Opinion ID: 852210
Heading Depth: 2
Heading Rank: 2

Heading: What Are These Benefits Worth?

Text: Because the trial court held that Charles's premiums did not constitute an asset, it understandably did not reach the question of valuation. Valuation is the more difficult aspect of this case. We have not previously addressed the possible methods of valuing health insurance benefits in a marriage dissolution. We begin by noting that a trial court has broad discretion to value an asset based on the evidence. Quillen, 671 N.E.2d at 102 (citing Cleary, 582 N.E.2d at 852). Appellate courts review such valuations for an abuse of discretion. Id. So long as sufficient evidence and reasonable inferences support the valuation, the trial court has not abused its discretion. Id. (citing Porter, 526 N.E.2d at 222). The method a trial court uses to value health insurance benefits may vary case by case and may depend on the type of evidence the parties introduce. Three possible methods of valuing health insurance benefits seem plausible, though still other methods may be more appropriate in certain circumstances. [3] For example, a trial court might value health insurance benefits by considering the cost of obtaining comparable alternative benefits. Presumably, this would involve discounting to present value the premiums a person would have to pay to obtain individual health insurance if he did not have the benefit of employer-provided health insurance. This method may be more likely to overstate the value of health insurance because of adverse selection and the tax-disfavored status of the individual health insurance market. It might also entail a higher cost in terms of expert witnesses. [4] Second, a court might value health insurance benefits by considering the premium subsidy from the employer. [5] Presumably, this would involve discounting to present value all the premiums an employer had agreed to pay on behalf of a party while also taking into account the party's remaining life expectancy and the probability of the policy lapsing before the termination date. Anne effectively urged the trial court to adopt this discounted premium subsidy method when she submitted her Motion to Supplement the Record with her contentions of the asset's value. (App. at 39.) Third, a trial court might value health insurance benefits by considering the cost of providing medical services covered by health insurance. [6] We anticipate that this would involve discounting to present value the expected costs of the medical services a health insurance plan would cover while also taking into account the party's remaining life expectancy and the probability of the policy lapsing before the termination date. Although this method may be necessary in certain circumstances, it also appears to be the most difficult to apply. Regardless of how a trial court chooses to value health insurance benefits, the next question will always be how to divide the assets between the parties. There is a rebuttable presumption that an equal division of the marital property is just and reasonable. Ind.Code § 31-15-7-5. A party may rebut that presumption by introducing evidence that relates to [t]he economic circumstances of each spouse at the time the disposition of the property is to become effective. Ind.Code § 31-15-7-5(3). If a party met this burden, then a trial court could deviate from an equal division to achieve a just and proper distribution. For instance, Charles has repeatedly argued that his health insurance benefits are illiquid and subject to risk. Although these factors cannot shield his health insurance benefits from their proper categorization as an asset, they may be sufficient grounds for the trial court to adjust the distribution of the marital property between the parties.