How Does Divorce Affect Your Health Insurance?
A divorce can seriously complicate your health insurance coverage. Most families have an employer-sponsored plan that provides benefits for the entire family. Following a divorce, the spouse with the employer-provided health insurance plan can no longer provide coverage for the ex-spouse. A divorce will cause the dependent spouse to lose his or her healthcare coverage. Though this is a harsh reality, it is one of the many unfortunate repercussions of divorce. In the event that both spouses do not have access to sufficient health insurance coverage and COBRA or other alternative coverage is too costly, there is another option. The couple can delay the divorce and maintain healthcare benefits by entering into a separation agreement. In this post, we'll discuss how divorce affects health insurance coverage and explain what the options are for the dependent spouse.
About COBRA
Many ex-spouses turn to COBRA coverage for medical benefits following a divorce. COBRA is a federal law that allows you to continue coverage in an employer's insurance plan even after you become ineligible due to job loss or divorce. However, once you become ineligible, the employer is no longer responsible for paying the premiums, and so a divorced spouse must pay his or her own premiums to continue coverage. COBRA coverage can be obtained for up to 36 months.
Post-Divorce Insurance Options
Divorce requires you to tie up a lot of loose ends, and maintaining health insurance coverage should be a top priority among them. After a marriage ends, divorced spouses have four main options for healthcare coverage:
- Continue with your ex-spouse's coverage through COBRA. As mentioned before, you can obtain COBRA coverage for 36 months as long as you pay the premiums. The downside of this option is that COBRA is extremely expensive.
- Have your current employer provide coverage. You can also obtain your own healthcare coverage through your current employer. Most employers offer very affordable group healthcare coverage.
- Request health insurance coverage as part of your divorce settlement. This is not a surefire way to get health insurance, but it is worth mentioning to your lawyer. Because COBRA coverage usually ranges from $650-$750 per month, an ex-spouse would be wise to obtain a settlement where the other spouse is responsible for these payments.