Managing Health Insurance Through Divorce

Posted by on in Life Transitions

Please note, our Short Term Medical insurance is intended for temporary gaps in health insurance.  It is not compliant with the federal Affordable Care Act and does not cover expenses related to pre-existing conditions.

For couples going through a divorce, making decisions dividing your home and other assets and resolving custody issues may be top of mind. But you should also make it a priority to maintain health coverage for you and your children.

Among the issues to resolve: Can you retain coverage under your spouse's plan? Will your children be covered? What options do you have for temporary coverage?

No matter what, "you don't want a gap in coverage," says Michele Sacks Lowenstein, a San Diego, California-based attorney and certified family law specialist.

Know your healthcare rights

couple consulting with attorney

If you receive health coverage through your spouse, you may be entitled to retain the same level of coverage throughout the divorce process. For example, Lowenstein notes that in California, state law provides for an automatic restraining order that prevents parties from changing health care coverage during the filing process.

Where children are concerned, health coverage will be typically be included in custody and support orders, according to 360 Degrees of Financial Literacy.

Can you retain coverage through your former spouse?

Once the divorce is finalized, you typically will no longer be covered under your former spouse's employee health insurance policy. Depending on the laws in your state, it may be possible to delay the "termination of marital status" to allow you to retain coverage until the divorce is finalized, Lowenstein says.

For example, a couple that begins a divorce proceeding in January can file all necessary paperwork over the course of the year, but not finalize the divorce until the end of the year. Lowenstein notes that most couples will want to have the final divorce decree by the end of the calendar year for tax purposes; your status as of December 31 of a calendar year determines whether you will file as single or married.

Compare COBRA, other plans

According to CobraInsuranceDirect.com, if you receive health benefits through your spouse's employer, you may be able to pay for them directly through the federal Consolidated Budget Reconciliation Act.

woman talking on phone and writing

COBRA, which applies to companies with 20 or more workers, allows people getting divorced to receive benefits from their ex-spouse's employer for up to 36 months after the marriage has been terminated. In many states, mini-COBRA rules apply to firms with fewer than 20 workers.

Under COBRA, you have 60 days from the time the divorce becomes official to let your ex-spouse's employer know that you want to activate the COBRA option for you and/or your children.

There are exceptions to COBRA –– federal civil service employees and those in the military are subject to different rules.

In addition, COBRA benefits may be more costly than plans offered by your own employer or under the Affordable Care Act.

Impact of the Affordable Care Act

Similar to COBRA, the Affordable Care Act, aka Obamacare, provides a 60-day special enrollment window after a divorce or other qualifying event during which you can sign up for a healthcare plan. Otherwise, you will have to wait until the next open enrollment period to apply for coverage.

The ACA also gives parents the ability to cover children up to age 26 on their health policies.

Short-term coverage is available

For those who need immediate coverage following a divorce, a temporary plan may provide the best option. HCC Life Short Term Medical lets you select a deductible, co-insurance and the term of policy for you and your offspring.

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