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Children, Step Children, Ex Spouses and Benefits

In today's world with the failure rate of marriages in excess of 50% there are many blended family situations. This often poses questions about who can be covered under benefit packages with divorced and separated couples, especially those with dependents.

Let's talk about a single parent with two dependents that are currently covered under the parents benefits. The parent then co habits or marries another adult with three dependents. The new dependents can be added to the existing benefit package with most insurers. The contract does not usually specify the number of dependents nor how that dependency occurs.

The new spouse however may not be able to be covered. Let me explain. Under most benefit packages, insurance companies only allow one spouse. If an ex spouse is covered under a separation or divorce agreement arrangement, the ex spouse cannot automatically be "bumped" from the benefit package to allow the new spouse coverage. It can be a problem.

When negotiating separation or divorce agreements you should always look ahead to future situations that may occur. If there is a request to keep ex spouses on benefit packages as part of the settlement arrangements it would be best practices if you can negotiate the removal of a spouse from a benefit package in any number of situations.

If the ex spouse gains employment where benefits are offered to them, they should be removed. If the ex spouse co habits or marries another person with benefits, they should be added to that persons benefits if possible. If the supporting spouse co habits or remarries there should be provision that the ex spouse be removed from the benefits so the "new" spouse can be covered.

As you can see, this is not always cut and dried and becomes great fodder for the lawyers to work out. The purpose of this commentary is to bring these potential situations to your attention. Always check with your benefits administrator to confirm your situation.