Jane Dotson
Divorce brings about a lot of changes, and one of the most important things to stay on top of is health insurance coverage. If you were covered under your spouse's insurance, you will almost certainly need to find new health insurance. If you are the policyholder, you won't lose coverage, but you will need to notify your insurance plan about your divorce. Your ex-spouse may be able to continue coverage under specific conditions, such as through COBRA, Spouse Equity, or Temporary Continuation of Coverage (TCC). It's essential to understand your options and negotiate health insurance as part of your divorce settlement to ensure you and your children remain covered.
| Characteristics | Values |
|---|---|
| Can you carry an ex-spouse on your medical insurance? | No, once the divorce is final, the non-policyholder is no longer considered a family member and isn't covered on the plan. |
| What happens if you're the insurance policyholder? | You won't lose coverage when you get a divorce, but you'll need to notify your insurance plan about your divorce. |
| How long can you stay on your ex-spouse's health insurance? | You can stay on your ex-spouse's health insurance during the divorce process, but once the divorce is finalized, you will need to find new insurance coverage. |
| What are some options for health insurance after a divorce? | You can shop for an ACA plan on the "Marketplace", apply for Medicaid if you have a low income, or enroll in a plan offered by your employer. |
| What is COBRA? | COBRA is a program that allows you to continue your existing health coverage for up to 36 months after a divorce. |
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What You'll Learn
Coverage options during divorce proceedings
If you are the insurance policyholder, you won't lose your health insurance coverage when you get a divorce. However, you must notify your insurance plan about your divorce, typically within 60 days of submitting a copy of your divorce decree. Failure to do so may result in you and your ex-spouse being held responsible for any overpayment of medical expenses or even policy cancellation.
During divorce proceedings, the non-policyholder spouse remains insured under the existing plan. Once the divorce is finalised, the non-policyholder is no longer considered a family member and must find new insurance coverage. This is true even if a court order requires the non-policyholder to remain on the policy.
If you are the non-policyholder, you may be eligible to enrol under Spouse Equity or Temporary Continuation of Coverage (TCC) or convert to an individual policy with your current carrier. You may also be eligible for benefits under the Consolidated Omnibus Budget Reconciliation Act (COBRA) if your spouse works for a company with 20 or more employees. COBRA allows you to get continuation coverage for up to 36 months (three years) following your divorce. However, this option may make it difficult to find good health insurance after the coverage expires if you develop a serious illness or injury during that period.
Another option is to purchase a plan from a private insurance company if your employer doesn't offer insurance, you don't qualify for a subsidy, or other options are unavailable. However, be cautious as many of these plans have coverage limitations, such as pre-existing conditions or wellness services that may not be covered.
If your financial situation has changed due to your divorce, you may qualify for Medicaid, a government insurance program that provides free or low-cost health care coverage to low-income individuals, families, children, older people, pregnant people, and people with disabilities. The eligibility criteria and benefits vary between states.
The Affordable Care Act (ACA) also makes health insurance available to individuals or families through the government's Health Insurance Marketplace. The Marketplace offers four categories of health insurance—Bronze, Silver, Gold, and Platinum—with varying degrees of coverage, deductible amounts, and premiums. You may qualify for tax credits or extra savings depending on your expected annual income.
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Coverage options after divorce
Divorce is a life-changing event that necessitates adjustments to your health insurance coverage. Here are some coverage options to consider during and after your divorce:
Temporary Orders:
In many states, courts automatically issue temporary orders, also known as "temporary restraining orders" or "temporary injunctions," when someone files for divorce. These orders maintain the financial status quo, preventing spouses from changing or cancelling health insurance policies during the divorce process. If your state doesn't automatically issue such orders, you may need to request a judge to issue one that addresses health insurance and other relevant issues.
Employer-Sponsored Health Plans:
If you're employed, consider enrolling in an employer-sponsored health plan. Most employer-sponsored plans allow you to enrol within 30 days of your divorce being finalised. This is often a more affordable and comprehensive option than individual plans, as employers are usually required to contribute towards the premium.
Consolidated Omnibus Budget Reconciliation Act (COBRA):
Under COBRA, a federal program, you may be eligible to maintain your existing health coverage for up to 36 months after your divorce. COBRA applies to employers with 20 or more employees and gives workers and their families the right to continue their group health plan after qualifying life events, such as divorce. However, COBRA can be expensive, as you'll need to pay the full monthly premium plus a 2% administrative fee.
Affordable Care Act (ACA) Marketplace:
You may be able to purchase health insurance through the ACA Marketplace. The ACA offers a special 60-day enrolment period if you lose health insurance coverage due to divorce. The Marketplace provides four categories of health insurance plans (Bronze, Silver, Gold, and Platinum) with varying levels of coverage, deductible amounts, and premiums.
Medicaid:
If your financial situation has changed due to divorce and you meet income requirements, consider applying for Medicaid. It's a government insurance program that provides free or low-cost health care coverage to low-income individuals, families, children, older people, pregnant people, and people with disabilities.
Private Insurance:
If none of the above options are feasible, you may consider purchasing a plan from a private insurance company. However, be cautious of coverage limitations and ensure you understand the risks and exclusions of any private plan you consider.
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Notifying your insurance plan about your divorce
Divorce is a difficult process, and it's easy for health insurance to get lost in the shuffle. However, it is crucial to stay on top of your health insurance coverage during this time to ensure that you and your children do not end up without insurance. If you're the insurance policyholder, you won't lose coverage after a divorce, but you must notify your insurance plan about the change in your marital status.
Typically, you will have 60 days to submit a copy of your divorce decree to your insurance provider. However, it is recommended to contact the plan administrator to understand their specific requirements. Failure to notify your insurance company about the divorce may result in you and your ex-spouse being held responsible for any overpayment of medical expenses, or even policy cancellation.
If you were covered under your spouse's employer-sponsored health insurance, you will likely need to find new health insurance. In some cases, you may be able to continue this coverage for a temporary period through COBRA (Consolidated Omnibus Budget Reconciliation Act). COBRA allows you to maintain the same doctors and provides continuation coverage for up to 36 months after your divorce. However, it can be expensive, as you will need to pay the full cost of the premium plus a possible administrative fee.
To avoid a lapse in coverage, it is advisable to enrol in COBRA as soon as possible after your divorce is finalised. You may also want to explore other options, such as enrolling in your own employer-sponsored coverage if you have or are getting a new job. This option often offers lower premiums and tax benefits. Additionally, if your financial situation has changed due to the divorce, you may qualify for Medicaid or the Children's Health Insurance Program (CHIP), which provide free or low-cost health insurance for low-income individuals and families.
Remember, it is essential to negotiate health insurance as part of your divorce settlement. This includes deciding who stays on what plan and who pays for the coverage. If you have children, their medical support should also be included in any child support agreements.
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Qualifying for Medicaid after divorce
A "Medicaid divorce" is a term used to describe the process of legally ending a marriage to create Medicaid eligibility for a spouse who requires expensive long-term care. This strategy is intended to protect the assets of the healthy spouse by separating the couple's income and assets, allowing the sick spouse to qualify for Medicaid without depleting their shared assets. However, it's important to note that a Medicaid divorce entails an actual and legal divorce, and there are risks to consider.
Medicaid is a government program that provides health coverage to adults with limited income and resources, children, elderly adults, and people with special needs. To qualify for Medicaid assistance, individuals must demonstrate significant financial need, and eligibility criteria vary from state to state. Before considering a Medicaid divorce, it is recommended to seek legal advice as there may be other planning strategies that don't require divorce.
If you were previously covered by your spouse's employer-sponsored health insurance, you may be able to continue this coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA) for up to 36 months after your divorce. COBRA allows individuals to maintain their existing health insurance coverage and providers, but it can be expensive as the full cost must typically be paid by the individual, plus a possible administrative fee. It's important to note that COBRA coverage is not always the best option, especially if you have a pre-existing condition, as finding new insurance after COBRA coverage ends may be challenging.
Alternatively, you may want to explore other insurance options, such as enrolling in your own employer-sponsored coverage if you have or are getting a new job. This option often provides the easiest path to obtaining coverage, offers the lowest premiums, and provides tax benefits through payroll deductions. It is crucial to prioritize negotiating health insurance as part of your divorce settlement to ensure that you and your children have access to the necessary coverage.
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Negotiating health insurance as part of your divorce settlement
Divorce is a challenging transition that involves sorting out many issues, from dividing assets to deciding on living situations. Although it may not be at the top of your list, health insurance is also one of the essential things that needs to be discussed because it can significantly impact your life after divorce. Here are some things to consider when negotiating health insurance as part of your divorce settlement:
Understanding Your Current Coverage:
Before negotiating health insurance, it's crucial to understand your current coverage. Are you and your spouse both covered under one plan, typically provided through your spouse's employer? Knowing the specifics of your current plan will help you make informed decisions about future coverage.
Exploring Options for Continued Coverage:
If you've been covered under your spouse's plan, you may be able to continue that coverage temporarily through the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows you to maintain your current insurance, but you will likely have to pay the full premium yourself, which can be expensive. Alternatively, if you're facing financial challenges, you may qualify for Medicaid, a government program that provides free or low-cost health care to low-income individuals and families.
Negotiating Spousal Support:
If one spouse has been out of the workforce or is facing difficulties finding affordable coverage, the couple may agree that the policyholder spouse will continue to pay for the other spouse's coverage for a certain period. This arrangement can be negotiated as part of the divorce settlement, ensuring the dependent spouse has time to get back into the workforce or find suitable alternative coverage.
Considering Individual Plans:
Both spouses should explore their options for individual health insurance plans, either through their employers or on their own. Speaking with a licensed insurance agent can help you understand the costs, coverage, and benefits of different plans available to you. Additionally, if you have children, ensuring their continued coverage is essential, and they can usually remain on the existing plan as dependents.
Seeking Professional Help:
Navigating health insurance during a divorce can be complex, and it's easy to overlook important details. Consider consulting a divorce lawyer or a family law attorney who can guide you through the process and ensure your rights and interests are protected. They can also help you explore other options, such as negotiating for a lump sum payment or special enrollment periods that may be available to you.
Remember, health insurance is a necessary and significant expense, and negotiating it as part of your divorce settlement can provide financial stability and peace of mind as you transition to the next chapter of your life.
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Frequently asked questions
No, you cannot remain on your ex-spouse's health insurance plan as a family member after your divorce. You will need to find new insurance coverage and pay your own premium.
Yes, you may be able to continue your ex-spouse's employer-sponsored coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA) for up to 36 months. However, you will have to pay the full cost, plus a possible administrative fee.
If you are employed, you can get insurance through your employer, which often has lower premiums and is deducted from your payroll. You can also look into the Affordable Care Act (ACA), which offers health insurance through the government's Health Insurance Marketplace.
Yes, you can remain on your spouse's insurance plan during a legal separation. However, you will need to notify your insurance plan about your divorce, typically within 60 days of submitting a copy of your divorce decree.
Children can remain on the existing insurance plan as dependents without any disruption. They can also switch to the other parent's insurance or be on both plans, which is helpful if the primary health care insurance doesn't fully cover the child's medical care.
