- Health insurance during divorce
- Health insurance after your divorce is finalized
- What is COBRA and how much does it cost?
- Other health insurance options after divorce
- Can I include health insurance in a divorce settlement?
- Health insurance checklist
Key facts about health insurance and divorce
Once the decision to divorce is made, an avalanche of change follows. Some changes happen quickly; others take time. If you depend on your spouse for health insurance, or if your spouse depends on you for health insurance, this will likely be one of the changes. But when will the change occur? And what can you expect in the meantime?
Here are some key facts about health insurance and divorce, along with answers to frequently asked questions and tips for how to avoid a lapse in coverage.
What happens to health insurance during divorce?
Every state has a law that prohibits one spouse from kicking the other off their existing health insurance plan during a divorce. It's sometimes called Standing Orders, ATROs, or no formal order name at all.
Let's assume, for a moment, that you receive your health insurance through your spouse's employer. In the months leading up to the finalization of your divorce, you may be wondering whether you're still covered. In almost every situation, the answer is yes. The reason: When a person files for divorce, your state's orders take effect (usually ATROs).
With an ATRO in place, your spouse is forbidden from changing the beneficiaries on their health insurance policies. Now, let's assume that your spouse depends on you for health insurance. The ATRO still applies. In other words, you are forbidden from removing your spouse from your health insurance plan in the months leading up to your divorce.
ATRO exceptions
If one spouse feels the other should no longer be covered by a joint health insurance policy in the months preceding the divorce, they can petition the court with their concern. For example, if the covered spouse has obtained health insurance elsewhere, it may no longer be necessary for them to be named on the other policy. Notably, the only way around an ATRO is with a court order.
What happens to health insurance after your divorce is finalized?
An ex-spouse’s eligibility for continued coverage under the other spouse’s health insurance policy almost always terminates once the divorce is finalized. In other words, if you depend on your spouse for health insurance, that coverage will end when the divorce is finalized. If your spouse depends on you for health insurance, their coverage will end when the divorce is finalized.
There is at least one exception to this "rule." In Massachusetts, state law allows ex-spouses to remain on the subscriber’s health insurance policy after divorce, provided they do not remarry and the insurance policy permits such continuation.
Losing your health insurance coverage can be a jarring experience. All of a sudden, you may find yourself unable to see your doctor or receive free or low-cost prescriptions. Thankfully, there is a (temporary) way around this: COBRA.
What is COBRA, and how much does it cost?
COBRA stands for the Consolidated Omnibus Budget Reconciliation Act. Through this act, a dependent can elect to continue receiving insurance benefits from their spouse's employer after a qualifying event (in this case, divorce). Notably, the COBRA benefit only applies in situations where the employer has 20 or more employees. The employer has 45 days to notify the dependent of their right to COBRA insurance coverage. This is communicated through a COBRA election notice. COBRA coverage can last up to 36 months.
What if I incur health insurance charges in those 45 days?
If you need COBRA insurance but don't get the paperwork right away, you may feel vulnerable during those days when you are seemingly uninsured. And, in fact, you will have to pay any medical bills you incur during that time. However, if you end up taking COBRA insurance, you will eventually be reimbursed for those charges.
How much does COBRA cost?
Although you may qualify for COBRA, you might decide to skip it. COBRA is not cheap. Based on information found at cobrainsurance.com, you could end up paying anywhere from $400 to $700 per month per person for COBRA insurance. (Note: Although the "per person" part may sound intimidating, remember that dependent children do not lose health insurance coverage during a divorce. So, if your kids are on your ex's policy, they stay on your ex's policy.)
What are other health insurance options after divorce?
Although COBRA is an option, it's an expensive one. If you lose coverage from your spouse's group plan through a divorce, you don't have to buy COBRA insurance. You have other choices.
Option 1: Find out if your employer offers group health insurance
If health insurance through your employer is an option, it may be your best bet. Learn about the benefits offered by your employer and what types of premiums to expect.
Option 2: Obtain a personal health insurance policy elsewhere
In March 2010, the Affordable Care Act took effect. This act allows individuals with moderate to low incomes to purchase health insurance with help from government subsidy money. The best way to see if you'd qualify for this insurance (and how much you might pay) is to visit healthcare.gov.
Option 3: Enroll in Medicare post-divorce
There are several ways to qualify for Medicare insurance. For example, if you are 65+, qualify for Social Security, and served the workforce for 10+ years, you are eligible. If you were married for 10+ years to a person who now qualifies for Medicare, you may also be eligible. If you think you may qualify for Medicare insurance post-divorce, you may have to wade through some rules and details, but it's a good idea to explore your options.
Option 4: TRICARE
TRICARE is health insurance for active duty service members (ADSMs) of the U.S. military and their families. Through TRICARE, you may still be eligible for coverage after divorce. TRICARE has a 20/20/20 rule that allows you to remain covered if you were married to your ex for at least 20 years. If this person served at least 20 years, or if your marriage and their service overlapped for 20 years, you may also be eligible. TRICARE also has a 20/20/15 rule. The coverage is not as comprehensive under this rule, and it only lasts for up to one year.
Option 5: Medicaid
Medicaid is government-provided health insurance for low-income Americans. If you will lose health coverage after your divorce, a Medicaid application is worth considering. Your first step is to determine whether you would qualify for Medicaid benefits. The best way to do this is to reach out to your state Medicaid office. Because these offices are busy and it can sometimes be tricky to get in contact with someone, you might also decide to peruse its website.
Can I include health insurance in a divorce settlement?
As you negotiate the terms of your divorce with your spouse, mediator, or lawyer, keep health insurance coverage in mind. For example, your ex might agree to pay your COBRA premiums for a set period of time after the divorce to keep you on your feet. Or, if the roles are reversed, you might agree to do the same for your ex.
Depending on your situation, a judge may stipulate the same thing. For example, the court may order your ex to cover your COBRA premiums for up to 36 months after the divorce is final. Or, the court may order you to pay COBRA premiums for your former spouse.
Other creative solutions exist, too. For example, your ex might agree to purchase a Marketplace healthcare plan for you and pay your premiums for a set amount of time. Or, you might offer to do the same for your ex.
At this point in your divorce process, exploring various options to find the most economical plan would be a wise move. We understand that in divorce, you're inundated with paperwork, due dates, emails, and other tasks. In fact, that's why we founded Hello Divorce: to simplify the process so you don't feel so overwhelmed.
You may feel like you're drowning in your own to-do list, but remember to keep one very important lifeline afloat: your health insurance coverage.
Here's a checklist of things to do regarding health insurance:
1. Report your divorce to your employer and health insurance company
Regardless of where you get your healthcare insurance at the start of your divorce – your employer, your spouse's employer, the Affordable Care Act, COBRA – you must report your changed marital status once the divorce is finalized. At most, you will have 60 days to report this change. Each health insurance program is different, so find out for sure what the rules are from your provider. If you have dependents who will undergo a change of insurance, report this as well.
What if you don't report the change in time?
If you don't timely report a change in your marital status and want COBRA insurance, you could lose your chance to get it. Failure to timely report the change to healthcare.gov, if you receive insurance through the Affordable Care Act, could result in a lapse in coverage until the next open enrollment period. And if you don't inform an employer of your change in marital status, you run the risk of having no coverage.
2. Find out about COBRA eligibility
As mentioned, COBRA health insurance is an option, albeit an expensive one. But not all employers offer COBRA, so find out if it's even a possibility. Then, if it is, find out how much it would cost, and compare that expense to your post-divorce budget.
3. Find out about your own employer's healthcare offerings
If you hold a full-time job and are about to lose healthcare coverage due to divorce, find out if your employer offers healthcare benefits.
4. Shop the Marketplace
You can apply for Marketplace insurance during the open enrollment period. You can also apply if you've had a recent life change, such as getting divorced. Check the healthcare.gov website for dates, deadlines, and information about special enrollment periods.
At Hello Divorce, we strive to help people through all aspects of divorce, from the legal to the practical to the emotional. If you're at any stage of divorce right now – considering it, going through it, or recovering from it – follow us on Instagram for more tips and support.
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