What to Know About Health Insurance & Divorce

Understanding Your Current Health Insurance

To understand how your divorce may impact your health insurance, the first thing to do is to understand what health insurance plans you are covered by and your status on that plan.

Many couples share a health insurance plan, with one spouse as the policyholder and the other as a dependent on the policy.

• Insurance through your employer: If your employer provides your health insurance, you are the primary policyholder. If the plan covers your spouse or children, they are your dependents.
• Insurance through your spouse's employer: If your spouse's employer provides your health insurance, your spouse is the policyholder, and you are a dependent, as are your children if you have any.
• Marketplace policies: Whichever spouse obtains this insurance in their name is the policyholder.
• Medicare/Medicaid: These policies are individual and are not impacted by divorce.
• CHIP: Children's Health Insurance Program (CHIP) is insurance for qualifying children and is not impacted by divorce.

Locate your current health insurance card and understand which company provides coverage, who the policyholder is, and what plan you have.

What Happens to Health Insurance During a Divorce

Health insurance policies may provide coverage for family members, such as a spouse and children. If you get a divorce, you and your ex are no longer spouses, and the dependent spouse cannot continue on the family policy.

In many states, once a divorce is filed, the court issues automatic temporary orders that prevent either spouse from making changes to any insurance (canceling or modifying it) during the divorce process.

Reporting Divorce to Your Health Insurer

If you or your spouse have a group health insurance plan that covers the other spouse, the primary insurance holder must report a divorce or legal separation to the insurer, usually within 30 days of the entry of the judgment or order.

They may have a form you need to complete and submit to comply with the terms of your plan.

Such oversight might disrupt coverage and expose both parties to potential legal challenges and financial penalties.

Integrating Health Insurance into Divorce Settlements

Explicitly detailing health insurance in divorce settlement agreements is crucial, especially when children are involved. These terms should specify who covers premiums and the duration of coverage.

Including a lump sum for health insurance in the settlement can prevent future financial uncertainties.

Avoid assuming that employer-provided plans will cover an ex-spouse; most do not. Instead, consider COBRA coverage and its costs within the agreement or provide a lump sum for necessary coverage until alternatives are secured.

For children, ensure the agreement aligns with state guidelines related to child support, clearly defining who is responsible for health expenses. This approach prevents disputes over unforeseen medical costs and ensures children's continued coverage.

Options for Health Insurance After Divorce

If your spouse's insurance plan covers you while you are married, that coverage will end with your divorce. However, you can keep that coverage for 36 months under a federal law called the Consolidated Omnibus Budget Reconciliation Act (COBRA).

When you elect COBRA coverage, you must pay the entire premiums for that plan yourself.

The insurance company should send you a document offering you COBRA coverage and providing the pricing so you can make a decision. You have 60 days to elect to take the coverage.

There are a variety of other ways you can obtain health insurance after divorce.

Opt in to Your Employer's Plan

Divorce is a qualifying life event, which means you can enroll in your employer’s health insurance plan even if it's outside the typical open enrollment period.

To initiate this process, contact your HR department promptly after your divorce is finalized to understand the available plans and the necessary steps to enroll. This ensures that there is no gap in your health coverage, maintaining your access to healthcare services.

Buy Insurance Through the Affordable Care Act (ACA) Marketplace

You also qualify to purchase the insurance plan of your choice on the Marketplace since divorce is a qualifying event.

Consider Eligibility for Medicare

Most people are eligible to sign up for Medicare in the three months before they turn 65 and the three months after (if you have Social Security Disability, you may qualify sooner). If you are not in that age bracket but are 65 or older, you qualify for a special enrollment period because you are losing your current coverage.

Consider Eligibility for Medicaid

Medicaid eligibility is based on modified adjusted gross income (MAGI). It is a federally funded program administered by the states, so each state's plan is different.

Evaluate Short-Term Health Insurance

This might be a good option if you are eligible for Medicare within a year. This type of plan gives you some coverage to bridge the gap.

Handling Health Insurance for Children After Divorce

If there are minor children, a divorce settlement agreement or judgment should specify which parent will carry the child on their health plan.

The agreement or judgment may also discuss how the parents will share the cost as an add-on to child support. Costs such as may be addressed:

• Premiums
• Deductibles
• Co-insurance
• Out-of-pocket expenses

The parents might share the costs, or one parent might be solely responsible for all costs.

FAQ

How Long Can You Stay on Spouse's Insurance After Divorce?

Once the divorce is final, your spouse must notify the health insurance company within 30 days, and your coverage ends on the date of the divorce. You then have 60 days to elect COBRA coverage under this plan, which lasts up to 36 months.

My Spouse Took Me Off Insurance Before Divorce. What Can I Do?

Your spouse can only take you off the insurance during open enrollment or when a divorce or legal separation is final. If you have a divorce in progress, the court usually orders spouses not to make any changes to insurance. If your spouse has done so after your divorce was filed, you can make a motion with the court to require them to reinstate it.

Is Legal Separation a Qualifying Event for Health Insurance?

Yes, legal separation is a qualifying event for health insurance. If you become legally separated, you are no longer eligible to remain on your spouse's policy without electing COBRA coverage. A legal separation also makes you eligible to opt into your employer's plan or sign up for a marketplace plan.

Can I Apply for Medicaid Before My Divorce Is Final?

If you meet the income qualifications for Medicaid, you can apply anytime, even if you are married and planning to divorce. You can qualify for Medicaid even if you are on your spouse's health insurance plan.

Final Thoughts

Dealing with divorce and health insurance simultaneously can be complex, but it is crucial to take the time to ensure that you and your child have coverage after the divorce.