An Ontario court recently explored what happens to shared health and medical benefits and life insurance following a divorce.

The Parties

The parties moved in together in August 1987 and were married in May 1990. They had two children together. Although the ex-husband was initially the primary breadwinner, over time the ex-wife’s earnings surpassed his. The ex-husband became disabled during the marriage and remains permanently disabled. His income is limited to CPP and long-term disability. Those earnings will cease at age 65.

The parties separated in June 2012, but continued to live together, sharing household expenses 50/50. An order to sell the matrimonial home was obtained in June 2014, and the house was sold in March 2015 for approximately $312,000. The ex-wife declared bankruptcy in July 2015. In November of that year, the ex-husband obtained an order permitting him to proceed against any of the wife’s assets that were exempt from the bankruptcy.

Request for Order to Remain on Ex-Wife’s Benefits

After the separation, the ex-husband requested an order for the ex-wife to delay the divorce for five years and to maintain him on her health and dental benefits during that time.

In the alternative, the husband requested that:

• if the ex-wife chose to proceed with the divorce, to keep him on the benefits; or
• if the ex-wife could not maintain him on her benefits for any reason, to pay up to $350/month for additional insurance which would replace the benefits offered to him under her plan.

The husband also sought a copy of the ex-wife’s benefits handbook so that he could be aware of what benefits were available to him, and so that he could be reimbursed as soon as possible.

In addition, he sought an order maintaining him as the irrevocable beneficiary of the ex-wife’s life insurance policy, in trust of their children, of an amount of no less than $200,000.

Should the Ex-Husband Retain Access to Benefits?

The court considered whether the ex-husband should retain access to the ex-wife’s benefits. The ex-wife argued that he could not request something that he had not previously pled. The court disagreed with this argument, noting that the ex-husband was not barred from making such a request simply because he had not previously done so, but did note that any access that he may have to continued benefits would depend on the ex-wife’s cooperation, and on the policy of the insurance company.

The court went on to note that if the ex-husband no longer had access to the ex-wife’s benefits, he would suffer “a significant loss in the form of increased monthly expenses and/or insurance premiums estimated at $350/month”. Such a loss was foreseeable and directly connected to the dissolution of the marriage.

Should the Ex-Wife Be Obligated to Maintain Life Insurance?

The court noted that it had jurisdiction to require a spouse with existing life insurance to designate a beneficiary, but did not have the power to require a spouse to obtain life insurance or to reinstate life insurance where they had cancelled it.

The court went on to note that, in these particular circumstances, it would be appropriate to ensure that the ex-wife’s existing life insurance is designated in favour of the husband “to the extent of the outstanding child support obligation owed to him”.

The Court’s Decision

Justice Woodley ordered that:

• The ex-wife must provide the ex-husband with a copy of her benefits handbook so that he is aware of what benefits are available to him and the ex-wife will “ensure that [the ex-husband] is forthwith reimbursed”;
• If the ex-wife were to stop maintaining the ex-husband on her benefits policy for any reason, she must pay him half the cost of any insurance needed to cover the benefits that he had under her plan, up to a maximum of $175/month for five years;
• The ex-wife is to maintain a $58,000 life insurance policy as security for her child support obligations, naming the ex-husband as the designated beneficiary for as long as she has a child support obligation;
• Either party can seek a divorce from the other on a without costs basis.

To speak with an experienced Windsor lawyer about divorce or other family-related issues, call Jason P. Howie at 519.973.1500 or contact us online. We view separation and divorce holistically, addressing all collateral issues that may lead to future legal problems. For example, we may examine your retirement plan, your Will or your child custody arrangement and recommend modifications to protect your interests. Many of our clients are referred to us by former and current clients, as well as by lawyers, accountants and other professionals.