Retirement and Divorce - Are Paid Health Insurance Premiums An Asset?
[A]ll the assets of either party or both parties, including:
(1) a present right to withdraw pension or retirement benefits;
(2) the right to receive pension or retirement benefits that are not forfeited upon termination of employment or that are vested (as defined in Section 411 of the Internal Revenue Code) but that are payable after the dissolution of marriage; and
(3) the right to receive disposable retired or retainer pay (as defined in 10 U.S.C. 1408(a)) acquired during the marriage that is or may be payable after the dissolution of marriage.See Ind. Code § 31-9-2-98(b).
In a recent Court of Appeals case, the question was whether a benefit that caused Husband's post-retirement health insurance premiums to be paid is an asset of the marriage and subject to division by the court. The answer is, no, but the interesting part of the question is why the court found this way. It is important to know the benefit was paid directly to the insurance provider, not to the Husband. The COA explained that since the benefit was not payable to the Husband and as he could not elect to receive cash or some other benefit in lieu of the premium payments, the benefit was non-elective and not subject to division.
Had the Husband received the premium payment directly, as a payment for him to pay his health insurance premiums, then the court would likely have held otherwise.
However, a concurring opinion noted that the benefit could be properly considered as future income and be treated in same manner as evidence of future earning ability. In this regard, while the benefit could not be considered to be an asset of the marriage, it could be considered in the determination of how the assets should be split.