Insurance After Divorce: When To Change

Divorce is a challenging transition that requires many changes, from dividing assets to figuring out living situations. One of the most important things to consider is insurance. During the divorce process, both spouses stay insured on the existing plan. However, once the divorce is finalised, the non-policyholder spouse is no longer considered a family member and must find their own insurance coverage. This can be done through the other spouse's insurance with an additional premium, the federal Consolidated Omnibus Budget Reconciliation Act (COBRA), the current employer, the Health Insurance Marketplace (ACA plans), short-term insurance, private or off-exchange plans, or Medicaid. It is also essential to update life insurance, disability insurance, auto insurance, and homeowners' or renters' insurance policies.

Discuss health insurance during divorce negotiations

Divorce is a challenging transition, and there are a lot of things to sort out, from dividing assets to figuring out living situations. Although it may not be at the top of your list, health insurance is also one of the things that needs to be discussed because divorce can change coverage for you and your family.

Divorce is a qualifying life event that allows you to enrol in new coverage outside the usual timeframe. It is essential to discuss health insurance during divorce negotiations to ensure that both parties and any children involved have continued access to healthcare. Here are some key considerations:

• The non-policyholder spouse will need new coverage: Once the divorce is finalised, the non-policyholder spouse will no longer be considered a family member on the existing plan and will need to find new insurance coverage. This may be the first time in many years that they are paying for insurance themselves, so it is important to discuss this during negotiations to ensure they have the necessary financial support to secure adequate coverage.
• Children's insurance: If there are children involved, their health insurance coverage will generally not be affected by the divorce. They can usually remain on the existing insurance plan as dependents, but it is important to decide which parent's insurance they will be on and how the premiums will be paid. If needed, they can be switched to the other parent's insurance or even put on both plans if the primary health insurance doesn't fully cover their medical needs. Remember that children can stay on their parents' health insurance plan until they turn 26.
• Include children's insurance in child support: If child support is involved, federal law requires that medical support for the children is included. This can be in the form of private health insurance from an employer or the marketplace, public healthcare coverage such as Medicaid, or payment towards the children's healthcare costs.
• Spousal coverage: If one spouse has been a dependent on the other spouse's health insurance plan, this will need to be discussed during negotiations. The dependent spouse may want to negotiate that the other spouse continues to pay for their health insurance for a certain period until they can find a job that provides health insurance.
• Consider COBRA: The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows individuals who have lost health insurance due to a qualifying life event, such as divorce, to continue their existing coverage for a limited time. COBRA is typically expensive, as the individual must pay the full premium plus a 2% administration fee, but it can be a good option if you want to keep the same providers and benefits.
• Explore other options: In addition to COBRA, there are several other options for health insurance after a divorce, including employer-sponsored plans, private/individual health insurance, the Affordable Care Act (Obamacare), Medicare, Medicaid, and short-term health insurance. Compare the costs and benefits of these options to determine what is best for you and your family.

Decide whose plan the children will be on

When it comes to deciding whose insurance plan the children will be on after a divorce, there are several options to consider. Firstly, children can usually remain on the existing insurance plan as dependents, which is generally recommended as it ensures continuity of coverage and access to the same doctors. However, it is also possible to switch them to the other parent's insurance plan or even put them on both plans, especially if the primary insurance does not fully cover the children's medical needs.

It is important to note that federal law requires medical support to be included as part of child support. This can take the form of private health insurance from an employer or the marketplace, public health care coverage such as Medicaid, or direct payment towards the child's health care costs. In cases where parents cannot agree on whose insurance will cover their children, a court may determine who is responsible for providing health insurance coverage for the children.

• Involving the Children's Preferences: While there is no specific age, such as 12 or 14, when children can decide which parent they will live with, their views and preferences are important and will be considered by a judge when determining the best parenting arrangement. It is crucial to involve children in the decision-making process and understand their thoughts and feelings about the situation.
• Best Interests of the Child: When deciding on parenting arrangements, the primary focus should be on protecting and supporting the children's physical, emotional, and psychological safety, security, and well-being. This includes considering their need for stability, any special needs or medical requirements, their relationships with both parents and other important individuals in their lives, and their cultural, linguistic, religious, and spiritual upbringing.
• Decision-Making Responsibility: There are three main types of decision-making responsibility in parenting arrangements: joint decision-making, where both parents consult and make decisions together; sole decision-making, where one parent makes the decisions; and divided (parallel) decision-making, where each parent is responsible for specific areas, such as health and education.
• Co-parenting and Communication: A co-parenting relationship where both parents focus on the children's needs can make it easier to determine the best parenting arrangement. Effective communication and cooperation between parents are crucial, especially when making joint decisions or resolving future disagreements about parenting issues.
• Health Insurance Options: If one parent was previously listed as a dependent on the other parent's health insurance plan, they will need to make new arrangements after the divorce. Options include enrolling in the other parent's employer-sponsored coverage (COBRA), obtaining coverage through their own employer, purchasing insurance through the state or federal Health Insurance Marketplace, or applying for government programs like Medicaid or the Children's Health Insurance Program (CHIP).
• Emergency Medical Decisions: In the event of a true emergency, the focus should be on taking immediate action in the child's best interests, regardless of legal custody status. However, it is important to inform the other parent as soon as possible.
• Vaccinations and Medical Procedures: When parents share legal custody, disagreements about vaccinations or medical procedures can arise. In such cases, reviewing the custody order or agreement for specific mentions of vaccines or medical procedures is essential. If there is no clear guidance, mediation or a court decision may be necessary to determine the best course of action in the child's best interests.
• Legal and Financial Considerations: Understanding the legal requirements and financial implications of different insurance options is crucial. Consulting with a divorce lawyer and a licensed insurance agent can help navigate the complexities of health insurance coverage during and after divorce proceedings.

Remember, each family's situation is unique, and there is no one-size-fits-all approach to deciding whose insurance plan the children will be on after a divorce. The key priority is ensuring the children's well-being and making decisions that support their overall best interests.

Include children's insurance as part of child support

Divorce is a challenging transition that requires a lot of planning and negotiation. One of the most important things to consider during this time is health insurance coverage for yourself and your children. Here are some tips to ensure that your children's insurance is taken care of as part of child support:

Understand the Legal Requirements:

According to federal law, medical support for children must be included in child support. This means that as a parent, you have the responsibility to provide health insurance coverage for your children as part of the child support agreement.

Decide on the Type of Insurance:

You have several options for providing health insurance for your children. You can include them as dependents on your employer-sponsored health insurance plan, or you can explore other options such as the Children's Health Insurance Program (CHIP) or Medicaid. These programs provide health coverage for children from low-income families.

Calculate the Costs:

When determining child support payments, it's essential to consider the cost of health insurance premiums and any out-of-pocket medical expenses. You may need to adjust the child support amount to ensure that your children's medical needs are adequately covered.

Discuss with Your Co-Parent:

It's important to have open communication with your co-parent about health insurance coverage for your children. Try to come to an agreement on which type of insurance is best suited for your children's needs and how the costs will be shared between both parents.

Seek Legal Assistance:

If you and your co-parent cannot agree on health insurance coverage, you may need to involve a family law attorney or seek mediation. They can help you understand your rights and negotiate an agreement that is in the best interests of your children.

Be Prepared for Changes:

Remember that your children's health needs may change over time. Stay informed about any changes in their medical condition and be prepared to adjust the insurance coverage or child support agreement accordingly.

Keep Records:

It is important to maintain records of all insurance-related expenses, including premiums, co-pays, and any out-of-pocket costs. This documentation will be essential if there are ever any disputes or if you need to modify the child support agreement in the future.

Understand Your State's Guidelines:

Child support laws vary from state to state, so it's crucial to familiarize yourself with the guidelines in your specific state. This will help you understand your rights and responsibilities regarding health insurance coverage for your children.

Be prepared to lose your health insurance

Divorce is a challenging transition, and one of the many decisions you need to navigate is what to do about your health insurance. It's easy for health insurance to get lost in the shuffle during a divorce, but it's necessary to stay on top of it.

You Might Lose Your Health Insurance

If you were listed as a dependent on your former spouse's health insurance plan during your marriage, you will be dropped from the plan. Once the divorce is finalized, you won't be considered a family member anymore and won't be covered on the plan. That means you'll have to find new insurance coverage and pay your own premium.

What to Do if You Lose Your Health Insurance

Don't worry, you have options:

• COBRA coverage: The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) gives workers and their families the right to continue with their group health plan even if they lose their benefits due to qualifying life events such as divorce. COBRA coverage can be expensive, as you'll have to pay the full premium yourself, plus a 2% administration fee. You have 60 days to decide if you want to continue your coverage under COBRA, and you can stay on the plan for up to 3 years.
• Your current employer: If you have access to an employer health insurance plan, this could be a great option. In most states, your employer is required to pay for at least half of your premium. Talk to your employer about how to enroll in the company's plan.
• The Health Insurance Marketplace (ACA plans): The Affordable Care Act (ACA) makes health insurance available to individuals or families via the government's Health Insurance Marketplace. ACA plans cover 10 essential health benefits, including emergency services, mental health services, and laboratory services. You can shop for various plans on your state exchange, the federal marketplace, or in the private marketplace. Because divorce is considered a qualifying life event, you will have 60 days after your divorce to get coverage during a special enrollment period.
• Short-term health insurance: This is temporary coverage that can protect you against certain medical expenses until you can find another plan. It's inexpensive, and coverage may kick in the day after you apply. The downside is that it does not offer as many benefits, and you might not be able to stay on this plan for very long. Coverage typically lasts between 6 and 12 months, but it depends on what state you live in.
• Private or off-exchange plans: Purchasing a plan from a private insurance company may be an option if your employer doesn't offer insurance, you don't qualify for a subsidy, or none of the other options are available to you. Be careful with these plans, as they often have coverage limitations, such as pre-existing conditions or wellness services that aren't covered.

Understand your options if you lose your insurance

Losing your insurance after a divorce can be stressful, but there are several options to ensure you remain covered. Here are some steps you can take to understand your choices and secure a new plan:

Understand your options:

Firstly, it's important to know that you have choices, and there are several avenues to explore. You can:

• Sign up for health insurance through your employer if they offer this benefit.
• Purchase a health insurance policy from a private insurer or the government health insurance marketplace.
• Elect to continue coverage through your ex-partner's health plan under COBRA (Consolidated Omnibus Budget Reconciliation Act).
• Apply for Medicaid if you meet the income requirements.
• Look into short-term insurance plans.
• Consider private or off-exchange plans if you don't qualify for other options.

Weigh the pros and cons:

Each option has its advantages and disadvantages, so it's essential to consider your needs and budget. For example, COBRA allows you to keep your existing coverage for up to 36 months, but it can be expensive as you have to pay the full premium. Employer-provided insurance, on the other hand, is often partially subsidised, making it a more affordable choice.

Act promptly:

Remember that divorce is considered a qualifying life event, and you will have a Special Enrollment Period of 60 days after your divorce to shop for and enrol in a new health insurance plan. If you need new coverage, don't delay in reaching out to a licensed insurance agent to explore your options.

Include insurance in your divorce settlement:

If appropriate, you can include health insurance as part of your divorce settlement. For example, you could negotiate for your former spouse to continue providing coverage for you and your children for a specified period.

Understand the impact on other types of insurance:

Divorce can also affect other types of insurance, such as car, home, life, and disability insurance. You may need to separate your auto policies if your cars are kept at different residences. Homeowners insurance should reflect the change in ownership, and life insurance beneficiaries may need to be updated.

By understanding your options, acting promptly, and considering the impact on other insurance areas, you can effectively manage your insurance coverage during and after your divorce.

Frequently asked questions