Can court force employer HSA contributions be used for ex-spouse 40% uncovered medical expenses

[Chameleon420]

Arizona

Greetings! I'm new to the site so forgive me if a particular format is not followed.

My ex and I divorced in 2006 with one common child who is now 17 years of age. The court ordered I was to pay 60% of any uncovered medical expenses, such as deductibles and what not...the ex was ordered to pay the remaining 40%. In 2013, my employer established a HDHP with a corresponding HSA account. My employer covers the $3000 deductible with employer contributions, so I'm not out of pocket on that expense. I also make payroll contributions to the HSA myself. Also, My employer pays 100% of medical insurance on myself and 70% of dependent medical insurance. I pay the remaining 30% dependent medical insurance. My ex pays/paid zero into the HSA or anything for our child's medical insurance. My ex never followed the court orders of exchanging financial information every 2 years. She has now since learned that I have an HSA with employer contributions. She refuses to pay her 40% of uncovered medical expenses for our child unless I pay 100% of the $3000 deductible first out of the HSA employer contributions. Furthermore, she has NEVER reimbursed me any of the 40% for uncovered medical bills since the 2006 divorce...even prior to the HSA .Question - 1) Does the ex have a valid claim to my HSA after our divorce and not paying her 40% portion until I pay the deductible 100%? 2) What if I had already used the $3000 for dental work for myself that is not counted as part of meeting the medical insurance deductible? Thank you very much for your assistance.

 

[LdiJ]

Arizona

Greetings! I'm new to the site so forgive me if a particular format is not followed.

My ex and I divorced in 2006 with one common child who is now 17 years of age. The court ordered I was to pay 60% of any uncovered medical expenses, such as deductibles and what not...the ex was ordered to pay the remaining 40%. In 2013, my employer established a HDHP with a corresponding HSA account. My employer covers the $3000 deductible with employer contributions, so I'm not out of pocket on that expense. I also make payroll contributions to the HSA myself. Also, My employer pays 100% of medical insurance on myself and 70% of dependent medical insurance. I pay the remaining 30% dependent medical insurance. My ex pays/paid zero into the HSA or anything for our child's medical insurance. My ex never followed the court orders of exchanging financial information every 2 years. She has now since learned that I have an HSA with employer contributions. She refuses to pay her 40% of uncovered medical expenses for our child unless I pay 100% of the $3000 deductible first out of the HSA employer contributions. Furthermore, she has NEVER reimbursed me any of the 40% for uncovered medical bills since the 2006 divorce...even prior to the HSA .Question - 1) Does the ex have a valid claim to my HSA after our divorce and not paying her 40% portion until I pay the deductible 100%? 2) What if I had already used the $3000 for dental work for myself that is not counted as part of meeting the medical insurance deductible? Thank you very much for your assistance.

There are so many arguments that can be made, pro and con, to her position that you should cover the deductible because the employer pays that into the HSA. I can easily argue that if the deductible were already used up by you, that there would no longer be a deductible for the child, and therefore if there is still deductible to be paid, that you should pay it from the HSA.

Someone else could argue that the HSA is for you to use, at your descretion, and that as long as you are covering your 60% of out of pocket costs, that mom should bear the 40%.

I think that in the end, the judge is going to look at the specific facts of the situation, and that since your employer gives you the 3000.00 for the deductible, that its reasonably probable that a judge is going to rule that you have to cover whatever deductible is remaining, before the out of pocket amounts are calculated. After all, if you have previously used up the whole HSA, then the deductible would have already been covered, right?

 

[Chameleon420]

Thank you for your reply.

You asked - "After all, if you have previously used up the whole HSA, then the deductible would have already been covered, right?"

It depends how the $3000 spent was applied. If it were spent on dental work, then that does not apply to the medical insurance deductible of $3000. The dental plan is separate from the medical insurance plan. If the $3000 was spent on OOP medical expenses not covered by insurance, then yes, the deductible for medical insurance would be met.

Today, an attorney I consulted rendered this opinion:

"It was my understanding that the child, by being on the plan, is entitled to the use of the HSA, but that using the HSA is not required. The point of an HSA is to cover expenses you cannot, if I understand it correctly. So, in the event of something catastrophic, where you use the HSA to prevent too much out of pocket, the child could use it. However, if you are trying to build the HSA for such an event, it is my understanding you are not required to use the HSA. If you had obtained the HSA during the marriage, then she might be able to, because it would have been a community asset and she could have been awarded a portion of it, but the HSA is your sole and separate property, and as such you may use it for the child (because the child is entitled to the benefit of it if you choose to use it, as she is on your health plan), but the ex wife cannot force you to use it for the child if you're choosing to pay out of pocket because it is your sole and separate HSA, and your ex-wife has no entitlement to its use. The idea is, if she cannot afford 40% out of pocket, she has to go to a judge to modify that and show her circumstances have changed and that she is not willfully underemployed, but until then, she is obligated by a court order to pay her 40%. That is my understanding of the law, at least."

Your thoughts?

Thanks you!

 

[Zigner]

Thank you for your reply.

You asked - "After all, if you have previously used up the whole HSA, then the deductible would have already been covered, right?"

It depends how the $3000 spent was applied. If it were spent on dental work, then that does not apply to the medical insurance deductible of $3000. The dental plan is separate from the medical insurance plan. If the $3000 was spent on OOP medical expenses not covered by insurance, then yes, the deductible for medical insurance would be met.

Today, an attorney I consulted rendered this opinion:

"It was my understanding that the child, by being on the plan, is entitled to the use of the HSA, but that using the HSA is not required. The point of an HSA is to cover expenses you cannot, if I understand it correctly. So, in the event of something catastrophic, where you use the HSA to prevent too much out of pocket, the child could use it. However, if you are trying to build the HSA for such an event, it is my understanding you are not required to use the HSA. If you had obtained the HSA during the marriage, then she might be able to, because it would have been a community asset and she could have been awarded a portion of it, but the HSA is your sole and separate property, and as such you may use it for the child (because the child is entitled to the benefit of it if you choose to use it, as she is on your health plan), but the ex wife cannot force you to use it for the child if you're choosing to pay out of pocket because it is your sole and separate HSA, and your ex-wife has no entitlement to its use. The idea is, if she cannot afford 40% out of pocket, she has to go to a judge to modify that and show her circumstances have changed and that she is not willfully underemployed, but until then, she is obligated by a court order to pay her 40%. That is my understanding of the law, at least."

Your thoughts?

Thanks you!

What were the circumstances of your consultation? Wast it in person or online? Did the attorney render his/her opinion based on a review of all of the relevant documents, etc., or was it based only on your description of the matter?

 

[stealth2]

To answer the question as to whether the court CAN order the HSA be used to cover those expenses.... I'd bet the court *can*.

 

[bcr229]

Furthermore, she has NEVER reimbursed me any of the 40% for uncovered medical bills since the 2006 divorce...even prior to the HSA.

Have you ever taken your ex to court for contempt?

 

[LdiJ]

Thank you for your reply.

You asked - "After all, if you have previously used up the whole HSA, then the deductible would have already been covered, right?"

It depends how the $3000 spent was applied. If it were spent on dental work, then that does not apply to the medical insurance deductible of $3000. The dental plan is separate from the medical insurance plan. If the $3000 was spent on OOP medical expenses not covered by insurance, then yes, the deductible for medical insurance would be met.

Today, an attorney I consulted rendered this opinion:

"It was my understanding that the child, by being on the plan, is entitled to the use of the HSA, but that using the HSA is not required. The point of an HSA is to cover expenses you cannot, if I understand it correctly. So, in the event of something catastrophic, where you use the HSA to prevent too much out of pocket, the child could use it. However, if you are trying to build the HSA for such an event, it is my understanding you are not required to use the HSA. If you had obtained the HSA during the marriage, then she might be able to, because it would have been a community asset and she could have been awarded a portion of it, but the HSA is your sole and separate property, and as such you may use it for the child (because the child is entitled to the benefit of it if you choose to use it, as she is on your health plan), but the ex wife cannot force you to use it for the child if you're choosing to pay out of pocket because it is your sole and separate HSA, and your ex-wife has no entitlement to its use. The idea is, if she cannot afford 40% out of pocket, she has to go to a judge to modify that and show her circumstances have changed and that she is not willfully underemployed, but until then, she is obligated by a court order to pay her 40%. That is my understanding of the law, at least."

Your thoughts?

Thanks you!

That is certainly an argument that an attorney hired by you could argue to the court. However, an attorney for mom would certainly argue that since your employer provided that benefit, that you are obligated to use it on the child as well as yourself. I have no idea which argument would prevail with your particular judge.

 

[Chameleon420]

What were the circumstances of your consultation? Wast it in person or online? Did the attorney render his/her opinion based on a review of all of the relevant documents, etc., or was it based only on your description of the matter?

It was an in office consultation with a family law attorney. He did state he has not had a lot of experience with HSA. He also said there was not much he could find with Az law precedent. He rendered his opinion on a review of my court documents, receipts, and emails backing my situation.

 

[Chameleon420]

Have you ever taken your ex to court for contempt?

No, I have not. It's something I've contemplated for a long time. I try to resolve these things outside of court, but end up with lip service and broken promises. I'm also mindful that another court hearing/debate/fight tends to stress my daughter, along with the two other siblings that are adults now.
The ex and I signed an agreement a year ago, Jan 2019, to mitigate these constant problems of payment. However, she has since reneged. So now it appears there is no other option but court.

 

[Chameleon420]

That is certainly an argument that an attorney hired by you could argue to the court. However, an attorney for mom would certainly argue that since your employer provided that benefit, that you are obligated to use it on the child as well as yourself. I have no idea which argument would prevail with your particular judge.

Thank you, LdiJ. That's what I'm trying to determine...which way a judge might render a decision based on any AZ precedent. I cant find any. This case is a bit more complicated with other extenuating circumstances. The mother has found a new boyfriend and does not live at home with my daughter. She lives over 100 miles away and visits once a week for a day or two. The mother and daughter fight constantly. There is a live-in aunt that lives with the daughter in my ex's home. The daughter is not able to live with me because I live at a higher altitude and she has a congenital heart problem that is best served at the lower altitude she lives at now. I just have to find a way to navigate this matter for another 18 months or so until she graduates high school. Oh, and since the mother has met a new man she is willfully underemployed because she wants to spend all her time with him living on the lake. She only worked 6 months last year and she now wants to modify child support to show she makes way less than she is able. I'm expecting the court will attribute an appropriate income for her...as they did in 2009 when she failed to provide any financial information. It goes on and on, but my main concern is her trying to force me to use the HSA to benefit her side of things in not paying her 40%.

 

[LdiJ]

Thank you, LdiJ. That's what I'm trying to determine...which way a judge might render a decision based on any AZ precedent. I cant find any. This case is a bit more complicated with other extenuating circumstances. The mother has found a new boyfriend and does not live at home with my daughter. She lives over 100 miles away and visits once a week for a day or two. The mother and daughter fight constantly. There is a live-in aunt that lives with the daughter in my ex's home. The daughter is not able to live with me because I live at a higher altitude and she has a congenital heart problem that is best served at the lower altitude she lives at now. I just have to find a way to navigate this matter for another 18 months or so until she graduates high school. Oh, and since the mother has met a new man she is willfully underemployed because she wants to spend all her time with him living on the lake. She only worked 6 months last year and she now wants to modify child support to show she makes way less than she is able. I'm expecting the court will attribute an appropriate income for her...as they did in 2009 when she failed to provide any financial information. It goes on and on, but my main concern is her trying to force me to use the HSA to benefit her side of things in not paying her 40%.

You are likely to be successful in getting an income imputed to her. However, its going to be 50/50 as far as the HSA is concerned. You can however, get her held in contempt for not paying her share in the past. She will likely argue that she didn't pay her share because you weren't using the HSA and therefore her share was inflated, but she will still get dinged for not paying at all.

Once again, if this was an HSA that you solely contributed to, then you would definitely have the right to choose to use it or not. However, its an HOA that your employer contributed $3000.00 to and the purpose of that was to specifically cover the deductible. Therefore I cannot predict whether it will or won't go your way in court.

 

[stealth2]

I'm also mindful that another court hearing/debate/fight tends to stress my daughter, along with the two other siblings that are adults now.

Who's bringing them into it?