Divorce

How Will Divorce Affect My Health Insurance Coverage?

Divorce is a challenging life event, filled with emotional and practical concerns. While many people prepare for changes in their living arrangements, finances, or parenting roles, health insurance—a critical aspect of your well-being—can often be overlooked. State Farm reports that more than two-thirds of married couples share the same health insurance plan. As a result, divorce often significantly impacts one spouse’s coverage.

At SLG Family Law, we’ve spent years helping individuals like you prepare for life after divorce, including navigating changes in health insurance coverage. To help you prepare, we’ve put together a post outlining the key considerations and options available to you.

Health Insurance After Divorce: What Happens Immediately?

The termination of shared health insurance is one of the immediate impacts of divorce. For spouses covered under a policyholder’s employer-sponsored plan, you will still be covered during the divorce process. However, once the divorce is finalized, it marks the end of being recognized as a dependent – you can no longer remain on the policy after the divorce is official. This shift can leave the non-policyholder suddenly uninsured and responsible for finding their own coverage.

It’s crucial to address this issue early during divorce proceedings. Failing to plan can leave you scrambling for coverage, creating unnecessary stress during an already difficult time.

Understanding Your Options

COBRA as a Temporary Solution

If your former spouse’s health insurance plan was provided through their employer, COBRA (Consolidated Omnibus Budget Reconciliation Act) might be an option. COBRA allows you to temporarily continue coverage under the existing plan after a divorce.

 Pros of COBRA

• You have 60 days to decide whether to opt in, allowing you to explore other options.
• Coverage can last up to 36 months, offering a buffer period while you explore permanent solutions.

Cons of COBRA

• COBRA can be very expensive. You’ll be responsible for the full cost of the premium, including the portion your spouse’s employer previously covered, plus up to 2% in administrative fees.

While COBRA is simple and doesn’t require changing plans or providers, it’s often not the most cost-effective option in the long term. It’s worth exploring alternatives.

Employer-Sponsored Health Insurance

For those employed, transitioning to your own employer-sponsored plan could be a practical solution. If your employer offers health insurance, this may be one of the most cost-efficient options.

Benefits of Employer-Sponsored Coverage :

• Employers typically share a significant portion of the cost, making it more affordable than individual plans.
• Coverage under employer plans often provides access to robust networks of providers.

To activate coverage, ensure you notify your HR department of your change in status to enroll during the special enrollment period triggered by your divorce.

The Affordable Care Act (ACA) Marketplace

If you don’t qualify for an employer-sponsored plan, the ACA Health Insurance Marketplace is an accessible option. The ACA provides comprehensive, individual coverage options tailored to your budget and needs.

Key Benefits of ACA Plans

• ACA plans cover essential health benefits, including hospital care, prescription medications, and mental health services.
• Subsidies are available to lower-income individuals and families, which can make premiums more affordable.
• No exclusions for preexisting conditions, ensuring inclusive coverage.

Start by exploring plans on Healthcare.gov or your state’s marketplace to find the best policy for your specific needs.

Medicaid for Eligible Individuals

If you’re concerned about affordability, Medicaid may be an option. Medicaid provides low-cost or free health insurance to eligible individuals, especially those with limited income. Contact your state’s Medicaid office to determine eligibility and apply.

Private Individual Health Insurance

Another option is purchasing a private individual health insurance plan. While this may be more expensive than employer-provided or ACA plans, it offers the benefit of personalization and flexibility in selecting coverage options that fit your needs. You can also explore plans through online brokers or by contacting insurance companies directly. Additionally, during a divorce, you may be able to seek spousal support to help cover the costs of this private health insurance.

How Will Your Children Be Affected?

Children are not impacted in the same way as adults during divorce. They can usually remain on the existing health insurance plan post-divorce.

Options for Coverage:

• Children can stay on their parent’s current plan.
• They can switch to the other parent’s employer-sponsored plan if it offers better benefits.
• Some families may opt for dual coverage, where the child is enrolled in both parents’ plans. In this case, the primary plan covers medical expenses first, and the secondary plan covers any remaining costs.

Discussing these options with your former spouse to determine the best coverage approach for your children is essential.

The Bottom Line

Divorce can have a significant impact on health insurance coverage for both spouses and their children. Planning and exploring all available options is essential to ensure you and your family remain covered during and after divorce. Meet with a family law attorney or financial advisor if you need further guidance in navigating the complexities of health insurance post-divorce.

As you navigate changes in your personal life, you don’t have to do it alone. At SLG Family Law, our team of experienced attorneys is here to support you and help you prepare for a successful future post-divorce. Contact us today to schedule a consultation. Remember, your health insurance coverage may change after divorce, but with proper planning and guidance, you can adjust confidently.