Marriage is a complex financial arrangement in which both parties pool assets and liabilities. In many cases, the situation can become even more complicated if the marriage is dissolved. A divorce involves a distribution of property and financial responsibilities that can be difficult for any normal person to understand. While the personal and financial fallout from an ended marriage can be overwhelming, you must still do your best to try to pick up the pieces and move on with your life.
One of the last considerations during a divorce is often health insurance, but it probably shouldn’t be. Not only can a medical emergency strike at any time but losing your health coverage unexpectedly can make it difficult to join another health plan. In certain circumstances, if you let your health plan lapse and don’t take timely action, you may lose access to some health coverage options. So, understanding your health insurance policy and available options should be a priority during your divorce.
How Your Divorce Decree Affects Your Coverage
How your divorce is ordered by the court can impact your health coverage status. In some states, the divorce court may require that the spouse keep you on their health insurance policy even after the marriage has been dissolved. There may be limits to this, e.g. Massachusetts law terminates this eligibility upon the dependent spouse’s remarriage. Check with your state or a divorce attorney to learn how your state’s laws may apply to your case.
If the court does not require that your spouse keep you on their plan, your spouse must notify his or her insurer within 30 days that you will no longer be on that plan. In most cases, this notification will immediately terminate your health coverage, but some insurers will allow you to remain on the plan through the end of the month. If you are the spouse providing health insurance, you will want to alert your insurer as soon as possible because it may lower your monthly premium.
Joining an Employer Plan
If you are losing health coverage because you were covered through your spouse’s plan, then the first option you should explore is insurance sponsored by your employer. Employer health plans are usually open for enrollment during the first 30 days following hiring, or a one to two-week annual enrollment period.
However, employer health plans must be available to employees who undergo a major life event which includes a divorce and loss of spousal health coverage. However, you must act within 30 days of losing coverage. If you miss your employer’s deadline, then you will probably have to wait until the next annual open enrollment period.
If you are not familiar with Consolidated Omnibus Budget Reconciliation Act of 1985 or COBRA, it is a law that has special importance for newly divorced people. COBRA is a federal law that allows qualified Americans to continue their health coverage if it is unexpectedly canceled. One of the situations that is covered under COBRA is divorce from a spouse providing health insurance.
You should know that you only have 14 days after your divorce to provide notice to your spouse’s insurer of your COBRA eligibility. You do, however, have up to 60 days to decide if you actually want to remain on your spouse’s health plan via COBRA eligibility. If you do want stay on your ex’s plan, then you must make your first premium payment within 45 days.
If you desire to exercise COBRA coverage to remain on your spouse’s employee health plan, you should know that it may cost you more than you might expect. Although COBRA allows you to obtain coverage through your spouse’s employee plan for up to 36 months, your spouse’s employer does not have to subsidize the plan for you as he does for his employees. That means that you will have to pay the full premium as well as administrative fees.
Private Insurance Options
Should you elect to not remain on your spouse’s plan or enroll with your own employer’s health plan, then you may want to consider a private health plan sponsored by the Affordable Care Act, more commonly known as Obamacare. You can find these plans on your state or federal health insurance marketplaces.
You will need to complete the online application to determine if you qualify for the federal tax credits. Generally, if you earn between 100 and 400 percent of the federal poverty level, you are eligible for hundreds of dollars in premium discounts every month. You may apply these credits to any health plans found on the Obamacare exchanges.
Although Obamacare plans also have an annual open enrollment period, you qualify for a special enrollment period if you lost your health coverage due to a life changing event like a divorce. You have 60 days following your divorce to apply and enroll in an Obamacare health plan.
If you meet certain eligibility requirements, you may be able to enroll in a governmental insurance program. If you are approaching 65 and have paid into Social Security (or have a spouse who made Social Security payments), you may qualify for Medicare. Although most Americans only become eligible for Medicare upon their 65th birthday, if you have been receiving Social Security disability payments for at least two years, you may qualify for Medicare at an earlier age.
If you make an income that is less than the federal poverty level, then you may be eligible for another government program called Medicaid. In some states you may qualify for Medicaid even if you make slightly more than the poverty threshold. Medicaid is also available to Americans who are disabled or pregnant. Some states may require that you be employed, look for employment or enroll in a secondary school to enroll in Medicaid. To learn what the eligibility requirements are in your state, check with your state Medicaid program.
If you would like to learn more about your health insurance options for newly divorced, please visit Boost Health Insurance.