Maintaining Health Insurance Through Divorce


Divorce is hard enough on a couple, but having to think about mundane yet crucial logistics like your health insurance options just adds to the stress of the situation. Divorce is hard enough on a couple, but having to think about mundane yet crucial logistics like your health insurance options just adds to the stress of the situation. Here are some basic facts about maintaining your health insurance through divorce.

Your Ex Cannot Stay on the Policyholder’s Plan

This is one of the most common questions received by Certified Divorce Financial Analyst Jeff Landers. The laws are very straightforward on this matter, so once you are divorced, you cannot stay on the same health insurance policy; however, your children can.

Obtaining Temporary Coverage

After a divorce is finalized, the non-employee spouse can apply for coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA) health benefit provision.

This amendment provides a continuation of up to 36 months of coverage when group health coverage is terminated due to certain specific events, such as divorce.

“If you’re divorcing, my advice would be to get your own health insurance as soon as possible, because if you develop a condition while on COBRA, a new insurance plan may look at that as a pre-existing condition and either not insure you or only do so with much higher premiums,” says Landers in Forbes.

Getting Your Own Policy

Another reason you will want to get your own policy as soon as possible is that COBRA continuation coverage is typically more expensive than is most group health coverage, due to the fact that when group health coverage is offered through work, the employer usually pays part of the cost of the employee’s coverage; with COBRA, the insured is responsible for the whole premium.

There are other options as well, including “mini-COBRAs” that apply to health insurers of employers with fewer than 20 employees, as well as more affordable or more generous coverage options offered through the Health Insurance Marketplace or Medicaid, if you qualify. Furthermore, states with mandated health coverage may offer their own options, such as MassHealth in Massachusetts.

Legal Separation vs. Divorce

Although maintaining health insurance coverage is such a concern for divorcing couples that they sometimes opt for a legal separation instead, Landers warns against it.

“Some health insurance companies view a legal separation as essentially the equivalent of divorce, and so they will not continue coverage for a separated spouse,” he notes.

In any case, always check with your health plan provider regarding restrictions on its policies, and consult with an attorney to help you comprehend divorce and insurance laws as they apply to your specific circumstances.

 

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