Divorce can easily affect many different parts of your personal and financial life. One thing you want to understand is how it affects your health insurance coverage. If you currently receive health insurance through your spouse’s employer-sponsored plan, your divorce can change your eligibility. Understanding what may happen can help you determine how to move forward to ensure you have coverage.
Can You Stay on Their Plan?
In most cases, when you go through a divorce, you may no longer remain on your former spouse’s plan. This is because you’re no longer seen as a dependent under that spouse. However, the exact date that your coverage ends really depends on your divorce and the terms of your health plan.
It’s fairly common for eligibility to be rescinded when your divorce is finalized. This is simply because you no longer meet the eligibility requirements to be under your spouse’s employer-sponsored health insurance plan. There are many other coverage options, like COBRA and obtaining coverage through your own employer, that you can take advantage of.
Understanding COBRA
Simply put, COBRA is a federal law that allows specified people to temporarily continue employer-sponsored group health coverage even after they technically lose their eligibility. There must be a qualifying event in place, like a divorce. For example, if you were covered under your spouse’s employer-sponsored health care plan and your divorce causes you to lose that coverage, you may still qualify for continuation through COBRA.
COBRA sets a limited period where you can still receive the same health plan coverage without technically meeting the eligibility requirements. While COBRA can be extremely helpful for bridging that ineligibility gap for a short time, it does come with some caveats. Because the employer previously paid a part of the premium, COBRA may require you now to pay the full cost of your coverage. They may also charge an administrative fee. This makes it exceedingly important to compare all your prospective health care coverages before determining which one to go with.
Healthcare Coverage for Your Children
Another major concern when it comes to health care coverage when going through a divorce is coverage for your children. If your children are currently covered under one parent’s employer-sponsored health plan, it’s important to ensure that they remain covered. The divorce agreement may address which parent has to maintain coverage for the children.
It can be helpful to take into account particular aspects of a plan, like its deductible, copayments, coinsurance, provider network, prescription coverage, and so much more. This will allow you and your former spouse to determine which health insurance makes the most sense moving forward. It’s also important to note that your divorce agreement should address how uninsured medical expenses will be divided between you and your spouse. These include things like deductibles, copayments, prescriptions, dental care, vision care, and so much more.
Timing Matters
Health insurance coverage doesn’t just drop because you and your spouse decided to separate. The change in coverage happens whenever your divorce papers are finalized. Different health insurance plans can specify different termination dates. For example, some plans may terminate coverage on the date of the divorce, while others may specify a different ending date in the future.
Because each plan can vary, it’s important to contact the plan administrator or insurance company before you ever finalize your divorce. This will allow you to determine how long coverage will remain. An experienced divorce lawyer like the attorneys at Davis & Associates can help you determine the appropriate questions to ask the health insurance provider to ensure you have the facts you need to make an informed decision.
Will Divorce Qualify You for Special Enrollment?
The health insurance Marketplace does provide special enrollment for people who experience life-changing events. In many cases, this includes certain losses of health coverage due to a divorce. This special enrollment can allow you to enroll in a Marketplace plan outside of the normal annual open enrollment.
If you’re considering getting Marketplace health care coverage after your divorce is finalized, it’s best to compare plans before your existing coverage ends. Look at things like deductibles, copays, premiums, out-of-pocket maximums, and prescription coverage. Understand specific deadlines and eligibility requirements so you can ensure you establish an active plan after you lose your former spouse’s employer-sponsored health plan coverage.
What Happens If You Have Health Insurance With Your Employer?
One of the easiest situations to deal with is if you already have health insurance through your own employer. In a lot of cases, your divorce won’t affect your coverage. You can typically still have the same coverage you had before the divorce without any effect on your existing plan or coverage for your children.
How Divorce Affects Health Insurance Premiums
One of the most frustrating challenges after divorce can be finding affordable health insurance. When you were covered under your spouse’s employer-sponsored plan, you paid only a portion of the premium. After your divorce, you may be responsible for obtaining and paying for your own coverage. The cost of getting your insurance will vary significantly depending on the type of coverage that you choose.
COBRA, employer-sponsored coverage, and Marketplace plans all have different premiums and out-of-pocket expenses. Taking the time to compare these costs before your divorce is finalized will help you to determine what you need to budget for when it comes to health care coverage. Be sure not to just look at the premium. A plan with a lower premium may have a higher deductible and require you to pay more for your required medical expenses.
Instead, it’s important to take into account all the different factors for each individual plan when determining the right one for you. Some key factors you want to consider include coinsurance, copays, deductibles, out-of-pocket maximums, and premiums. If you already have an established physician and pharmacy, you want to ensure that your new plan has them in its preferred network. Comparing all of these factors can help you find a plan that fits your coverage needs after your divorce.
