Who pays for health insurance after the divorce?

Even if you can stay on an ex-spouse's health insurance (which we cover in this previous post), there are two potential costs of staying on an ex-spouse's insurance.

The first is the actual cost of the plan. If the plan participant would qualify for a lower cost plan, for instance if the plan participant is single with no children, then the "additional cost" must be paid by either the plan participant or their ex-spouse. Usually the ex-spouse seeking this coverage will pay the "additional cost" but this must be defined in a court order or agreement.

In addition, the IRS defines excludaible fringe benefit costs to include only costs for spouses and other dependents. Ex-spouse coverage is not excludible and is therefore a taxable benefit. Although often overlooked by employers, many employers have started to treat these ongoing benefits to ex-spouses as taxable income to the employee.

For more information about the taxation of health insurance benefits read the following article: Health Insurance Taxation Issues Post Divorce by Justin Kelsey and Chris Chen.

Comments

2024 U.S. Presidential Party Platforms - What are the policy positions that could affect families?

While the laws that affect family formation, marriage and divorce are often made at the state level, there are also many policies and laws at the federal level that affect families and children. Just some examples from recent years that have impacted families in my mediation practice include changes to the federal tax laws (such as the elimination of the alimony tax deduction ) and U.S. Supreme Court rulings on same sex marriage and reproductive health rights. In just over a month, the United States presidential election will have a significant impact on these federal policies going forward, and could choose the next appointments to the U.S. Supreme Court as well. In 2016 and 2020 we shared what each presidential platform said about families and policy regarding family formation and dissolution, and below we'll provide you an update on the 2024 presidential platforms. As Maya Angelou said, "When someone shows you who they are, believe them the first time."...

Updating your Divorce Agreement Template - More Lessons from Cavanagh v. Cavanagh

We recently posted a lengthy review of the the Massachusetts SJC decision in Cavanagh v. Cavanagh (2002) which included some recommendations for drafting divorce agreements, also typically called Separation Agreements. The Cavanagh case is best known for it's clarification of how the courts should evaluate support calculations when a case may have both alimony and child support. However, the case also contained numerous rulings that should make practitioners review their Separation Agreement templates and change some of the ways in which they may have previously drafted certain sections. In this post we'll share actual language from the Gray Jay Endeavors, LLC form Separation Agreement template which addresses each of the issues raised by the Cavanagh decision. If you are a professional interested in purchasing the full Separation Agreement template, check out Gray Jay's forms subscription which includes editable Massachusetts court forms and financial st...

Massachusetts Family Court Financial Statement - Instructions & Best Practices

During a divorce, or other case in the Massachusetts Probate & Family Court that involves your finances, such as a child support case, you will likely be required to file a court form Financial Statement. In Massachusetts there are two versions of this form: a "short form" if your income is under $75,000 and a "long form" if your income is $75,000 or more. Many people find these forms confusing and we've compiled a list of helpful information for filling them out. First , to access the forms, the court has provided pdf or online versions here: Massachusetts Rule 401 Short Form Financial Statement (pdf) Massachusetts Rule 401 Long Form Financial Statement (pdf) There are also some basic instructions provided by the court explaining the sections of the forms and providing access to a Schedule A (for self-employed people) and Schedule B (for rental income): Massachusetts Rule 401 Short Form Financial Statement Basic Instructions Massachusetts Rule 401 Long F...

Search This Blog