Life Insurance: Spouse Benefits When An Employee Dies

When an employee dies, their spouse and dependent children are left vulnerable, especially if the deceased was the primary breadwinner. In such cases, spouse life insurance can provide financial stability and protect the family from hardship. The death of an employee is considered a qualifying life event, allowing the surviving spouse to change their existing insurance policy or enroll in a new one. This includes employer-sponsored health insurance, private insurance, and insurance through the Affordable Care Act (ACA) Marketplace. Additionally, the surviving spouse may be eligible to continue the existing health coverage for up to 36 months through COBRA, a federal program that allows them to maintain the same insurance benefits. It is important to act quickly, as the window for making these changes is often limited to 60 days after the death of a loved one.

The spouse may be eligible to continue their existing health coverage for up to 36 months

When an employee dies, their spouse and dependent children need to consider their options for health coverage. If the deceased was the primary breadwinner, the surviving spouse may need to take on this role, and their income may be affected as a result. This can have a significant impact on the family's financial situation, particularly if there are children involved. It is therefore important to understand the options available to ensure the family's needs are met.

The spouse of the deceased employee may be eligible to continue their existing health coverage for up to 36 months. This is known as COBRA insurance coverage, which allows the spouse and any dependents to maintain their current insurance benefits. COBRA is named after the Consolidated Omnibus Budget Reconciliation Act, which entitles individuals in this situation to keep their insurance.

To take advantage of COBRA, the spouse must notify the employee's former company and HR department. The company is required to offer COBRA if it has more than 20 employees. The spouse must then make their COBRA election within 60 days of receiving notification of their right to purchase extended health care coverage. This can be a costly option, as the deceased employee's contribution will cease, and the spouse will be responsible for 100% of the premium. However, it may be a good short-term solution if the spouse is close to reaching the plan's annual deductible or out-of-pocket maximum.

It is important to note that COBRA is not the only option available to the surviving spouse. They may also be able to enrol in their own employer health plan (if available) or a private insurance plan. Additionally, they could consider an Affordable Care Act (ACA) Marketplace plan or enrol in Medicaid or Medicare, depending on their age and income level.

The spouse can purchase spouse life insurance through their workplace

The death of a spouse is a qualifying life event, which means the surviving spouse can change their existing insurance policy or enroll in a new one. If the deceased spouse had an employer-sponsored health plan, the surviving spouse may be eligible to special enroll in that plan. They may also be able to special enroll in health coverage through the Marketplace.

The surviving spouse may also be eligible to continue their existing health coverage for up to 36 months. The plan should notify them of their right to purchase extended health care coverage under COBRA. However, COBRA plans can be expensive since the employer will most likely stop contributing toward the premium.

If the surviving spouse is employed and their company offers employer-sponsored health insurance, this will likely be their most affordable option. They should check with their company as soon as possible to see if this is a possibility.

Another option is to purchase spouse life insurance through their workplace. If their employee benefits include life insurance, they may be able to purchase spouse life insurance directly through their workplace. Employer-sponsored group plans are often less costly than privately purchased individual plans, although they may provide less flexibility when it comes to coverage options.

Spouse life insurance is life insurance coverage purchased for a spouse or domestic partner. It differs from traditional life insurance plans in that it is purchased by the partner or spouse, who is usually the primary beneficiary. Spouse life insurance may fall into the category of dependent life insurance, which typically provides substantially lower coverage than standard individual policies.

The spouse can purchase a private insurance plan

When an employee dies, their spouse is no longer covered by their employer-sponsored health plan and must consider alternative health insurance options. One option is for the surviving spouse to purchase a private insurance plan.

Private insurance plans can be purchased directly through a life insurance company, often with the option to buy policies online or over the phone. This option may be ideal for those who already have multiple insurance policies with a single provider, as bundling several policies may result in lower premiums.

Another option is to purchase a private plan through an insurance broker or agent. These professionals can compare carriers and plans to find a policy that suits the spouse's unique needs and budget. This option may be beneficial for those who want help shopping around and ensuring they get the best deal.

It is important to note that private insurance plans may be more expensive than employer-sponsored plans, and they may not always cover all the necessary benefits. Spouses should carefully consider their financial situation and the level of coverage they require before purchasing a private insurance plan.

In addition to purchasing a private insurance plan, the surviving spouse may also be able to special enroll in health coverage through the Marketplace or continue their existing health coverage under COBRA for up to 36 months.

The spouse can enrol in health coverage through the Marketplace

When an employee dies, their spouse and dependent children need to consider their options for health coverage. If the deceased was the employee, their spouse can enrol in health coverage through the Marketplace. This is because the death of a loved one is considered a qualifying life event, allowing the spouse to change their existing insurance policy or enrol in a new one.

The spouse has 60 days to organise alternative health insurance options to ensure they remain covered. They can choose to look for another private insurance plan, COBRA, or an Affordable Care Act (ACA) Marketplace plan during this period.

ACA plans are typically less expensive than COBRA insurance because of the subsidies (tax credits based on income level). There is also a cap of 8% of the spouse's income going towards premiums. The cost of the monthly premium will depend on factors such as the spouse's age, projected household taxable income, and location. Generally, the older the spouse is, or the higher their household income, the higher the premium.

The spouse can also seek help from experts to navigate their options. This could include an HR representative at the company, the state's Department of Human Services, a health benefits broker, or a local nonprofit that helps people with insurance issues.

The spouse can enrol in COBRA insurance coverage

When an employee dies, their spouse and dependent children will need to consider their options for health coverage. If the employee's spouse is enrolled in their own employer health plan, they may be eligible to special enrol their partner and any dependents in that plan. Alternatively, they may be able to enrol in health coverage through the Marketplace.

The spouse and any dependent children may also be eligible to continue their existing health coverage for up to 36 months. The plan should notify them of their right to purchase extended health care coverage under COBRA. Most plans require eligible individuals to make their COBRA election within 60 days of the plan's notice.

COBRA, or the Consolidated Omnibus Budget Reconciliation Act, allows the spouse and any dependents to keep the same insurance benefits for up to 36 months. This can be a costly option, as the employer will likely stop contributing towards the premium, meaning the spouse will be responsible for 100% of the cost. In 2021, the average yearly cost of employer-sponsored health insurance was $7,739, which equates to roughly $645 per month for an individual, according to the Kaiser Family Foundation. For a family, the estimated monthly cost would be $1,852. These estimates do not include the 2% monthly administrative fee.

A COBRA plan may be a good short-term option if the spouse is close to, or has already reached, the plan's annual deductible or out-of-pocket maximum.

Frequently asked questions