How Divorce Affects Health Insurance

In the event of divorce, it is likely that if you had insurance coverage under your spouse’s plan, you will lose these benefits, whether it is through their employer or their own personal plan.

Once the divorce is finalized, you will need to purchase insurance coverage for yourself and your children, if applicable. It is important that you take care of this immediately so that there is no gap in coverage.

The Consolidated Omnibus Budget Reconciliation Act, also known as COBRA, is a federal law that requires most employers with group health benefits to offer terminated employees and the divorced spouses of current employees the opportunity to purchase health insurance. This means that if your spouse works for a company that employs more than 20 people, you may be eligible to apply for continued health insurance coverage in their employer’s plan. Even if the company has fewer than 20 employees, you may still be eligible for coverage.

You may receive this coverage for up to 36 months. Once you are divorced, your former spouse must notify their employer of the new changes, and from there the employer has 30 days to notify you of your right to coverage. You will then have 60 days to decide if you want the coverage, and if you choose coverage you must pay from the date of the notice in order to have retroactive coverage.

If you do not elect coverage, you should look into alternate coverage to have within the 60-day period in order to avoid any gaps where you are not covered.

If you choose to have coverage through the employer of your former spouse, you must pay the entire amount of the premium (and you may be charged 102% of the group rate).

Because of this high cost, you may find that getting coverage through your own employer is more affordable. If you are unable to do this, COBRA may be your only choice.

Before making the final decision to choose COBRA coverage, look at all other options and compare coverage and costs. You may find less expensive options that provide more permanent coverage.

For more information on how divorce can impact your health insurance coverage, visit www.sampair.com for assistance from our Surprise divorce attorneys at The Sampair Group.