New Hampshire Family Law Blog : New Hampshire Divorce Lawyer & Attorney : Crusco Law Firm : Family Law, Custody, Child Support : Manchester, New Hampshire, Massachusetts

My health insurance coverage is through my spouse’s employer. Will I be able to stay on the health insurance plan after I am divorced?

You may be able to continue coverage through a new law (RSA 415:18, VII b) that became effective on January 1, 2008 that allows a former spouse to continue coverage on the subscriber employee’s group health insurance policy for up to three years following the final decree of divorce. The law applies to both medical and dental coverage. Under the provisions, of the new law, a former spouse remains eligible for coverage until one of the following events occurs, whichever is earliest:

1)      Three (3) years from the final decree of divorce or legal separation;

2)      Remarriage of either the covered employee of the former spouse;

3)      Death of the covered employee; or

4)      Such earlier time as provided in the final decree.

The former spouse has the right to continue coverage under this law only for so long as the employee subscriber maintains coverage under the same group health insurance plan. If the employee is terminated or leaves employment, the former spouse’s eligibility is not transferrable to the new employer.

Unlike COBRA and New Hampshire’s continuation coverage statute which allows additional premiums to be charged, the insurers are required to make the health insurance coverage available without additional premiums as if the divorce had not occurred. This is a key aspect of the law, since often times COBRA premiums are cost prohibitive and unaffordable to the family member who needs to continue coverage. Additionally, the employer is required to continue to contribute to the former spouse’s coverage as if the divorce had not occurred. The court may assign or the parties may agree as to how the employee’s portion of the premiums will be paid, either by the employee, by the former spouse, or shared by the parties.

As a caveat, the law applies only to group health insurance policies, and employer plans that are self-insured are not subject to the law’s continuation requirements. Several large private and state and federal government employers, such as Wal-Mart, Fidelity, and the State of New Hampshire, are self-insured and so those with former spouses who work for these self-insured employers will not be able to continue coverage under RSA 458:18, VII.

This new law supplements the COBRA benefits and continuing coverage statute that are all ready in place. If a former spouse is not eligible, e.g. remarriage of either party or the court has not allowed coverage under this statute, COBRA benefits may still be available to provide health insurance coverage.  

• Email This
• Print
• Comments (5)
• Trackbacks
• Share Link

During a divorce, the tax consquences of a settlement often take a backseat to heated issues such as parenting rights and asset division. However, tax consquences can have a very big impact on the outcome of a case and are an important factor to consider.  Attorney Jason C. Brown of Brown Law Offices, P.A. posted an informative piece on his Minnesota Divorce and Family Law Blog with tax tips for divorcing couples. Attorney Brown suggested the following issues to consider during a divorce:

1. Child Support. Child support is not income to the recipient and is not deductible for the payer. Keep this in mind if your spouse is seeking alimony. Child support payments that they receive are not taxable and, as a result, increase their net income each month dollar for dollar. As a result, the "need" of your spouse will be diminished and you may be able to argue that their imputed gross income exceeds their gross pay coupled with untaxed child support.
2. Alimony. Alimony is income to the recipient and is deductible for the payer. High income earners can reduce their taxable income by paying alimony. If your spouse's tax bracket is low, the government winds up picking up the tab for a good share of the alimony obligation.
3. Sale of Homestead. The sale of the marital homestead usually does not involve a taxable event. Capital gains (up to $500,000) from the sale of your marital homestead are not taxable if you've lived there for two of the last five years. Nor is a transfer of title to the residence, allowing your spouse to keep some or all of the equity. Many couples opt to forego alimony payments in, instead, pay a disproportionate property settlement to their spouse. In other words, they "buy off" alimony by giving a larger share of home sale proceeds, or equity, to their spouse. The result? No tax implications for either. Ideal for alimony recipients in a high tax bracket.
4. Filing Status. The status of your marriage on December 31 of the relevant year determines whether you file as single or married. If you are divorced by that date, you file as single for the entire year. If your case appears to be coming to a close near the end of the year, best to speak with a tax preparer about the consequence of holding up at bit or expediting matters. We find that courts are usually willing to facilitate bringing matters to a close by the end of the year if tax implications in doing so are substantial.
5. Dependents. While the law provides that the custodial parent is entitled to claim the relevant dependency exemptions, most couples agree to share them. Offering a non-custodial parent the right to claim the dependency exemption under the condition that their child support is current at the end of the relevant tax year provides them with incentive to keep current with payments.
6. Child Care Credit. Custodial parents who incur work-related child care costs can deduct up to 30% of the cost. It is for that reason that the child support guidelines usually require a custodial parent to assume responsibility for a greater share of daycare expense.
7. Liabilities and Refunds. Taxes owed, or refunds received, are usually treated as "marital" and are, therefore, split equally among the parties. In the heat of the moment, some spouses will intercept a tax refund and cash it without the other's knowledge. All funds must be accounted for and it is likely that if they do so their share of the final property settlement will be reduced proportionately. Because income is "marital," a tax liability is a shared responsibility.
8. Attorney Fees. Any fees paid to a lawyer for tax advice are deductible. Ask your attorney for to break out all billable time devoted to tax issues and you can save big.

A good family law attorney will point out these and other issues to consider during your divorce. It is also important to discuss your divorce and the tax consquences of any settlement with a knowledgeable accountant.

• Email This
• Print
• Comments
• Trackbacks
• Share Link

Until today, I had never considered child support enforcement as an election issue, especially with all the hot topics in this year's presidential election. Usually issues such as the economy and the war in Iraq get all the press. However, I read a very interesting blog post from Attorney Stephen Worrall on his Georgia Family Law Blog titled Presidential Election 2008: About Child Support that discusses child support and enforcement issues in the election. Although family law matters are usually dealt with on a state level, there are family issues such as child support enforcement or abuse and neglect of a child that the federal government addresses on a national level.  Knowing where each candidate stands on these kind of issues can be an important part of the decision making process.

John McCain does not have child support issues listed on his campaign or Senate website, nor has he introduced legislation regarding it. However, Senator McCain does have a lenghty voting history compiled by Attorney Worrall.

In 1988 he voted in favor of the 1988 Family Support Act, which required each state to build a single, automated system for child support collection and distribution. Eight years later he supported further changes to the child support infrastructure, which were folded into the 1996 bill that overhauled welfare. The bill pressed automation requirements further, expanded states’ authority to establish paternity and toughened enforcement measures.      

McCain also was in the Senate when it passed the 1998 Child Support Performance Incentive Act with unanimous consent. It established five benchmarks for good performance on child support enforcement that states needed to meet to qualify for additional federal funding.

Barack Obama has included child support enforcement in his campaign platform and has directly spoken about issues such as responsible fatherhood. Attorney Worrall discusses a recent bill introduced by Senator Obama regarding child support enforcement:

The Responsible Fatherhood and Healthy Family Act, is sponsored by Obama and Democratic Sen. Evan Bayh of Indiana. In addition to restoring funding, it includes provisions to promote fatherhood and healthy parenting and bars states from treating imprisonment as “voluntary unemployment.” It also ensures all collections go to families, rather than to reimburse the state for money spent on welfare payments to the custodial parent and child.

• Email This
• Print
• Comments
• Trackbacks
• Share Link