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Insurance presents first-impression issue

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The Indiana Court of Appeals determined today for the first time that post-retirement health insurance premiums paid by a former employer aren't a marital asset subject to a division.

In Anne M. Bingley v. Charles B. Bingley, No. 02A03-0904-CV-187, Anne Bingley appealed the division of assets in the dissolution of her marriage to Charles Bingley. The trial court order didn't include Charles' employer-paid, post-retirement health insurance premiums.

Anne argued the payments fall under subsection 2 of Indiana Code Section 31-9-2-98(b), as a retirement benefit not forfeited upon the termination of employment, and cited several Indiana cases that found pension benefits to be marital assets.

But the Court of Appeals ruled the premiums weren't a marital asset subject to division. The cases Anne cited involved monthly monetary payments made directly to the pension-holding spouse; Charles' benefit wasn't payable to him but was non-elective and couldn't be divided or transferred, wrote Judge Elaine Brown.

The appellate court found Gnerlich v. Gnerlich, 538 N.E.2d 285 (Ind. Ct. App. 1989), and Antonacopulos v. Antonacopulos, 753 N.E.2d 759 (Ind. Ct. App. 2001), to be instructive in that the underlying principle applied in those cases is that insurance policy coverage as part of an employee's retirement package may be included in the marital estate only when marital assets were used to obtain the benefits. Benefits that are purely supplemental are properly excluded from the marital estate, she wrote.

Judge Terry Crone wrote a concurring in result opinion in which he wondered if the Indiana General Assembly intended to define "retirement benefits" and "vested" in terms of the Internal Revenue Code. As it's currently written, I.C. Section 31-9-2-98(b) doesn't answer the question.

"If the legislature did intend to define 'retirement benefits' and 'vested' in terms of the Internal Revenue Code, then the health insurance premiums at issue would not be considered 'retirement benefits' and therefore would not be considered marital property subject to division," he wrote. "If the opposite is true, then we are left with the case law on which the majority relies as guidance for determining whether the premiums are 'retirement benefits' that are 'vested' under Indiana law."

He wants the legislature to address this perceived ambiguity.

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