Domestic Relations Law §255, Settlement Agreements and Judgments of Divorce

On October 9, 2009, Domestic Relations Law §255 will become effective.  DRL §255 is a replacement of DRL §177 which required:

1. Prior to accepting and entering as a judgment any stipulated agreement between the parties in the action for divorce, the judge shall insure that there is a provision in such agreement relating to health care of each individual.  Such statement shall either (a) provide for the future coverage of the individual; or (b) state that the individual is aware that he or she will no longer be covered by his or her spouse’s health insurance plan and that the individual will be responsible for his or her own health insurance coverage. Every agreement accepted by the court must contain the following statement, signed by each party, to ensure that the provisions of this subdivision are adhered to:

I, (spouse), fully understand that upon the entrance of this divorce agreement, I may no longer be allowed to receive health coverage under my former spouse’s health insurance plan. I may be entitled to purchase health insurance on my own through a COBRA plan, if available, otherwise I may be required to secure my own health insurance.

(Spouse’s signature) (Date)

2. Prior to rendering a decision in an action for divorce, the judge shall ensure that he or she notifies both parties that once the judgment is entered, a person may or may not be eligible to be covered under his or her spouse’s health insurance plan, depending on the terms of the plan. If, prior to accepting an agreement and entering the judgment thereon, the judge determines that the provisions of this section have not been met, the judge shall require the parties to comply with the provisions of subdivision one of this section and may grant a thirty day continuance to afford the parties an opportunity to procure their own health insurance coverage.

DRL§177 has been repealed to resolve the numerous practical problems it presented to the litigants.  Typical problems involved modifying previously executed separation and property settlement agreements.  Its replacement, DRL §255 provides as follows:

A Court, prior to signing a judgment of divorce or separation, or a judgment annulling a marriage or declaring the nullity of a void marriage, shall ensure that:

1. Both parties have been notified, at such time and by such means as the Court shall determine, that once the Judgment is signed, a party thereto may or may not be eligible to be covered under the other party’s health insurance plan, depending on the terms of the plan. Provided, however, service upon the defendant, simultaneous with the service of the summons, of a notice indicating that once the judgment is signed, a party thereto may or may not be eligible to be covered under the other party’s health insurance plan depending on the terms of the plan, shall be deemed sufficient notice to a defaulting defendant.

2. If the parties have entered into Stipulation of Settlement/Agreement on or after the effective date of this section resolving all of the issues between the parties, such settlement/agreement entered into between the parties shall contain a provision relating to the health care coverage of each party; and that such provision shall either (A) provide for the future coverage of each party, or (B) state that each party is aware that he or she will no longer be covered by the other party’s health insurance plan and that each party shall be responsible for his or her own health insurance coverage, and may be entitled to purchase health insurance on his or her own through a COBRA option, if available. The requirements of this subdivision shall not be waived by either party or counsel and, in the event it is not complied with, the Court shall require compliance and may grant a thirty-day continuance to afford the parties an opportunity to procure their own health insurance coverage.

As a result of its enactment, this section of the Domestic Relations Law will give judges greater discretion in insuring the time and method of notification of health insurance provisions and will eliminate DRL §177′ mandatory language, and replace with several different options that provide notification of the parties with respect to their health care coverage.   As stated in the Legislative Memorandum:

In sum, this measure should guarantee the most efficient processing of divorce actions while achieving section 177′s original objective, viz., to insure an awareness of the impact of divorce proceedings upon health insurance coverage, at less cost to and with fewer complications for the divorce litigants the statute sought to protect.

Divorce attorneys will have a greater degree of flexibility in providing appropriate notification during the course of divorce and that will certainly benefit their clients.

Tags: , , , , , , , , , , , , , , , , ,

Leave a Reply