Who Pays for Health Insurance After Divorce?
A divorce can take a lot away from you, including your health insurance. With emotions and tensions running high, spouses often fail to discuss their health insurance policies early on in the process. As such, we encourage you and your spouse to have this critical conversation sooner rather than later.
Typically, a working spouse maintains their family’s coverage under a group or employer policy. But when a divorce arises, you may wonder whether or not your spouse can take you and your children off their policy completely. In short, eligible children often remain covered under their working parent’s health insurance policy, as they should, but dependent spouses do not.
So, who pays for health insurance once a divorce is finalized? Simply put, each spouse is usually required to secure their own health insurance coverage after divorce. Unless a divorce settlement states otherwise, covered employees are responsible for notifying their plan administrator of the divorce within 60 days of their judgment of dissolution.
As a result, former spouses who were once beneficiaries under their ex-spouse’s policy must secure alternate coverage after divorce. A common way for a once-dependent spouse to receive continuation coverage through their working ex-spouse’s plan is through the Consolidated Omnibus Budget Reconciliation Act (COBRA).
How Does the COBRA Insurance Work?
COBRA is a federal program that gives eligible workers and their families who lost health benefits the ability to receive continued coverage under their group health plan for a certain period of time. Employers with 20 or more employees are generally required to provide continuation coverage, which is a temporary extension of health coverage, to qualified individuals who otherwise wouldn’t receive these benefits because of their circumstances, such as divorce.
After divorce, qualified former spouses are typically required to pay the entire premium coverage up to 102% of the cost. Coverage can extend up to 3 years after the divorce is finalized.
As you can see, COBRA has pros and cons. It provides extended coverage to qualified people for up to 3 years but costs a pretty penny. That’s why dependent spouses are encouraged to make the necessary arrangements to secure alternate coverage right away. Again, the terms in a divorce settlement may require an employee spouse to cover their former spouse and children for a certain amount of time. But if that’s not the case in your situation, you should explore your policy options to best avoid paying 102% of the applicable premium under your ex-spouse’s plan.
Can You Remove Your Spouse from Health Insurance Before the Divorce is Final?
Most health insurance plans prohibit former spouses from receiving benefits. As such, you will likely get “kicked off” your soon-to-be ex-spouse’s policy once the divorce is FINALIZED. On that note, your spouse can only remove you from their plan when the final divorce judgment is entered. They are not allowed to terminate your coverage DURING the divorce process.
To ensure this, family court judges often impose court orders prohibiting both parties from taking certain actions, including canceling certain health insurance benefits or terminating the other spouse as a beneficiary altogether. These orders are called Automatic Temporary restraining Orders (ATROs).
Who Can Help Me Maintain My Health Insurance Coverage?
Communication is key in a divorce. Regardless of whether your divorce is contested or uncontested, you must prioritize your health insurance policy to best avoid gaps in coverage. An experienced family lawyer can help you navigate your options and formulate a clear path for you to follow, whether you want to terminate your dependent spouse from your plan or secure continued coverage under COBRA.
Our Columbia family attorney can answer your questions and address your concerns during a consultation. To schedule an appointment, contact us at (803) 938-4952!