Caldwell v. Caldwell - Importance of Health Insurance Provision in Divorce Agreement

Health insurance coverage has been a hot topic in recent years, as the premiums have soared and people with serious ailments find it next to impossible to secure coverage.

While health insurance might appear a seemingly minor consideration in the event of a divorce, our Fairfax divorce attorneys know the reality is that for some people, it will be a critical component of financial stability post-separation. Women, in particular, need to pay careful attention to this aspect.

A 2012 study conducted by the University of Michigan indicated every year, roughly 115,000 women lose their private health insurance following a divorce. Of those, more than half remain uninsured for several months or even years after becoming single. The problem is, many were dependent on their husband’s health care plans. Even those who had plans secured through their own employer may find the cost no longer affordable on just one income. Researchers found 11 percent of these women became insured after divorce.

The most affected group was divorced women between the ages of 50 and 64.

The recent case of Caldwell v. Caldwell, before the Court of Appeals of Virginia, arose from a trial court ruling that the divorce agreement required the husband to pay for his ex-wife’s health insurance premiums indefinitely, and further that he was required to pay for unreimbursed medical expenses for an unlimited duration after divorce. The husband appealed, but the appellate court affirmed.

According to court records, the pair were married in October 1968 and dissolved their union nearly four decades later, in June 2006. During their marriage, and at the time of their separation, both were employees and stockholders of a local publication operated out of their home. Per the terms of the separation agreement, the health insurance coverage, provided through that company, was to continue for the wife – paid for by the husband. The agreement indicated in the event of a divorce, the husband would be required to continue paying this expense, but would be allowed to select the least expensive policy that would provide substantially the same benefits. The agreement also clearly states the husband would agree to pay “any and all medical expenses” the wife incurred that insurance didn’t cover.

This was a smart consideration on the part of the wife’s attorney.

Six years after the divorce became final, the ex-wife sought to hold the husband in contempt of court for failure to pay her insurance or unreimbused medical expenses – roughly $20,000 out-of-pocket since 2007. The wife reported she learned after a 2007 doctor’s office visit that she no longer had health insurance. When she contacted her ex about this, he told her he could no longer afford it and she would have to find her own policy.

Having no other immediate choice, the wife purchased a policy online for $220 monthly, though this policy did not cover most expenses, including prescriptions. She therefore canceled the policy. From 2009 through 2013, when she was eligible for Medicare, she had no health insurance coverage.

It’s worth noting that at any point during this time, the wife could have sought to hold the husband accountable to pay her premiums, as was previously agreed.

However, she did send her ex the medical bills, which he never paid.

The husband would later argue he was not responsible to pay any expenses not first submitted to an insurance company. The trial court, and later the appellate court, disagreed. He was ordered to pay not only her current premiums, but also any outstanding medical bills dating back to the date of separation and attorney’s fees the wife incurred for being forced to bring this action.

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