According to a study by the National Institutes of Health, there are approximately 1 million divorces per year. Of those divorces, roughly 115,000 women lose their own health insurance after divorce. And of those women, 65,000 remain uninsured.
Furthermore, many of these women remain uninsured for 2 years or longer. Especially at risk is a dependent spouse who relies primarily on their spouse’s company health insurance plan.
For many spouses, losing health care coverage can be one of the more financially stressful changes when a couple divorces. For spouses who keep custody of minor children or other family members, it can be even more challenging to keep medical coverage for everyone.
This article aims to help you better understand:
- How your health care might change after a divorce
- Post-divorce health care options that might be available to you
- Steps you should take to address health care coverage concerns
Let’s start by discussing how your health insurance options might change when your divorce settlement becomes final.
How Your Health Care Might Change After A Divorce
If each spouse has their own medical insurance, a divorce might not change things much.
But in many families, one spouse might have an employer-sponsored health care plan. An employer’s plan usually provides health insurance benefits to the entire family.
If that is the case, then the divorce process can change things quite a bit. Let’s examine how medical care might look for both the former spouse and the children.
Employer-sponsored health care plans are typically flexible when it comes to providing for minor children. An employer plan will usually allow an employee to maintain their own children on their health care plan regardless of marital status.
However, this usually is determined on a case-by-case basis according to applicable child support guidelines.
If you have children from a previous relationship, don’t expect those children to be provided for under your ex-spouse’s health insurance. Under amicable conditions, this might be a point of negotiation. In a more contentious divorce, expect your ex to put up a fight.
However, this does nothing for the dependent spouse’s health care. In most cases, one spouse’s employer coverage does not extend to the divorced spouse.
This depends on many factors. so you will want to get legal advice from your family law attorney and see what legal options exist in your particular situation.
Let’s take a look at some health care options you might investigate.
Post-Divorce Health Care Options
Once your ex-spouse’s policy stops covering you, there are several options worth considering. Let’s look at them one by one. That way, you can determine the best option for you.
1. Your employer’s insurance
Perhaps you already have a job that offers health benefits. If so, then it might be easier for you to obtain health care through your own employer plan. And you shouldn’t have to wait until open enrollment.
Normally, someone would have to wait until the regular enrollment period to make changes to employer health insurance benefits. However, divorce counts as a qualifying life event, for enrollment purposes.
This means that a recent divorcee would qualify for a special enrollment period, allowing them to enroll outside their employer’s open enrollment period. To be sure, discuss your options with your company’s health plan administrator or human resources department.
Even if you don’t currently have a job, you could in the near future. You might choose to enter (or re-enter) the workforce after divorce. Or economics might force that decision for you.
Either way, employer health insurance coverage is a good benefit to look for. If you’re fortunate enough to have multiple job opportunities, don’t overlook the comparison between your employers’ health coverage.
2. COBRA coverage
COBRA benefits can be quite daunting, especially for people who’ve never had to look into it before. Let’s break this down into how COBRA might apply to you.
Also known as the Consolidated Omnibus Budget Reconciliation Act of 1985, COBRA is the federal law that allows health care continuation in certain events. Specifically, COBRA (the law) requires that:
“Any group health plan offer qualified beneficiaries the opportunity to elect continuation coverage following certain events that would otherwise result in the loss of coverage (qualifying events).”
To clarify, a “group health plan” applies to employer-sponsored programs where the employer has 20 or more employees. For smaller employers, COBRA health insurance coverage might not apply.
In a divorce situation, ex-spouses are considered qualified beneficiaries. And a divorce is a qualifying event. An ex-spouse can maintain COBRA continuation coverage for up to 36 months.
COBRA coverage details
While you might be eligible for COBRA, you will probably be responsible for the full cost of COBRA coverage.
The law allows employers to charge up to 102% of the health care premium. The additional 2% going covers administrative costs.
Also, COBRA eligibility only lasts for 36 months. After your COBRA coverage ends, you might be on your own.
However, if you don’t have coverage, or you expect a gap in new coverage, then COBRA insurance might be a good short-term health insurance option. For example, many people fail to consider typical the 90-day waiting period when taking a job at a new company.
3. Government employee health benefits
According to the 2012 Census of Governments, there were over 90,000 state and local governments (and one federal government). These governments employed 22 million people.
If the insured spouse is (or was) a government employee, there might be different rules regarding health benefits. While COBRA rules apply to state and local governments (also known as public sector COBRA), you should take the time to understand your options.
For those whose spouses are (or were) military or federal employees, there are separate rules that apply.
For servicemembers and dependents, TRICARE is the health care program for the military. You can find more information about former spouse coverage on TRICARE’s website.
The Federal Employees Health Benefits (FEHB) program covers federal employees. Similarly, you can find information about former spouse health care coverage on FEHB’s website.
Gray divorce is more prevalent than ever before. According to the Washington Post, the divorce rate for people 65 and older has tripled since 1990.
With that in mind, you might be eligible for Medicare benefits. You can apply for Medicare either on your own employment record or your ex-spouse’s record.
According to the Social Security Administration, you might qualify for Medicare on your ex-spouse’s employment record if you meet the following conditions:
- Your marriage lasted 10 years or longer
- You are currently unmarried
- You are at least 62
- Your ex-spouse is entitled to Social Security Retirement or disability benefits
- The benefit you would receive based upon your work record is less than the benefit you would receive based upon your former spouse’s record
If you’re in a gray divorce situation, it might be worthwhile to look into Medicare coverage options, even if you don’t know whether you’re eligible.
5. Health Care Exchange
Many people think of Obamacare as a last resort. The truth is, the health care exchange designed to be available when nothing else is.
There is an open enrollment season for Affordable Care Act coverage. However, getting a divorce is a qualifying event that allows you to enroll during a special enrollment period.
Going through the health care exchange also allows you to understand what tax credits might be available to you. These credits are based upon qualifying factors, such as income.
6. Health Insurance Agent
If you have trouble navigating the different health care options, you might turn to a health insurance agent. A health insurance agent might be able to help you find the right plan for your budget, income, and health situation.
A good health insurance agent will take the time to learn about your personal and medical situation. They’ll ask questions about your current health conditions or see if you have a pre-existing condition.
That way, they can see what options the health insurance companies offer and help you select the new plan that’s right for you.
If you’re concerned about finding an agent that you can trust, the health care exchange can help you find a health insurance agent in your area.
Steps You Can Take
Finding the right health care coverage requires you to do some heavy lifting. Your divorce attorney isn’t going to do this for you, and your ex spouse definitely isn’t going to.
Since the responsibility is yours, let’s take a look at steps you can take to set yourself up for success.
1. Start early.
Ask this question before your legal separation or before you file for divorce. If you do, you’re more likely to get the information you need.
If this question comes up after you’ve filed, or as you’re finalizing the agreement, then you’re already behind the eight-ball.
So get a better understanding of COBRA, if that’s a possible option. Start looking at the health care exchange, or talking to a local health insurance agent.
You won’t get all the answers at once. But you can at least take some steps to better understand what health care might look like after your divorce.
2. Do your homework.
Just because you ask the question doesn’t mean that people are going to come out of the woodwork with all the answers.
The answers are out there. But you have to know where to look and take time to do the work for yourself. And that means setting aside time to do the research.
If you haven’t discussed divorce yet, you might be fearful of tipping your hand.
But even if you don’t ever get divorced, you should still understand what your current health care looks like. So you can at least start by becoming familiar with your current health insurance policy.
3. Take the long view.
For those of you thinking about COBRA, that’s a decent option. But that’s only available for three years.
What’s your plan after that? Perhaps you need to have coverage for a couple of years until you’re eligible for Medicare. Or you plan to use COBRA until you finish school, then get new health insurance from your employer.
An important consideration is that your plan needs to be good for the short-term AND the long-term.
4. Capture the costs.
Don’t shortchange anything here. Make sure you understand the monthly cost of your health insurance premiums, as well as any additional cost you might be incurring from your own pocket.
The purpose of capturing the costs is so that your lawyer has relevant information to negotiate on your behalf during the divorce proceedings. While you might settle for a lower cost plan, you need to get the relevant information for the plan you feel is appropriate for your situation.
5. Engage your attorney.
Once you’ve done your research, make sure your family law attorney knows everything. That way, you can ensure that your costs (like monthly premiums) are captured in your financial affidavit.
If you already put information into your financial affidavit, you can always update it with new, relevant information.
For example, let’s say that you put down the health insurance cost under the insured spouse’s plan when you initially filled out your affidavit. After you discovered your increased health care insurance costs under COBRA or another plan, it’s perfectly fine to update your affidavit!
Otherwise, how is your attorney supposed to negotiate on your behalf?
6. Make sure it’s in the divorce agreement.
After the divorce decree is signed, you’re likely stuck with the end result. Or you’ll spend a lot of time and money trying to undo a perceived injustice through a court order.
It’s much better to make sure that your agreement contains acceptable terms. This will allow you to obtain the health care insurance that you need in your post-divorce life.
While divorce is financially stressful, losing health insurance coverage can have lingering financial impacts long after the divorce is final. Obtaining health care is one of the most crucial steps you can take to financially protect yourself.