Paul Sanchez
Divorce is a difficult transition, and it's important to plan ahead to make this life-changing event smoother. One of the most critical things to consider during a divorce is health insurance. When a married couple decides to divorce, they both remain insured on the existing plan during the divorce process. However, once the divorce is finalised, the non-policyholder spouse is no longer considered a family member and loses coverage. This means they will have to find new insurance and pay their own premium. Luckily, there are several options for continuing to have health insurance after a divorce.
| Characteristics | Values |
|---|---|
| Continuation of coverage under spouse's plan | In most cases, once the divorce is final, the non-policyholder spouse is no longer considered a family member and isn't covered under the plan. |
| Temporary continuation of coverage | The spouse and dependent children may be eligible to continue their existing health coverage for up to 36 months under COBRA. |
| 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. |
| Children's Health Insurance Program (CHIP) | Provides insurance for children only. |
| Self and Family enrollment | If the divorced spouse was covered under Self and Family enrollment, they can change to Self Only enrollment within 60 days of the divorce. |
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What You'll Learn
Spouse's eligibility for health insurance after divorce
Divorce is a major life change that can impact your health insurance coverage. Here are some key things to know about spouses' eligibility for health insurance after divorce:
During Separation and Divorce Proceedings
While you are legally separated or in the process of getting a divorce, your spouse is typically still eligible for coverage under your health insurance plan. This is true for both Self and Family enrollment and Self Plus One enrollment. However, once the divorce is finalized, your spouse is no longer considered a family member and will lose coverage. Therefore, it is essential to plan ahead and consider your options for health insurance after the divorce.
Notifying Your Insurance Provider
If you are the policyholder, it is important to notify your insurance plan about your divorce. Most plans require you to submit a copy of your divorce decree within 60 days. Failing to do so may result in overpayment of medical expenses or even cancellation of your policy.
COBRA Coverage
If you were covered under your spouse's employer-sponsored health plan, you may be eligible for temporary continuation of coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows you to continue your existing health coverage for up to 36 months after your divorce. However, you will be charged for this coverage, and finding insurance after the temporary coverage period ends may be challenging if you have developed a pre-existing condition.
Spouse Equity, Temporary Continuation, and Individual Policies
In some cases, your ex-spouse may be eligible for enrollment under Spouse Equity or Temporary Continuation of Coverage (TCC). They may also be able to convert to an individual policy with your current carrier. These options vary depending on the carrier and state laws, so it is essential to review your specific plan's provisions.
Medicaid and CHIP
If your financial situation has changed due to the divorce, you may qualify for Medicaid or the Children's Health Insurance Program (CHIP). Medicaid provides free or low-cost health insurance to low-income individuals, families, and children. CHIP is an option if your income is too high for Medicaid but too low to afford private coverage.
Employer-Sponsored Plans
If you are employed, enrolling in your employer's health plan may be a practical and affordable option. The Affordable Care Act (ACA) makes health insurance available to individuals and families through the government's Health Insurance Marketplace. Most employer-sponsored plans allow you to enroll within 30 days of your divorce being finalized.
Consulting Professionals
Navigating health insurance after a divorce can be complex. Consider consulting a licensed insurance agent or a divorce lawyer to explore your options and understand your rights. They can help you find a plan that fits your budget and meets your specific needs.
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Temporary continuation of coverage
Divorce is a Qualifying Life Event (QLE) that allows you to change your health insurance coverage. If you have a Self and Family enrollment, your spouse is eligible for coverage under your insurance while you are legally separated or in the process of getting a divorce or an annulment. Once the divorce or annulment is final, your ex-spouse loses coverage, but they may be eligible for a 31-day extension.
TCC coverage ends when the 36-month period expires or the enrollee cancels the enrollment. If the enrollee cancels their TCC coverage by not paying their premiums, it is considered a voluntary cancellation. When the enrollee cancels their TCC coverage, their family members' coverage also terminates.
It is important to note that TCC is not available in all health insurance programs. For example, the FEDVIP Program does not offer TCC, Spouse Equity, or the right to convert to an individual policy.
Another option for divorced individuals seeking health insurance coverage is to enroll in their ex-spouse's employer-sponsored coverage through COBRA (Consolidated Omnibus Budget Reconciliation Act). COBRA is a law that requires group health plans to offer temporary continuation of coverage that would otherwise be lost due to specific life events, such as divorce. COBRA typically allows for up to 36 months of continued coverage.
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Medicaid and other government programs
In the US, the enactment of Spousal Impoverishment Provisions by the federal government in 1988 allows community spouses to retain a higher level of income and assets than their applicant spouses. These provisions apply to a married couple (including same-sex couples) where only one spouse is seeking long-term care Medicaid.
The spousal impoverishment rules aim to prevent the rapid depletion of a couple's lifetime savings due to the high expense of nursing home care, which can cost $5,000 to $8,000 a month or more. Under these rules, a certain amount of the couple's combined resources is protected for the community spouse, i.e., the spouse living in the community. The community spouse's monthly income allowance is at least $2,002.50 but should not exceed $2,980 for 2016, as long as the income is made available to them.
Medicaid Divorce, a term used for the dissolution of a marriage where one spouse requires long-term care Medicaid, is no longer relevant for most couples. This is because, in a marriage, the income of the non-applicant spouse is disregarded, and the assets of the couple are considered jointly owned. However, the non-applicant spouse of a Nursing Home Medicaid or Medicaid Waiver applicant can retain a higher amount of assets.
If you need new coverage following a divorce, you can explore government programs like Medicaid and the Children's Health Insurance Program (CHIP). Medicaid provides free or low-cost health insurance to low-income families, while CHIP provides insurance for children. You can also consider enrolling in health coverage through the Marketplace or your spouse's employer-sponsored coverage through COBRA, which allows you to continue your existing health coverage for up to 36 months.
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Employer-sponsored health plans
If you have been covered by your spouse's employer-sponsored health plan, you will almost certainly need to find new health insurance after your divorce. Divorce is a life-changing event that qualifies you to enrol in or change your health plan outside the usual annual enrolment period. Here are some options for you if you are in this situation:
If you are working, an employer-sponsored health plan might be the most convenient and affordable option for you. Most employer-sponsored plans allow you 30 days from the date your divorce is finalised to enrol. You can speak to the plan administrator for more details.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
You might be eligible to keep your existing health coverage for up to 36 months after your divorce under the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA is a federal programme that requires employers with 20 or more employees to allow workers and their families to maintain health coverage after divorce and other qualifying events. You have 60 days to enrol in COBRA, starting from the date of your divorce or the date you receive a COBRA election notice, whichever is later. However, COBRA can be expensive as you have to pay the entire monthly premium of the employer's plan plus a 2% administrative fee.
Mini-COBRA
If your spouse works for a smaller employer, you may still be able to extend your existing coverage after divorce under a "mini-COBRA" law. Many states have these laws, which apply to employers with 19 or fewer employees.
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Impact of divorce on existing health insurance coverage
Divorce can significantly impact a person's existing health insurance coverage. When a couple is married, they are often covered under a single plan, typically provided through one spouse's employer. The non-employee spouse is considered a family member or dependent under this plan. However, once the divorce is finalised, the non-policyholder spouse is no longer recognised as a family member and loses coverage under the existing plan.
If you have your own health insurance plan and are the policyholder, you will not lose coverage due to divorce. However, it is essential to notify your insurance provider about the change in marital status within 60 days and submit a copy of the divorce decree to avoid any complications or overpayment issues.
For those covered under their spouse's plan, divorce often means losing health insurance. In this case, it is crucial to explore alternative coverage options promptly. One option is to enrol in your employer's health plan if they offer one. Most employer-sponsored plans allow a 30-day window after the divorce to enrol. Another possibility is to continue existing health coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA) for up to 36 months. COBRA allows individuals to maintain their previous insurance, but they will be responsible for paying the premiums. It is worth noting that accepting COBRA coverage may impact future insurability due to pre-existing conditions.
If you have children, their health insurance coverage during and after the divorce process should be a priority. Children can usually remain covered under the insurance of either parent. Additionally, government programs like Medicaid and the Children's Health Insurance Program (CHIP) offer free or low-cost health insurance for children from low-income families.
To summarise, divorce can disrupt existing health insurance arrangements, particularly for spouses who were covered under their partner's plan. It is crucial to proactively explore alternative coverage options, such as employer-sponsored plans or COBRA, to ensure continuous access to healthcare services.
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Frequently asked questions
It depends on the insurance provider and the type of plan. In most cases, a divorced spouse will not be considered a family member and therefore will not be covered by their ex-spouse's insurance plan.
If you were covered under your spouse's insurance plan, you will likely need to find new insurance coverage and pay your own premium.
Yes, there are a few options to remain on your ex-spouse's insurance plan temporarily. You may be eligible for continuation coverage under COBRA (Consolidated Omnibus Budget Reconciliation Act) for up to 36 months after your divorce. Alternatively, your state may issue temporary orders or restraining orders that maintain the financial status quo, including health insurance coverage, during the divorce process.
You may be eligible for other health insurance options, such as enrolling in your employer's health plan or purchasing insurance through the Health Insurance Marketplace. If your financial situation has changed due to the divorce, you may qualify for Medicaid or the Children's Health Insurance Program (CHIP).
Divorce is considered a Qualifying Life Event (QLE) that allows you to change your insurance plan or options. You typically have 30 to 60 days from the date of your divorce to enrol in a new insurance plan or change your existing plan. It is recommended to consult with a licensed insurance agent or a divorce lawyer to explore your options and understand your rights.
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