adjudge that the husband without justification abandons and separates himself from his wife and refuses and neglects to maintain her. Such a judgment is actually just a money judgment determining the financial extent of the husband's duty to support his wife and children, if any. See 10 N.J. Practice (Herr, Marriage, Divorce and Separation (3d ed. 1963), § 525 at 446-447. While a judgment for separate maintenance recognizes the existing De facto separation of the husband and wife, it does not sanction or authorize it. A judgment of divorce from bed and board (limited divorce) obtained pursuant to N.J.S.A. 2A:34-3 is significantly different from a judgment for separate maintenance in this respect. A judgment of divorce from bed and board decrees a judicial separation (Rudin v. Rudin, 104 N.J.Eq. 524, 526, 146 A. 351 (Ch. 1929); Mueller v. Mueller, 95 N.J.Super. 244, 247, 230 A.2d 534 (App.Div.1967)), as does a judgment of divorce (absolute divorce) obtained pursuant to N.J.S.A. 2A:34-2. </https:></https:>

11. RE: Bed and Board Divorce, helath insurance and QDRO

Recommend

David Perry Davis, Esq

Posted 10-25-2014 07:17 PM

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.

-------------------------------------------
David Perry Davis, Esq.
112 West Franklin Avenue
Pennington, NJ 08534
Voice: 609-737-2222
Fax: 609-737-3222
-------------------------------------------

12. RE: Bed and Board Divorce, helath insurance and QDRO

Recommend

David Perry Davis, Esq

Posted 10-25-2014 03:27 PM

(Tech issue -- others may have noticed that posts to this thread are coming in via email only. They're not appearing online on the website, which stops at response #6. I've alerted Barbara S. Straczynski, who can pass it to the tech folks).

-------------------------------------------
- Dave

David Perry Davis, Esq.
112 West Franklin Avenue
Pennington, NJ 08534
Voice: 609-737-2222
Fax: 609-737-3222
-------------------------------------------

NJSBA Family Law Section