Image: Mike Maguire / Flickr
If you’re in the process of divorce and fear losing your health insurance, there’s actually a way to keep your current healthcare coverage.
From an emotional, mental, and financial perspective, divorce is a challenging event for any family to navigate. Though it may be the last thing you want to think about, understanding how to maintain your health insurance after divorce can keep you from financial hardships in the future.
What are my health insurance options after divorce?
If you have your own health insurance, independent of your spouse’s, then you can maintain your insurance status without changes. If you’re a dependent, then there are a few options you will want to consider.
- Elect coverage with your own employer, if that’s an option. Divorce is a qualifying life event, so even if it’s outside your employer’s plan election period, you’ll be eligible to sign up for coverage.
- Purchase an individual plan through the health insurance marketplace for your state, or you can opt for a short-term health insurance plan for more immediate needs.
- Choose to remain on your health insurance after divorce the Consolidated Omnibus Budget Reconciliation Act (COBRA).
How can I stay on my spouse’s health insurance?
Well, it depends and it’s really up to the judge presiding over the divorce case. Hal Stansbury, director of business development at a Memphis-based insurance brokerage, says:
“If you’re covered through your ex’s plan, the court can order continued coverage through his/her existing plan or the judge can order you to file for COBRA under your ex’s policy.”
If you must file for COBRA then you’re responsible for paying the premiums yourself. By electing COBRA, the details of your plan stay the same: deductibles, coinsurance, networks, and out-of-pocket maxes. So, if you like your coverage, this option may be best but it will be expensive.
What is COBRA and how do I file for it?
COBRA protects workers and their families from immediately losing health insurance because of job loss, transition between jobs, or divorce. In other words, it protects someone from having immediate, unexpected loss of health insurance. It’s a requirement for any company with over 20 employees to offer this.
Once a Qualifying Event (such as divorce) is reported to the health insurance plan, the insurer must send out a notice to each qualified beneficiary letting them know of their right to elect COBRA. This notice will typically include an enrollment form and a premium schedule. The qualified person (in this case, you, the person recently divorced and got your current health coverage through your spouse) must then let the health insurance plan know within 60 days if you choose to elect or not.
Remember, if you stay on COBRA, you are responsible for the premium yourself. That means the employer sponsored portion, too. This generally makes COBRA the most expensive option in comparison to electing your own coverage through your employer or the health insurance marketplace.
How long can I stay on COBRA?
Divorced spouses can stay on COBRA for a maximum of 36 months.
How is a child’s insurance coverage affected?
According to Stansbury, this is also dependent on the judge who rules over the divorce case. “Normally it depends on who is covered, for example, the parent who is covered through his/her job,” Stansbury says. Like spouses, children are eligible to be covered under COBRA. It’s up to the judge who will pay for the child’s COBRA premium.
Unfortunately, because many details are left to be determined until the divorce case is settled, it’s challenging to say exactly what will happen to your health insurance after a divorce. Regardless of which plan you use to maintain health coverage, it’s important to know all options available to you. Stansbury recommends finding legal representation immediately to ensure that everything is handled in the most efficient way possible. By preparing ahead of time, you will set yourself up for the best financial option available.