Maxwell Hills | August 15, 2022 | Divorce
Often, married couples rely on one partner’s health insurance plan for coverage. During a divorce, this can mean a lack of coverage once the divorce is finalized, unless you consider divorce mediation to address such matters.
It’s important to research your options and investigate other options for healthcare coverage as soon as possible. Here are some options for health insurance after divorce.
Health Insurance During a Pending Divorce
Once the service of the Summons for Dissolution of Marriage is filed or received, which begins the divorce process, standard family law restraining orders go into effect. This prevents one party from changing or canceling any of the beneficiaries for any insurance coverage, including life, health, disability, or automotive insurance.
Usually, these insurances are held for the benefit of either party and minor children, so one party can’t remove the spouse from insurance coverage while the divorce is pending. Making these changes without a court order could turn into legal challenges, including liability for uninsured medical costs incurred by the spouse. It’s important to consider the potential impact on divorce costs before making any unilateral changes to insurance coverage.
If one spouse believes the other should be removed from health insurance (or other insurance) during the divorce process, they must petition the court for permission. The request may be granted if warranted by the circumstances.
Also, if a spouse obtains their own insurance, the other spouse can obtain a written and signed Stipulation that can be submitted to the court for approval as a court order for protection in the event of an accident or major illness.
In some divorces, one spouse may choose to have the other insured under their employer’s insurance plan. Unfortunately, insurance companies often cancel the insured spouse’s coverage or allege fraud if they aren’t notified of a divorce.
Health Insurance After Divorce
With a shared insurance plan or family insurance plan, the insured spouse will retain coverage and the other spouse will be dropped from the plan when the divorce is finalized. Children will not automatically be dropped from a health insurance plan after divorce, however.
Most employers don’t allow coverage under an ex-spouse’s health insurance after divorce – even if the spouse wants that. In cases where one spouse is in desperate need to stay on insurance, a legal separation may be a better alternative than divorce.
Otherwise, a divorce constitutes a “life event” that allows you to enroll in insurance outside of an open enrollment period, as long as you obtain insurance immediately following the Entry of Judgment.
No Insurance Post-Divorce: Available Options
Employer-Sponsored Insurance
If you are eligible for health insurance through your employer, you can discuss your options with your human resources department. In most cases, this is more cost-effective than COBRA and extricates you from your ex’s life.
Employer health coverage may have enrollment periods, which means you’d need to wait until a certain time of year to join your employer’s health insurance. Divorce is considered a life event, however, and may open a Special Enrollment Period for your employer plan.
Affordable Care Act
The Affordable Care Act, or Obamacare, is a health insurance option on the state exchange or outside the exchange. If you have employer coverage available, however, you won’t be able to get a subsidy to offset the cost of the market plan.
You have 60 days following your divorce within the divorce timeline to obtain coverage during the Special Enrollment Period. Once that timeframe passes, you must wait until the regular open enrollment period to get a new health insurance plan, which typically happens at the end of the year.
Short-Term Health Insurance
Short-term health insurance is an affordable alternative if you’re trying to bridge the gap between the divorce and obtaining health insurance from an employer in the future. Temporary or short-term health insurance plans come with limitations, however:
- You cannot have certain pre-existing conditions
- Temporary insurance can last for six to 12 months, but may be limited to only a few months
- The waiting period for short-term insurance may be a day or longer
COBRA
Continuation of Health Coverage (COBRA) is an option to temporarily extend your health coverage after a divorce. If your former spouse got insurance through an employer with at least 20 employees, COBRA allows you to stay on the plan for up to three years – unless you remarry or enroll in a new plan.
COBRA can be expensive, however. Though you’re staying on your ex-spouse’s plan, you are responsible for your own monthly premiums with no employer contribution. You also need to alert the administrator of the health plan within 60 days of the divorce.
Legal Situations That May Affect Health Insurance Before and After Divorce
Separated, Not Divorced
A legal separation, or limited divorce, is not viewed as the same as a divorce in the state of California. So, if you and your spouse are separated but not living together, you may be able to stay on their health insurance.
Health Insurance in the Divorce Settlement
Health insurance may be included in the divorce settlement in some cases. For example, if you have health coverage on your spouse’s plan, you may be able to include a requirement in the settlement that states that your former spouse must provide insurance coverage for you and your children.
If you’re getting divorced and you had the health plan that covered your spouse, you may have the option to keep your spouse on the plan. But keep in mind that your insurance company may charge an additional premium.
Not Losing Health Insurance Even After Divorce
If you retain your health insurance after a divorce, you may not have rights to choose a new ACA plan. You may qualify to select a new plan because someone left your existing plan or because your household income changed as a result of the divorce.
Frequently Asked Questions
What Is the Best Option for Losing Insurance After Divorce?
If your employer offers health insurance as a benefit, then that’s probably the best option for insurance after divorce. These are often the most affordable. If employer health insurance isn’t an option, then the Affordable Care Act is the next-best option.
How Will Divorce Affect My Children’s Coverage?
The coverage for children may not be affected during a divorce. If your ex-spouse has health insurance that includes your children, it will likely continue after the divorce is finalized. If you both have insurance after the divorce, your child may be able to be insured under both plans.
Is Legal Separation Allowed in California?
California is one state that recognizes legal separations. These agreements do not end a marriage or domestic partnership, but they determine the rights and responsibilities of spouses who wish to live separately.
Get Legal Guidance for Your Divorce
At Hills Law Group, our experienced and compassionate divorce attorneys have over 30 years of combined experience advocating to secure the best possible results for our clients. Contact us today for your case consultation!