New York Divorce and Family Law Blog : New York Divorce Lawyer & Attorney : Clement Law Firm : Family Law Serving Manhattan, Westchester County, Brooklyn, Queens, Bronx, New York City

The Huffington Post reported on a sad and frightening phenomenon- elderly couples forced to divorce to obtain relief from medical bills and to qualify for social security benefits.

The article details the plight of Mary McCurnin and her husband Ron Bednar. In 2003, the couple declared bankruptcy after their insurance covered only 10 percent of the treatment costs for her breast cancer and his intestinal bleeding. In 2004, McCurnin's breast cancer returned, and Bednar underwent open heart surgery.

The couple is broke and unemployed. Mary, however, was previously married. Her first husband pre-deceased her and, but for the fact that she is now married to Ron, Mary would be entitled to receive her social security survivor’s benefit from her previous marriage. The Social Security Administration told her, she cannot have the survivor benefit if she's married to someone else.

So, in order to qualify for the survivor’s benefit, she is divorcing Ron.

She could divorce him now to collect short-term benefits on her earlier husband, and then at some later point after age 60 remarry him without it affecting her widow's benefits," said Lowell Kepke, a spokesman for the San Francisco regional office of the Social Security Administration. "Congress put that in precisely to stop encouraging elderly couples from not getting married."

But the widow's benefits aren't the only reasons for the divorce. McCurnin and Bednar could see a tax advantage. A married couple filing joint tax returns can earn less before their Social Security benefits are taxed than two people filing separately.

To me, it is absurd that a committed and happily married couple must divorce for their financial survival.  As the population ages and in the absence of some type of healthcare reform, will couples be forced to divorce as a means of medical expense planning in order to protect their jointly accumulated savings? If so, the sad case of Mary McCurnin and Ron Bednar will be the tip of the iceberg.

 

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The New York Times ran a front page story detailing how the availability of medical insurance has become a major consideration in the decision to divorce or to wed.

In a poll conducted this spring by the Kaiser Family Foundation, a health policy research group, 7 percent of adults said someone in their household had married in the past year to gain access to insurance. The foundation cautions that the number should not be taken literally, but rather as an intriguing indicator that some Americans “are making major life decisions on the basis of health care concerns.”

The issue of medical coverage has long been a consideration in divorce. In fact, many couples, after negotiating their settlement agreements, delay seeking an immediate divorce and, instead, opt to divorce on the basis of their living separate and apart for a year pursuant to a written separation agreement. The one year separation allows a party who would otherwise be without access to medical insurance to remain eligible for medical coverage on the basis of the marriage. Some couples put off the divorce for even more than a year for this very reason.

Amplifying this consideration, New York requires parties to acknowledge that they are aware that they will no longer be allowed to receive health coverage under their former spouse's health insurance plan once the divorce is granted.

Following the divorce the parties may be eligible to continue medical coverage under COBRA (which can be prohibitively expensive) or purchase insurance on their own
 

 

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A new law  (Assembly bill A08273A) was recently enacted that requires parties in an action for divorce to be made aware of the potential loss of their health care coverage obtained through their spouse's health insurance.

The law requires that any agreement between parties in a divorce action contain the following language:

 I fully understand that upon the entrance of this divorce agreement, I may no longer be allowed to receive health coverage under my former spouse's health insurance plan. I may be entitled to purchase health insurance on my own through a COBRA option, if available, other-wise I may be required to secure my own health insurance.

The judgment of divorce will reiterate that the parties understand and have acknowledged the potential loss of medical coverage.

According to the legislative memo the justification for the bill is as follows:

Divorce settlements can be a long, arduous process for all parties involved, therefore it is important to ensure that throughout the course of the negotiations, parties are aware of all issues relating to an individual's well-being once a settlement is reached. Whether or not a party to a divorce action has health insurance coverage once a settlement is reached is of crucial importance, and explicit provisions addressing these facts should be included in any rendered judgment. This legislation ensures that parties who receive health coverage under their spouse's plan are made aware of their loss of health insurance coverage upon the issuance of a divorce.

Although I am unaware of any cases in which a party to a divorce, represented by counsel, entered into an agreement under the false impression that he/she would remain covered by their spouse’s medical insurance, it is certainly wiser to err on the side of requiring full and complete disclosure of all relevant facts.

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