Are Ongoing Health Insurance Benefits Considered Marital Property in a New York Divorce?

When a court sets out to divide a couple’s assets in a New York divorce case, the court will not simply split the assets down the middle, but instead it will employ aOutsidequarrelcouple-300x200 system called “equitable distribution.” Under an equitable distribution analysis, a court considers several factors when determining the allocation of assets. Importantly, however, only certain assets that are determined to be “marital property” are subject to equitable distribution. Thus, a party’s separate assets – i.e., those that were obtained before the marriage – will remain with the party to whom they originally belonged.

As a general matter, under the New York Domestic Relations Law, courts will consider assets that were accumulated during a marriage as marital property. Of course, certain exceptions can make the determination of what constitutes marital property fairly complex. For example, a question that often arises is how courts consider pension benefits and the provision of future health care benefits.

Pension Benefits Are Usually Subject to Equitable Distribution

The pension benefits that a party accrues while married will typically be held to be a marital asset that is subject to equitable distribution. The portion of benefits that was obtained before the marriage, however, will not be included as marital property because it was accrued before the marriage.

Pension plans, however, often contain more than just a provision for future financial compensation. Many pension plans provide for continued health insurance coverage after a party’s retirement. And while courts generally consider the financial compensation portions of a pension plan to be marital property, that is not necessarily the case for the provision of ongoing health insurance coverage.

Indeed, a few years back, a court issued an opinion in a New York divorce case holding that Husband’s pension plan benefit of lifetime health care coverage was not a marital asset subject to equitable distribution. The court rejected Wife’s argument that Husband derived a financial benefit from the coverage, explaining that there was no evidence suggesting that Husband paid anything for the coverage, was given an opportunity to “opt out” of the coverage, or was compensated less because he was provided the benefit.

The court expressly noted that Wife was not entirely without a remedy in this situation because a court will consider the “loss of insurance benefits” under an equitable distribution analysis. Thus, while Husband’s ongoing insurance benefits were not “marital property” subject to equitable distribution, the court would consider the fact that Wife was no longer going to have health insurance when it came to dividing up the marital property.

Are You Contemplating Filing for Divorce?

If you have recently filed for a New York divorce, or are considering filing for a divorce in New York, contact the Law and Mediation Offices of Darren M. Shapiro. Attorney Shapiro is a dedicated New York divorce attorney with extensive experience handling a wide range of family law issues, including divorce and separation agreements, child custody issues, and spousal maintenance concerns. To learn more about how Attorney Shapiro can assist you in your current situation, call 516-333-6555 to schedule a free consultation today.

See Other Blog Posts:

Can a Court Order the Payment of a Spouse’s Medical Expenses Following a New York Divorce?, Long Island Family Law and Mediation Blog, October 27, 2018

Who Pays for Health Insurance Following a New York Divorce?, Long Island Family Law and Mediation Blog, October 21, 2018