Divorce can have an immense impact on the lives of the families involved. When undergoing a divorce, parties tend to focus on the division of property, child custody, and many other complicated issues, but they often overlook the impact that a divorce can have on health insurance coverage. Health insurance can be an invaluable safety net under individual circumstances, whether those circumstances are foreseeable or not, and a lapse in coverage as a result of a divorce can have massive consequences. Below, this article will break down what happens to insurance during and after a divorce, as well as what divorcees can do to obtain their own health insurance following a divorce.
Health Insurance Coverage During a Divorce
Divorce can be an emotional and contentious process. Because divorce has a direct impact on the financial circumstances of those involved, it also has the potential to warp incentives and lead parties to take actions out of spite. Fortunately, California law provides a number of protections that seek to smooth the transition from married to divorced life. One of these protections is an automatic temporary restraining order that prevents either party from canceling or changing insurance policies amid a divorce. This rule ensures that each spouse will continue to have the same insurance coverage to which they are accustomed throughout the divorce process.
Notably, this restriction covers health, life, disability, and automobile insurance. The parties can agree to amend coverage during the divorce, but, generally speaking, at least one of the parties will have little incentive to do so.
Related: Child Custody Laws In California
Health Insurance Coverage After a Divorce
Although each spouse can expect stable insurance coverage during the divorce process, insurance coverage tends to change substantially immediately upon the completion of the divorce. The reason for this sudden change is that most insured Americans obtain their health insurance through a group insurance plan with their employer, and these plans typically cover the individual employee and their family. Upon a divorce, the former spouse is no longer family, and so insurance coverage generally cannot extend to the former spouse. Of course, children ordinarily remain covered.
Where to Obtain Health Insurance After a Divorce
There are many resources available for individuals seeking health insurance following a divorce. Below, this article will break down a general list of avenues that may help a recent divorcee obtain health insurance.
Federal COBRA Coverage
The Consolidated Omnibus Budget Reconciliation Act, or COBRA, allows eligible individuals to retain their pre-divorce coverage for some time following the divorce. Where the former spouse continues to work for a company with 20 or more employees, COBRA coverage can extend up to three years following a divorce. Where the former spouse continues to work for a company with fewer than 20 employees, COBRA coverage can only extend up to eighteen months following a divorce.
COBRA coverage requires the divorcee to pay substantial monthly premiums, resulting in three possible choices for the divorcee. First, they can opt into COBRA coverage and pay the premiums out of their own pocket. Second, they can opt into COBRA coverage and seek a court order that forces the insured spouse to pay the premium as part of the divorce settlement. Third, they can opt-out of COBRA coverage and either seek their own insurance or remain uninsured. The remainder of this article will discuss the different options available to help an individual obtain their own insurance.
Group Insurance with a New Employer
The most common way that people obtain insurance is through their employer’s group insurance plan. Full-time employers generally offer health insurance coverage as an ordinary employment benefit, and they pay for part (or even all) of the cost. If the divorcee’s employer provides such coverage, this is likely the simplest way to get back on a quality health insurance plan.
The Affordable Care Act
The Affordable Care Act (better known as the ACA or “ObamaCare”) provides affordable health insurance to individuals based on their individual needs. Click here for California’s ACA platform, where Californians can shop among the health insurance options best suited to their circumstances.
Medicare
Individuals over the age of 65 (or other individuals who have been on Social Security Disability Insurance, or SSDI, for more than two years) may be eligible for Medicare. Click here to find out more about how to enroll in Medicare.
Individual Coverage
If the other options are inaccessible, insufficient, or too expensive, then individuals may wish to seek out insurance providers directly so that they can obtain the health insurance coverage that they need.
F.A.Q.s
Q: Is it possible to retain health insurance coverage when separating from a spouse?
A: Where one spouse relies on the employment benefits of another for their health insurance, that spouse will no longer qualify for such coverage in the event of divorce. However, many couples choose to opt for a legal separation, rather than a divorce, so that they can retain certain benefits (including insurance coverage). Click here for more details on the distinction between divorce and legal separation.
Q: What about my children’s health insurance?
A: Generally, children can continue to rely on the health insurance plan through their other parent, even following a divorce.
Contact Pride Legal
If you or a loved one plans to undergo a divorce or legal separation, we invite you to contact us at Pride Legal for legal counseling or any further questions. To protect your rights, hire someone who understands them.
