Guide to Children's Health Insurance after Divorce

• Parental responsibilities for kids’ healthcare after divorce
• The Affordable Care Act
• Common child health insurance arrangements
• Make changes a child’s health insurance
• Where to buy health insurance for a child
• Additional expenses to consider

When parents of minor children decide to divorce, one of their most important considerations is the health and welfare of their children. While divorce laws vary by state, they’re all specific in one important regard: Both parents are responsible for the physical and financial care of their children post-divorce. 

Part of this equation is making sure the kids have appropriate healthcare. Here’s what you need to know about children’s healthcare and health insurance after divorce.

Parental responsibilities for kids’ healthcare after divorce

Some people assume the higher wage earner is responsible for the children’s health insurance after divorce. This isn’t necessarily true. Every state requires both parents to provide for their children after their divorce – including adequate health insurance coverage. 

Financial responsibility for children’s health insurance is typically addressed in the divorce agreement or court order. Key points include:

• Parental responsibility: One or both parents may be required to maintain health insurance for the child, depending on their financial situation and employment benefits.
• Cost sharing: The cost of premiums, deductibles, and out-of-pocket expenses may be shared between the parents, often based on their incomes (factoring in debts, too).
• Court orders: If parents can’t come to their own legal agreement, courts often specify who must provide coverage and how medical expenses not covered by insurance will be divided.
• Changes in coverage: Any changes in employment or insurance availability may require modifications to the agreement, ensuring the child remains covered.

State laws vary in how they divide parents’ financial responsibility for their children. Generally, after divorce, a non-custodial parent is ordered to pay monthly child support to the primary custodial parent (there might be different scenarios for parents with joint, or equal, custody). These payments are meant to equalize expenses for the kids between parents. The cost of children’s healthcare coverage is considered part of this overall financial support. Often, it is baked into a couple’s child support agreement. 

Chart: Responsibilities of custodial vs. non-custodial parents

Notes:

• This chart provides a simplified overview, and actual responsibilities may differ based on the specific details of a divorce agreement or court order.
• Legal requirements and expectations can vary significantly state by state, so it's essential to consult state-specific laws or a legal professional for precise information.
• Courts usually have the discretion to tailor arrangements based on the best interests of the child and the specific circumstances of the parents.

The Affordable Care Act

Under the Affordable Care Act (ACA), a qualifying life event is a significant change in your life (including divorce) that affects your health insurance coverage and allows you to enroll in or change your health insurance plan outside of the regular open enrollment period.

Common health insurance arrangements post-divorce

Most parents receive health insurance through their employers, and their children are typically covered by those policies as well. But when a divorce is finalized, one spouse may be dropped from the other spouse’s policy, if they were covered under their spouse’s employer-sponsored insurance. 

What happens to the children’s healthcare coverage after divorce? This depends on the arrangements made by their parents. Several options exist.

Child stays on custodial parent’s healthcare insurance

The custodial parent may have agreed to maintain health insurance coverage for the kids – or, they may have been ordered by the court to do so. The non-custodial parent’s monthly child support payment will typically include their share of this expense. 

Child stays on non-custodial parent’s healthcare insurance

Some state laws require the non-custodial parent to arrange for and pay for health insurance for their children. In this case, child support to the custodial parent would be reduced to reflect that coverage.

Child stays on both parents’ healthcare plans

Coordination of benefits (COB) is the process used when a person is covered by more than one health insurance policy, often a child. The primary policy pays first, and the secondary policy may cover some or all of the remaining costs. Here are a few examples of how this works in practice:

Example 1: Child with divorced parents

Scenario: A child is covered by both parents' health insurance plans. The mother’s plan is considered the primary insurance, and the father’s plan is secondary.

How it works:

• Primary policy: The mother's insurance processes the claim first and pays according to its coverage terms.
• Secondary policy: The father's insurance may cover remaining costs not paid by the primary policy, such as co-pays, deductibles, or additional services, depending on the policy terms.

Example 2: Parent with multiple plans covering a dependent

Scenario: A child or other dependent is covered under both parents' health insurance plans, and both parents have their own insurance through their employers.

How it works:

• Primary policy: The "birthday rule" is often applied. The parent whose birthday (month and day, not year) comes first in the calendar year has their plan designated as the primary coverage.
• Secondary policy: The other parent’s insurance becomes secondary. The primary plan processes and pays the claim first, and the secondary plan may cover any remaining eligible costs.

In each case, the coordination of benefits ensures that both parents share the responsibility to come up with 100% of the covered expenses and helps reduce out-of-pocket costs. However, the specifics of how COB works can vary based on the policies involved and state regulations.

Parents purchase a private plan for the child

If neither parent has access to healthcare for their children through an employer, one co-parent must purchase a private policy or one through the Affordable Care Act to cover the children. The child support agreement will likely reflect the cost of the premiums paid by one parent.

Parents enroll child in a Medicaid or CHIP program

If neither parent has access to reasonable healthcare through their employer and can’t afford a private policy or a policy through the Affordable Care Act, they may look to government programs like Medicaid or the Children’s Health Insurance Program (CHIP). Each state administers these programs under federal guidelines. To qualify, families must prove their financial eligibility. 

Medicaid and the Children's Health Insurance Program (CHIP) are federal and state programs designed to provide health coverage to low-income individuals and families, including children, pregnant women, elderly adults, and people with disabilities. Here's an overview of the eligibility criteria and the application process, along with guidance on finding state-specific resources.

Application process for Medicaid and CHIP

1.  Online: Most states allow individuals to apply for Medicaid and CHIP online through the state's health department or marketplace website. The federal Health Insurance Marketplace (HealthCare.gov) can also be used to apply in states that participate.
2.  In-person: Applications can often be submitted in person at local Medicaid offices, health departments, or through community organizations.
3.  Mail or phone: Some states allow applications to be submitted by mail or over the phone.
4.  Documentation: Applicants need to provide an approved government-issued ID and proof of income, citizenship or immigration status, and residency. This might include pay stubs, tax returns, Social Security numbers, and utility bills.
5.  Determination and enrollment: After applying, the state determines eligibility, usually within a couple of weeks. If approved, coverage can be retroactive to the date of application or the beginning of the month.

To find specific details for your state, you can visit the national Medicaid and CHIP program portals or directly access your state’s health department website. The federal HealthCare.gov site can also guide you to the appropriate state resources for Medicaid and CHIP applications.

How to make changes to children’s health insurance after divorce

Follow these steps to help ensure your children maintain continuous and adequate coverage:

Step 1: Review your divorce decree

• Check the agreement: Which parent is responsible for providing health insurance for the children?
• Understand the provisions: It may specify whether one parent will provide coverage, how costs will be shared, and what happens if the responsible parent’s circumstances change (e.g., job loss, remarriage).

Step 2: Assess current coverage

• Evaluate existing policies: Determine if the current health insurance policy covers the children adequately. Consider coverage limits, network restrictions, and out-of-pocket costs.
• Compare costs: If both parents have access to employer-sponsored health insurance, compare the costs and benefits of each plan to decide the best option for the children.

Step 3: Update or change insurance coverage

• Notify the insurer: If the divorce results in a change, contact the current health insurance provider to update the policyholder information.
• Enroll in a new plan: If a new plan is needed, enroll the children in the new plan within the required timeframe. Divorce is typically considered a qualifying life event, allowing changes to health insurance outside of the open enrollment period.

Step 4: Understand coordination of benefits

If the children are covered by both parents' health insurance plans, understand how Coordination of Benefits (COB) works. The primary policy pays first, and the secondary policy may cover any remaining costs. Typically, the parent whose birthday comes first in the calendar year has the primary insurance policy for the children.

Step 5: Handle ongoing medical costs

• Determine responsibility for costs: The divorce agreement should specify how uncovered medical expenses (e.g., co-pays, deductibles, out-of-network care) are shared between the parents.
• Keep records: Maintain detailed records of all medical expenses, insurance claims, and payments made by both parents. This is important for resolving disputes and ensuring compliance with the divorce agreement.

Step 6: Notify healthcare providers

Inform your children’s healthcare providers of any changes in insurance coverage, including new policy numbers and billing instructions. Make sure that the children’s current doctors and specialists are in-network under the new insurance plan. If not, you may need to switch providers or seek out-of-network coverage.

Step 7: Address special situations

• Changes in employment: If the parent responsible for providing insurance loses their job, gets a new one, or otherwise loses coverage, they may need to obtain COBRA coverage temporarily or enroll in a new plan.
• Relocation: If one parent relocates to a different state, consider how this affects the children’s health coverage, especially if the move changes the insurance network.

Step 8: Modify the divorce agreement (if necessary)

If there are significant changes in circumstances (e.g., job loss, remarriage), it may be necessary to modify the divorce agreement to reflect new health insurance arrangements. You can file a motion to modify the divorce decree to ensure that any changes in health insurance responsibilities are legally recognized.

Step 9: Communicate with your co-parent

Clear and open communication with your ex can help resolve issues related to your children’s health insurance more smoothly. Try to work together on health-related decisions to ensure your children receive consistent care and coverage.

Step 10: Monitor and reevaluate coverage

Health insurance needs and options can change over time, so regularly review your children’s coverage to ensure it remains adequate. Be proactive about making adjustments if a better plan becomes available or if your children’s healthcare needs change.

Where can I purchase health insurance for my child?

Depending on your children’s current health insurance coverage, you may not have to worry about purchasing other health insurance coverage for them. If you or your ex-spouse has healthcare coverage for them already, your divorce won’t change that. The only thing that will change is how you'll divide your financial responsibility for that coverage between yourselves. 

There are other options for healthcare insurance for your kids if you need to look elsewhere for coverage:

COBRA

COBRA (Consolidated Omnibus Budget Reconciliation Act) allows individuals and their dependents to continue health insurance coverage under a former employer’s group plan after a qualifying event, such as divorce. 

Here’s a detailed guide on the process, timeline, and critical deadlines for utilizing COBRA coverage for children after divorce:

1. Determine eligibility

• Qualifying event: Divorce is a qualifying event under COBRA. If the custodial parent had health insurance coverage through their employer, the children might be eligible for COBRA continuation coverage if they were covered under the policy.
• Dependents: Children covered under the divorced parent’s health insurance are considered qualified beneficiaries eligible for COBRA.

2. Notification of qualifying event

• Responsibility: The employer or plan administrator must be notified of the qualifying event (divorce) within 30 days. However, in practice, the insured spouse or the plan administrator should be notified as soon as possible.
• Timing: Notification must be made within 60 days of the qualifying event or the date on which the coverage ends (whichever is later).

3. COBRA election notice

• Employer’s duty: The employer is required to provide a COBRA election notice to the qualified beneficiaries within 14 days after receiving notice of the qualifying event.
• Content: The notice includes information on the right to elect COBRA coverage, the cost of coverage, and the deadlines for making an election.

If you have healthcare options through your employer after losing coverage on your spouse’s policy, your children (and you) should be able to "special enroll" in your employer’s plan after the divorce.

4. Election period

• Election deadline: Qualified beneficiaries have 60 days from the date they receive the COBRA election notice or from the date coverage ends (whichever is later) to elect COBRA coverage.
• Action required: To elect COBRA coverage, complete and return the election form included in the notice. Submit the form before the end of the 60-day period to avoid losing the right to COBRA coverage.

5. Premium payments

• Initial premium: After electing COBRA, you must pay the first premium within 45 days of the election. This payment should cover the period from the date coverage began under COBRA.
• Ongoing payments: Monthly premiums must be paid on time to maintain coverage. Premium payments are due on the first day of each coverage period, but there is a grace period of 30 days for each monthly premium.

6. Coverage duration

• Standard coverage: COBRA coverage typically lasts for 18 months from the date of the qualifying event (divorce). In some cases, coverage can be extended to 36 months if there are additional qualifying events, such as the death of the covered employee or a disability determination.
• Extension: Notify the plan administrator if you qualify for an extension due to disability, which may extend coverage by an additional 11 months.

7. Reinstatement and termination

• Reinstatement: COBRA coverage begins the day after the previous coverage ends. It is not retroactive, so any medical expenses incurred before the COBRA election will not be covered.
• Termination: COBRA coverage may end before the maximum period if: (A) Premiums are not paid on time; (B) The employer ceases to offer a group health plan; (C) The beneficiary becomes eligible for Medicare; (D) The beneficiary becomes covered under another group health plan.

8. Monitor and review coverage

• Review plans: Periodically review the COBRA coverage and costs, especially if the child's health needs change or if there are other insurance options available.
• Alternative coverage: Explore other insurance options, such as plans through the Health Insurance Marketplace or Medicaid/CHIP, as COBRA can be expensive and may not be the most cost-effective option.

COBRA critical deadlines summary

1.  Notification to employer/plan administrator: Within 30 days of the divorce.
2.  COBRA election notice: Within 14 days of the qualifying event notification.
3.  Election period: 60 days from the date of the notice or the end of coverage.
4.  Initial premium payment: Within 45 days of the election.
5.  Monthly premium payments: Due on the first day of each coverage period, with a 30-day grace period.

Medicaid or CHIP

If neither of you can afford healthcare coverage for your children, you may qualify for Medicaid or the CHIP program in your state. See above for information on these programs.

It’s important to remember that there will be out-of-pocket expenses beyond the costs of the child’s health insurance premiums to consider, such as copays and things not covered by insurance. You and your spouse must also agree on how you will share these costs.

Common out-of-pocket expenses that parents should anticipate post-divorce

Post-divorce, parents might face several common out-of-pocket expenses beyond health insurance premiums. Here are some to anticipate:

• Child support and spousal support/alimony
• Legal fees related to modifying custody or child support agreements; legal issues
• Childcare and extracurricular activities
• Education
• Out-of-pocket costs for medical, dental, or vision care
• Transportation costs
• Home maintenance to provide a comfortable living environment for the child
• Counseling and therapy for children to help them adjust to the changes
• Emergency expenses

Planning ahead for these expenses can help manage the financial impact of divorce on a family. You need to determine a fair arrangement for providing for your child and their best interests.

As in all divorce matters, it’s best when you can make decisions together for your children’s benefit. Once the court intervenes, both of you are bound by the judge’s decisions, whether you like them or not. 

Child custody and support are some of the most contentious parts of the divorce process. In this case, mediation may help. During mediation, you will work with a trained third party who will guide you toward an agreement that can work for everyone. 

Have more questions about mediation, medical costs after divorce, or divorce in general? Let us help. At Hello Divorce, we exist to help people navigate the divorce process in a different way from the lawyer-up model. Schedule a free call with us to learn more. 

Suggested: Do You Have Enough Insurance Now That You’re Divorced?