Does Separation End Health and Insurance Benefits in Ontario?

If you are covered under your spouse's workplace plan, separating can raise a worry right away: will your prescriptions, dental work and glasses still be covered next month? The same question comes up for life insurance, where a policy may still name the person you are separating from.

There is no single rule that ends or keeps everything in place. Some benefits depend on a contract, some on Ontario statutes, and some on a court order or agreement. This article explains which is which and what to check first.

Your own health and dental coverage

Whether a separated or divorced spouse stays on a workplace group plan depends on the plan contract and the insurer, not on a general rule you can count on. Some plans define who counts as a spouse and when eligibility ends. Others set out what happens at separation or divorce.

Because of that, do not assume your coverage continues, and do not assume it stops. Read the plan booklet and ask the plan administrator or the insurer for the answer in writing.

• Ask whether a separated spouse is still eligible and, if so, for how long.
• Ask what event ends coverage: separation, divorce, or something else.
• Ask whether you can apply for your own coverage if you lose eligibility, and what the deadline is.
• Ask whether your own employer offers a plan you could join.

Coverage for your children

Children's coverage is treated differently from a spouse's. When a court makes a child support order and medical or dental coverage is available to either parent through an employer or otherwise at a reasonable rate, the court may order that the coverage be acquired or continued.

Health costs the insurance does not pay can also be shared as child support special expenses. These include health-related expenses that exceed insurance reimbursement by at least $100 a year, such as orthodontic treatment, counselling, physiotherapy, prescription drugs, hearing aids and glasses.

Life insurance and beneficiary designations

An insured person may name a beneficiary in the policy or by a declaration, and can generally change it. Ontario law does not automatically freeze or cancel an ex-spouse's beneficiary designation on separation. In practical terms, if nobody changes the form, the proceeds may still go to the person named.

There is an important limit. If a beneficiary has been designated irrevocably, the insured cannot change or revoke the designation without that beneficiary's consent while the beneficiary is living.

Life insurance can also be used to secure support. A court may order a spouse who has a life insurance policy to designate the other spouse or a child as the beneficiary irrevocably. A court may also require that support payments be secured by a charge on property or otherwise.

Changing a designation on your own while a court case or negotiation is under way can cause problems. Ask a lawyer before you change it.

Wills and what happens if someone dies

Wills are a separate issue from insurance. Since January 1, 2022, gifts to a spouse in a will, and the spouse's appointment as executor, are revoked if the spouses were separated at the testator's death.

Here, separated means living separate and apart because of marriage breakdown at death, plus one of the following: three years apart immediately before death, a valid separation agreement, a court order settling their affairs, or a family arbitration award.

If there is no will, a separated spouse, determined by the same tests, is not entitled to a share of the other spouse's estate where the separation event occurred on or after January 1, 2022. Because these tests depend on timing and paperwork, many people update their wills soon after separating rather than relying on them.

What to do next

• Get the plan booklet and ask the administrator in writing about your eligibility.
• List every life insurance policy, including those through work, and who is named on each.
• Check whether any designation is irrevocable.
• Review your will and your powers of attorney.
• Raise benefits in any separation agreement. It must be in writing, signed and witnessed to be enforceable.
• Disclose your own benefits and policies fully, because a court may set aside a separation agreement if a party failed to disclose significant assets, debts or other liabilities.

A lawyer can confirm how these rules fit your situation, and an insurance or benefits administrator can confirm what your own plan says.

Frequently asked questions