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Nebraska Divorce - COBRA


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We've received a divorce decree from a participant in Nebraska.  Pursuant to the signed decree: 'For the purposes of continuation of health insurance coverage, the Decree shall become final and operative six months after the Decree is entered."

 

Question: Has anybody dealt with this before?  I have seen mention of this situation on Benefitslink threads, but curious how it was resolved practically...   because the plan is self-funded would ERISA preemption apply?  Or because of the manner in which it is worded - that for health insurance, the divorce isn't effective until six months, the COBRA qualifying event doesn't happen until 6 moths?

Nebraska Statue Below:

42-372.01. Decree; when final.

(1) Except for purposes of appeal as prescribed in section 42-372, for purposes of remarriage as prescribed in subsection (2) of this section, and for purposes of continuation of health insurance coverage as prescribed in subsection (3) of this section, a decree dissolving a marriage becomes final and operative thirty days after the decree is entered or on the date of death of one of the parties to the dissolution, whichever occurs first. If the decree becomes final and operative upon the date of death of one of the parties to the dissolution, the decree shall be treated as if it became final and operative the date it was entered.

(2) For purposes of remarriage other than remarriage between the parties, a decree dissolving a marriage becomes final and operative six months after the decree is entered or on the date of death of one of the parties to the dissolution, whichever occurs first. If the decree becomes final and operative upon the date of death of one of the parties to the dissolution, the decree shall be treated as if it became final and operative the date it was entered.

(3) For purposes of continuation of health insurance coverage, a decree dissolving a marriage becomes final and operative six months after the decree is entered.

(4) A decree dissolving a marriage rendered prior to September 9, 1995, which is not final and operative becomes operative pursuant to the provisions of section 42-372 as such section existed immediately preceding September 9, 1995.

Source:Laws 1995, LB 544, § 2; Laws 1997, LB 434, § 1; Laws 2000, LB 921, § 34.
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IBNR?

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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  • 3 months later...

OP what did you end up doing? I know this is out-dated but I just stumbled on it and I'm curious.

As plan sponsor (and without doing any research into it) my initial reaction probably would've been: I am not a party to this divorce so that judge can order whatever ridiculous thing he wants and that has nothing to do with me. A marriage is not dissolved for some purposes and not for others; a marriage either is or it is not. Therefore, for purposes of the Plan I administer, this decree dissolving this marriage becomes effective on the earliest date mentioned in this maniacal judge's list of different dates on which the dissolution of this marriage becomes effective. He needs to make up his mind and decide when this marriage is dissolved. And if he refuses to make up his mind, I'll make it up for him.

Additionally, a divorce decree that requires one spouse to continue health insurance on another spouse for a certain period of time after a divorce has nothing to do with the date on which a QLE occurs. The QLE occurs when the divorce is final. And if your PDs say ex spouses aren't eligible as of the date of divorce, that means they aren't eligible as of the date the divorce is final. The non-employee spouse will still be entitled to COBRA. And if the employee is still under an obligation to provide the ex-spouse with health insurance for a period of time after the divorce is final, s/he may continue to do so - as a COBRA participant.

The law is already complex enough without adding this kind of nonsensical "creativity" into it. Call a spade and kick the ex spouse off the plan.

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@tsrl01 @Johearain  Any state order purporting to extend active coverage beyond the point the plan would cause the spouse to lose eligibility is preempted by ERISA and should be ignored.

The only exception would be if there is a state insurance law requiring extension of active coverage, and the plan is fully insured and sitused in that state.  The only state I'm aware of with such a state insurance mandate is Massachusetts.  

Full summary here: 

https://www.theabdteam.com/blog/erisa-preemption-state-court-orders-2/

Effect of Preemption: Court Order Not Effective Against Plan

The example you raise is a court order purporting to require an individual to cover a former spouse under a health plan.  For purposes of an employer-sponsored group health plan subject to ERISA, the order is not enforceable against the plan.

In other words, where there is a court order purporting to require an individual to cover a former spouse under an employer-sponsored group health plan subject to ERISA, the order is not enforceable against the plan.  The order simply has no effect.

Plan Terms Govern Eligibility: Former Spouses Not Eligible

Instead, the written terms of the plan govern eligibility.  The plan terms in virtually all cases do not offer coverage to a former spouse, and therefore the employee’s former spouse is not be eligible for coverage.  The former spouse’s only option to continue coverage is through COBRA.

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