In the long list of financial and logistical challenges that come along with divorce, you may not immediately think of health insurance coverage. Though often taken for granted or forgotten in the emotional whirlwind, health insurance becomes a pressing concern. Anticipating this issue and understanding how your divorce can affect your healthcare benefits is crucial for maintaining continuous coverage and avoiding costly and frightening gaps in protection.
While a divorce is in the works, the employed spouse’s health insurance plan generally covers both parties, but that all ends once the divorce is finalized. The non-employee spouse almost always loses their eligibility for coverage under their ex-spouse’s employer-sponsored plan within 30-60 days of the final divorce decree, though the specifics depend on the insurance provider’s policies.
The good news is that there is a temporary safety net for divorced spouses who find themselves in this position. COBRA, or the Consolidated Omnibus Budget Reconciliation Act, allows you to continue your ex-spouse’s employer-sponsored health insurance for up to 36 months. Though you’ll have to pay the full premium plus a 2% administrative fee, this coverage prevents gaps and continues your access to your current doctors and medications during the transition period.
The three years that COBRA can last allows you to explore several alternatives that exist for post-divorce health insurance. If you’re employed, you may qualify for your employer’s group health plan during the next open enrollment period or through a qualifying life event exception, and the Health Insurance Marketplace offers individual plans with potential subsidies based on your income. Medicaid may also be an option if your post-divorce income falls within its eligibility guidelines.
The best thing you can do to protect yourself and minimize your expenses is to start researching insurance options early in the divorce process rather than waiting until your coverage is dropped. Compare costs, networks, and benefits across the different plans, and consider how divorce will affect your income and whether you’ll qualify for marketplace subsidies. If you take medicine regularly or have ongoing health conditions, make sure that your preferred providers and prescriptions are covered under any new plans you’re thinking of switching to.
It’s also a good idea, and a smart strategy, to factor health insurance costs into divorce settlement negotiations. Some divorce agreements include provisions for the employed spouse to continue coverage for a specified period or to contribute to the ex-spouse’s insurance premiums. To give yourself greater leverage during these negotiations, document all your current medical needs and estimated annual healthcare costs.
Being proactive in every aspect of your divorce planning is the best way to ensure financial stability. For information on how our experienced divorce attorneys can help, call us today.