Paul Sanchez
Divorce is a challenging transition, and one of the many decisions you need to navigate is what to do about your health insurance. Once the divorce is finalized, your ex-spouse loses coverage, and you will no longer be considered a family member under their insurance plan. You will qualify for a Special Enrollment Period (SEP) which gives you 60 days to shop for and enroll in a new health insurance plan. There are several options to consider for health insurance when you get divorced, including enrolling in your spouse's employer-sponsored coverage through COBRA, purchasing an ACA plan, or applying for Medicaid if you cannot afford health care.
| Characteristics | Values |
|---|---|
| When does medical insurance end with a divorce? | Once the divorce or annulment is final, the ex-spouse loses coverage at midnight of the day the divorce or annulment is final, subject to a 31-day extension of coverage. |
| What are the options for health coverage after divorce? | COBRA, ACA, short-term health insurance, individual or family insurance, Medicaid, CHIP, and employer-sponsored health insurance. |
| What is COBRA? | The Consolidated Omnibus Budget Reconciliation Act 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 or job loss. |
| What is the downside of COBRA? | You are responsible for the entire healthcare premium, which will not include any amounts that an employer pays on behalf of an employee. In some instances, you are charged 102% of the cost of the group rate. |
| What is the benefit of COBRA? | You have 60 days to decide if you want to continue your coverage under COBRA. If you go this route, you can stay on the plan for up to 3 years. |
| What is ACA? | ACA plans cover 10 essential health benefits, including emergency services, mental health services, laboratory services, and more. Certain states may also offer dental and vision coverage. |
| What is CHIP? | CHIP provides insurance for children only. But it’s an option if your income is too high to qualify for Medicaid but too low to afford private coverage. |
| What is Medicaid? | A need-based federal program administered at the state level that provides health coverage for low-income families. |
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What You'll Learn
Understanding your options
Divorce is a challenging transition, and one of the many decisions you need to make is what to do about your health insurance. You are faced with several choices, but understanding your options is a great place to start. This includes short-term health insurance, individual insurance, and family insurance.
If your spouse had a health insurance plan that covered you, you will be dropped from the plan. If you have a Self Plus One enrollment and no other eligible family members, the divorce is a Qualifying Life Event (QLE). Within 60 days of the date of your divorce or annulment, you can change to a Self-Only enrollment. You can also change plans or options and switch your covered family member. If you have a Self and Family enrollment and there are no other eligible family members, the divorce is a QLE that allows you to decrease enrollment to Self-Only. If you only have one eligible family member remaining, you may decrease enrollment to Self Plus One.
If you need new coverage following a divorce, you can reach out to a licensed insurance agent to help you navigate your options and find the best plan for your needs. For example, they can help you find a plan that fits your budget and covers the doctors and medications you need. You can also purchase health insurance on your own by considering an ACA plan. ACA plans cover 10 essential health benefits, including emergency services, mental health services, and laboratory services. Certain states may also offer dental and vision coverage.
Another option is to see if you qualify for Medicaid or 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 only. If your income is too high to qualify for Medicaid but too low to afford private coverage, CHIP might be a good option.
If you got your insurance through your ex-spouse's employer, you may be able to continue it through COBRA for up to 36 months. COBRA, or the Consolidated Omnibus Budget Reconciliation Act, is a law that requires group health plans to offer temporary continuation of coverage that would otherwise be lost. While COBRA coverage is an option, it does come with a downside. You are responsible for the entire healthcare premium, which can make it more expensive than other options.
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COBRA coverage
Divorce is a qualifying event for COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act of 1985. This federal program allows divorced individuals to remain on their spouse's employer-sponsored health insurance for up to 36 months. To be eligible for COBRA, the employee's group health plan must meet specific guidelines, including having at least 20 employees.
If you are coming off your spouse's insurance due to divorce, you have 60 days to decide if you want to continue your coverage under COBRA. You will need to notify the human resources department of the company that provides the health insurance, and they will have 14 days to send you information about your rights under COBRA. Once you elect COBRA, you will be responsible for paying the premiums, which can be expensive as they may include the full cost of the policy plus a 2% administration fee.
It is important to note that COBRA does not apply to federal government or church plans. Additionally, if you remarry within the 36 months of COBRA coverage, you may keep it as long as you are not covered under your new spouse's health plan.
While COBRA can provide continued health insurance coverage after a divorce, it may not be the most affordable option. Other alternatives include enrolling in a private insurance plan, purchasing insurance through the Marketplace, or applying for Medicaid if you meet income eligibility requirements.
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Medicaid and CHIP
Divorce is a qualifying life event, and as such, you will have 60 days after your divorce to get coverage during a special enrollment period. This is a good option if you need temporary coverage before you figure out your long-term health insurance plan.
Medicaid is a need-based federal program administered at the state level that provides health coverage for low-income families. Each state runs its own Medicaid program, so income eligibility can vary. There are two ways to apply: directly through your state or through the federal marketplace. You can also talk to a licensed insurance agent about your options.
Medicaid Divorce is a planning tool that helps reduce the overall amount of assets a couple has in their name. It helps each spouse qualify for Medicaid without losing a substantial amount of their assets. However, Medicaid Divorce is no longer relevant for the majority of couples. It is intended for couples in which one spouse requires Nursing Home Medicaid (Institutional Medicaid) or Home and Community-Based Services (HCBS) via a Medicaid Waiver. By divorcing, the community spouse may be able to receive a greater portion of the couple's assets, while simultaneously lowering the countable assets of the applicant spouse.
The Children's Health Insurance Program (CHIP) is a joint federal and state-run program that provides insurance for children whose families' incomes are too high to qualify for Medicaid but too low to afford private coverage. Income eligibility levels vary from state to state and range from as low as 170% of the federal poverty level (FPL) up to 400% of the FPL.
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Special Enrollment Period
A divorce is a Qualifying Life Event (QLE) that allows you to make changes to your health insurance coverage. You may qualify for a Special Enrollment Period if you lose your health insurance due to a divorce. This period allows you to enroll in or change your Marketplace plan outside of the Open Enrollment period.
The Special Enrollment Period is a 60-day window after a qualifying life event, such as a divorce, during which you can make changes to your health insurance coverage. If you lose your health insurance due to divorce, you can use this period to pick a new plan by the last day of the month, and your new coverage can start the first day of the next month.
It's important to note that if you get divorced but don't lose your health coverage, you won't qualify for a Special Enrollment Period. Additionally, if you lose your coverage due to failure to provide required documents or failure to pay premiums, you won't be eligible for this period.
During the Special Enrollment Period, you have several options to consider for your health insurance:
- COBRA Continuation Coverage: The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) allows you to continue your group health plan even after a divorce. This option gives you 60 days to decide and lets you stay on the plan for up to 3 years. However, it may be expensive as you have to pay the full cost of the policy plus a 2% administration fee.
- Spouse's Employer Health Plan: If your spouse has an employer health plan, you and any dependent children may be eligible to special enroll in that plan.
- Marketplace Plans: You can special enroll in health coverage through the Marketplace. Some states and the District of Columbia have their own marketplace exchanges, while others use the federal marketplace. You can check which one applies to your state on healthcare.gov.
- Temporary Continuation of Coverage (TCC): Your ex-spouse may be eligible for this option, allowing them to continue their existing health coverage for up to 36 months.
- Individual Plans: You can purchase an individual plan from a private insurance company if you don't have access to an employer-sponsored plan or don't qualify for a subsidy. Be cautious, as these plans may have coverage limitations and may not cover pre-existing conditions.
- Medicaid: If you can't afford health care after a divorce, you may want to consider applying for Medicaid. Income eligibility levels vary from state to state, so be sure to check the requirements for your state.
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Private insurance plans
Divorce is a major life change that can significantly impact your health insurance coverage. If you were previously covered under your spouse's private insurance plan, you will need to explore new options to ensure you have continuous health insurance after your divorce. Here are some key considerations and options for private insurance plans:
Impact on Private Insurance Coverage:
Firstly, it's important to understand that once your divorce is finalised, you will no longer be considered a family member under your spouse's private insurance plan. This means that you will lose coverage under their policy and will need to find alternative insurance options. It is crucial to have a new plan in place before the divorce is finalised to avoid any lapse in coverage.
Special Enrollment Period (SEP):
Divorce is recognised as a qualifying life event, which means you will be eligible for a Special Enrollment Period to purchase health insurance. This SEP typically allows you 60 days before or after your divorce to shop for and enrol in a new health insurance plan. During this period, you can explore various private insurance plans offered by different providers.
Short-Term Health Insurance:
If you only need temporary coverage while figuring out your long-term insurance plan, short-term health insurance sold by private insurance companies can be an option. These plans are typically available for a limited duration, such as four months (three months plus a one-month extension) within a 12-month period. Keep in mind that short-term plans may have coverage limitations and require medical underwriting, which means sharing information about your health status with the insurance company.
Individual or Family Insurance Plans:
Depending on your situation, you may want to consider purchasing an individual or family insurance plan from a private insurance company. These plans can provide coverage specifically tailored to your needs, including any pre-existing health conditions. Private insurance plans can vary widely in terms of coverage and cost, so it's essential to work with an experienced broker or agent who can help you navigate the options and find a plan that fits your budget and meets your specific health needs.
COBRA Continuation Coverage:
If you were previously covered under your spouse's employer-sponsored health plan, you may have the option to continue this coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows you to temporarily extend your coverage for up to 36 months after your divorce. However, you will typically be responsible for the entire healthcare premium, which can be costly.
Navigating health insurance during a divorce can be complex, and it's important to understand your rights and options. Consult with a knowledgeable insurance broker or agent, and consider seeking legal advice to ensure you make the most informed decisions regarding your private insurance coverage.
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Frequently asked questions
Divorce is a qualifying life event, so you will have 60 days after your divorce to get coverage during a special enrollment period. You can purchase health insurance through the Special Enrollment Period (SEP) or Special Enrollment. You can also continue your existing coverage under COBRA for up to 36 months.
Once the divorce is finalized, your ex-spouse loses coverage and is no longer considered a family member. You will be dropped from their plan and will have to find new insurance coverage.
Yes, you may be able to continue your existing coverage through the Consolidated Omnibus Budget Reconciliation Act (COBRA) for up to 36 months. However, you are responsible for the entire healthcare premium, which can be expensive.
You can consider purchasing an ACA plan, an employer health insurance plan, short-term health insurance, or a marketplace plan from the Affordable Care Act. You may also qualify for Medicaid or the Children's Health Insurance Program (CHIP) if you have low income.
You should consider your budget, ongoing medical conditions, and the level of coverage you need. Compare the costs and benefits of different plans to find one that fits your budget and covers your medical needs.
