Benefit coverage for former spouses

When spouses separate or divorce, they may agree the employed spouse will keep the non-employed spouse covered under the benefit plan. Is this type of agreement binding on the employer or the insurance carrier?

Colin Gibson
Question: When spouses separate or divorce, they may agree the employed spouse will keep the non-employed spouse covered under the benefit plan. Is this type of agreement binding on the employer or the insurance carrier?

Answer: Where employee benefits are provided under a contract of insurance, the contract will contain provisions that specify when benefit coverage for a non-employed spouse or former spouse terminates. In most cases the definition of “spouse” in the insurance contract will result in the termination of coverage when parties divorce.

Any agreement reached between an employee and a spouse or former spouse regarding the continuation of benefits will not be binding upon the employer or the insurance carrier if such agreement is inconsistent with the provisions of the insurance contract.

Experienced matrimonial lawyers are aware of this issue, and will usually specify in their clients’ agreement that benefit coverage will continue to be provided for the non-employed spouse as long as such coverage remains available under the applicable plans.

Where benefit coverage for the non-employed spouse terminates, a claim for the loss of the coverage, or for the cost of its replacement, will typically be included as part of the spousal maintenance claim.

Colin G.M. Gibson is a partner with Harris & Company in Vancouver. He can be reached at [email protected] or (604) 891-2212.

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