REMINDER: A Failure to Timely Report a Divorce to the NYCDCC Welfare Fund May Have a Severe Impact on Your Finances, Health Coverage, and Family’s Health Coverage

June 11, 2018

Failing to report a divorce while you have a spouse listed as a dependent under the NYCDCC Welfare Fund (the “Fund”) may result in grave financial repercussions and the loss of your health coverage. This is especially true if your former spouse receives costly medical treatments after he/she is no longer eligible for coverage. Please read this explanation of the Fund’s rules and an example of how failing to follow these rules may impact you financially.      

Divorce Rules for Health Benefits- If you get a divorce, your former spouse will remain covered under the Fund until the last day of the month in which the judge signs your divorce judgment. It is extremely important that you provide a copy of your divorce judgment to the Fund as soon as possible so that your former spouse’s coverage is terminated at the end of the month in which the judge signed the divorce judgment. You and your former spouse will be liable for any benefits paid on behalf of your former spouse after the last day of the month in which the judge signed the divorce judgment. In addition, in order for your former spouse to be eligible for COBRA coverage, you or your former spouse must provide notice of your divorce within 60 days of the date of divorce. If the Fund does not receive notice of the divorce within 60 days of the divorce, your former spouse will lose his/her COBRA rights. Additionally, a delay in timely notification will make you (along with your former spouse) personally liable for any health claims paid by the Fund on behalf of your former spouse after he/she ceased to be eligible. Even if you think your former spouse has provided notice, we urge you to provide notice to eliminate any doubts since you will both be responsible for any claims paid in error. If you are a Retiree, your monthly premium will be adjusted to reflect the removal of your former spouse from your Welfare Fund Retiree Coverage.

Example- Johnny Carpenter’s divorce judgment is signed by a judge on April 11, 2018. Under the rules of the Fund, Johnny’s ex-spouse Linda’s coverage under the Fund ends on April 30, 2018. (If notice of the divorce is provided within 60 days, Linda can elect COBRA coverage for up to 36 months.) However, neither Johnny nor Linda notifies the Fund of their divorce and as a result, Linda remains listed as a dependent. In August of 2018, Linda is diagnosed with cancer. She immediately has surgery followed by radiation and chemotherapy treatments over the next several months, racking up $85,000 in medical claims, which are paid by the Fund since it had not been notified of the divorce. In January of 2019, Johnny finally notifies the Fund of his divorce at which time the Fund learns that it paid $85,000 in claims for which Linda was not eligible. Under the rules of the Fund, Johnny and Linda are now responsible for reimbursing the Fund $85,000. Additionally, since the Fund was not notified of the divorce within 60 days, Linda no longer has the option of electing and paying for COBRA coverage. Johnny and his other dependents will immediately lose their Welfare coverage unless and until the full amount due is paid to the Fund, and legal action may be taken against Johnny and Linda to recover the claims paid in error.       

As you can see from this example, failing to timely notify the Fund of a divorce and not having your ex-spouse properly removed as a dependent can have severe consequences. Johnny may not have even known that Linda was using her health coverage under the Fund after their divorce, but he and Linda are jointly responsible for this debt because they did not timely notify the Fund of their divorce. By not notifying the Fund, Johnny is risking his financial security and continued health coverage for himself and his children.  DO NOT put yourself in a situation where you end up owing the Fund a significant amount of money and losing your coverage, as well as the coverage of your other family members, due to not reporting your divorce in a timely fashion.

Remember — While COBRA is expensive, paying a monthly COBRA premium (after timely notifying the Fund of your divorce) is less expensive than incurring personal liability for claims and losing your coverage.

Also, remember that even if your divorce judgment or settlement agreement requires you to pay some or all of the cost of your former spouse’s health coverage after your divorce, this does not mean that your spouse remains eligible for coverage under the Fund unless COBRA is elected and paid for.

If you have questions about removing an ex-spouse from your coverage after a divorce, please contact our Member Services Department at (800) 529-FUND (3863).