There are a number of issues a couple must work through when going through a divorce or separation. Most of the time, people think of the common big issues such as spousal support, child support, child custody, and the division of property. However, sometimes there are issues that don’t necessarily make headlines but are still important to consider. Take for example insurance benefits. A recent decision from the Ontario Superior Court of Justice shows how important it is to follow the court’s direction on how to go about maintaining benefits for a spouse post-separation.
The parties were married in May 1993. They separated 12 years later in February 2005 and divorced in February 2018. Following their separation the husband maintained the wife as a beneficiary under his benefits plan, but removed her in 2007. However, the parties entered into a separation agreement in 2008. A provision in the separation agreement stated that the husband must maintain the wife as a beneficiary under his benefits plan. At the time the agreement was drawn up, the parties had not entered into relationships with new partners.
In 2011 the husband asked the wife if he could remove her as a beneficiary under his plan since she had obtained employment and had a benefits plan available through that job. The wife did not respond to this request, and the husband kept her on as a beneficiary. The husband entered into a common law relationship with a new partner in 2012 and once again asked the wife if she could be removed as a beneficiary. The wife gave her approval on this and was replaced as a beneficiary effective April 1, 2012.
The wife unfortunately lost her job in October 2013 and as a result also lost her benefits. Since she and the husband were not yet divorced, she asked him to place her back on his plan. The husband declined to do so, stating that his insurer said she was not entitled.
The husband provided documentation from his insurer stating their definition as “eligible dependent.” It stated,
“Your spouse by marriage or under any other formal union recognized by law, or a person of the opposite sex or of the same sex who is publicly represented as your spouse for a minimum of 12 consecutive months, is an eligible dependent. You can only cover one spouse at a time…. to be eligible, your spouse must be legally married to you, or be your partner of the opposite sex or the same sex who is publicly represented as your spouse for at least the last year…”
The wife was not satisfied with this explanation and commenced legal proceedings in 2015. By the time the trial came about, the husband had still not added the wife to his plan, nor did he provide any official documentation explaining that he had been directed not to do so. The court ordered the husband to reinstate the wife or pay her $8,000 if he failed to do so.
By the time this trial had taken place, the husband had still not reinstated the wife as a beneficiary under his plan. He also failed to pay the $8,000 in lieu of doing so. He would go on to provide the court with communications from his insurer that he could not have both his new partner and his wife on the plan, but the communication fell short of stating whether he could remove his new partner and reinstate the wife.
Despite being put on notice about pending litigation concerning the issue, the husband did not seek to collect additional information. As a result, he was found in contempt and ordered to pay the amount originally set out as well as interest.
At NULaw, our experienced family lawyer can guide you through the process of making post-separation and post-divorce amendments. Contact us online or at 416-481-5604 to book a consultation, discuss your options, and ensure that you and your children are protected in changing circumstances.