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Vested employer-provided health-insurance premiums are an asset

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The Indiana Supreme Court held that employer-provided health-insurance benefits constitute an asset once they have vested in a party to the marriage, and addressed for the first time the possible methods of valuing these benefits in marriage dissolution. This conclusion led one justice to dissent because it disrupts existing dissolution property division law.

Anne Bingley wanted the premiums paid by Charles Bingley’s former employer to a health-insurance company as part of his pension plan to be considered property subject to division in their divorce. The trial court held the benefits didn’t constitute a marital asset, which the Indiana Court of Appeals affirmed.

Four of the justices reversed, holding that employer-provided health-insurance benefits do constitute an asset once they have vested in a party to the marriage. They found Charles’ health-insurance benefits constitute an intangible asset, and whether a right to a present or future benefit constitutes an asset that should be included in marital property depends mainly on whether it has vested at the time of the dissolution. Navistar, from which he retired, was paying his premiums at the time the marriage ended and he had the present right to enjoy the benefits.

Chief Justice Randall T. Shepard noted the illiquidity of his benefits is relevant to the value a court may assign to an asset but not to whether benefits constitute an asset in the first place.

In Anne M. Bingley v. Charles B. Bingley, No. 02S03-1002-CV-122, the justices described three possible methods for valuing these health-insurance benefits, but noted other methods may be more appropriate in other circumstances.

The justices were unable to find any court opinions in which two of the methods were used: a trial court valuing health-insurance benefits by considering the cost of obtaining comparable alternative benefits, or by considering the cost of providing medical services covered by health insurance.

The final method – valuing the benefits by considering the premium subsidy from the employer, has been assumed to be the appropriate method by some academics and practitioners, noted the chief justice.

Then the question arises as to how to divide the assets between the parties. There is a rebuttable presumption that an equal division is just and reasonable but a party may rebut that presumption.

The majority remanded for the valuation of the benefits and reconsideration of the division of assets.

Justice Brent Dickson dissented because he believed the majority opinion “expands the division of marital property contrary to statute, intrudes upon the legislature’s public policy prerogatives, and significantly and harmfully disrupts Indiana marriage dissolution law and practice.”

“One extremely troubling application of today’s ruling is its impact in dissolution cases involving Hoosiers with retirement medical benefits from their United States military service,” he wrote. Usually, a non-military spouse will almost always lose this benefit when divorcing, but under today’s holding, the military retiree’s health benefits would be considered divisible marital property and would warrant a sizeable valuation because of the potentially lengthy time the military retiree would be eligible for the lifetime benefit.

This would likely preclude a divorcing military retiree from retaining any other marital property and require post-dissolution periodic property settlement payments made to the former spouse, something Justice Dickson doubts the legislature intended.

“Today’s holding also introduces other substantial challenges to the valuation and equitable distribution of marital property as parties and courts attempt to apply this new standard to the wide variety of non-pension, assured future benefit packages that are becoming more commonplace with many employers. For example, Hewlett-Packard (HP) provides discounts to its retirees, allowing them to purchase HP products ranging from laptops to printer ink cartridges at a reduced price,” he wrote. “Assigning a present value to such vested benefits will be a formidable if not impossible task.”
 

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  1. Indiana's seatbelt law is not punishable as a crime. It is an infraction. Apparently some of our Circuit judges have deemed settled law inapplicable if it fails to fit their litmus test of political correctness. Extrapolating to redefine terms of behavior in a violation of immigration law to the entire body of criminal law leaves a smorgasbord of opportunity for judicial mischief.

  2. I wonder if $10 diversions for failure to wear seat belts are considered moral turpitude in federal immigration law like they are under Indiana law? Anyone know?

  3. What a fine article, thank you! I can testify firsthand and by detailed legal reports (at end of this note) as to the dire consequences of rejecting this truth from the fine article above: "The inclusion and expansion of this right [to jury] in Indiana’s Constitution is a clear reflection of our state’s intention to emphasize the importance of every Hoosier’s right to make their case in front of a jury of their peers." Over $20? Every Hoosier? Well then how about when your very vocation is on the line? How about instead of a jury of peers, one faces a bevy of political appointees, mini-czars, who care less about due process of the law than the real czars did? Instead of trial by jury, trial by ideological ordeal run by Orwellian agents? Well that is built into more than a few administrative law committees of the Ind S.Ct., and it is now being weaponized, as is revealed in articles posted at this ezine, to root out post moderns heresies like refusal to stand and pledge allegiance to all things politically correct. My career was burned at the stake for not so saluting, but I think I was just one of the early logs. Due, at least in part, to the removal of the jury from bar admission and bar discipline cases, many more fires will soon be lit. Perhaps one awaits you, dear heretic? Oh, at that Ind. article 12 plank about a remedy at law for every damage done ... ah, well, the founders evidently meant only for those damages done not by the government itself, rabid statists that they were. (Yes, that was sarcasm.) My written reports available here: Denied petition for cert (this time around): http://tinyurl.com/zdmawmw Denied petition for cert (from the 2009 denial and five year banishment): http://tinyurl.com/zcypybh Related, not written by me: Amicus brief: http://tinyurl.com/hvh7qgp

  4. Justice has finally been served. So glad that Dr. Ley can finally sleep peacefully at night knowing the truth has finally come to the surface.

  5. While this right is guaranteed by our Constitution, it has in recent years been hampered by insurance companies, i.e.; the practice of the plaintiff's own insurance company intervening in an action and filing a lien against any proceeds paid to their insured. In essence, causing an additional financial hurdle for a plaintiff to overcome at trial in terms of overall award. In a very real sense an injured party in exercise of their right to trial by jury may be the only party in a cause that would end up with zero compensation.

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