Insurance and Divorce
As part of a married couple, you may have been covered by your
spouse's health plan. If so, you may be worried that because your marriage is
ending, your health insurance coverage will be ending too. And, if you have
children, how will they be protected? Fortunately, laws exist that protect your
rights and the rights of your children, so your options may not be as limited as
you might think.
Health insurance coverage options for you
In general, when your marriage ends, there are four
ways for you to get health insurance coverage:
Continue your health insurance temporarily through COBRA
The Consolidated Omnibus Reconciliation Act of 1986 (COBRA) is a federal law
designed to protect employees and their dependents from losing coverage as a
result of job loss or divorce. If your former spouse maintained family health
coverage through work (and works for a company with at least 20 employees), you
may continue this group coverage for up to 36 months after the divorce or legal
separation. You will have to pay for this coverage, however. COBRA coverage will
terminate sooner than 36 months if you remarry or obtain coverage under another
group health plan.
Because individual policies are often more expensive than
group policies, COBRA coverage is certainly attractive. If you decide to
exercise your COBRA rights, your cost of continuing coverage cannot exceed 102
percent of the employer's cost for the insurance. Additionally, you have the
right to pay the premiums in monthly installments.
Ask for health insurance coverage as part of your divorce
When you are negotiating a divorce settlement, ask that your spouse be required
to maintain health insurance coverage for you. This may not work if you can
easily get health insurance coverage through your own employer. But if you're an
older homemaker or self employed without access to employer-sponsored health
coverage, you have a better chance of receiving this as part of your settlement.
Otherwise, when the COBRA coverage terminates after 36 months, you may be denied
health insurance if your health is poor (although federal law provides
protections for certain pre-existing medical conditions).
Get coverage through your own employer
If you work and your employer offers health insurance coverage, sign up for it.
Unless your spouse is paying for your health insurance coverage as part of your
divorce settlement, this is probably the least expensive way for you to get
Purchase an individual health insurance policy
In some cases, this may be your only option, especially after your right to
insurance under COBRA ends. However, you'll have to pay the premiums for your
own health insurance, try to compensate for this in your divorce settlement.
Providing health insurance for your children
When you are divorcing and you have children, you have to decide whether you or
your soon-to-be former spouse will be responsible for providing health insurance
for your children. This issue should be addressed in the child support section
of your divorce agreement.
If both parents have health insurance through work, the
simplest way to decide is to consider which plan offers the best coverage and
insure the children under it. However, because this type of insurance can be
expensive and emotions can run high during divorce negotiations, this point is
rarely decided so easily.
Noncustodial parents sometimes assume that they won't be
responsible for insuring the children because they don't care for them on a
daily basis. Under federal law, a custodial parent can obtain a Qualified
Medical Child Support Order (QMCSO), if necessary, in order to get health
insurance coverage for the children through the noncustodial parent's group
health insurance plan.
The children cannot be denied coverage by the noncustodial
parent, that parent's employer, or that parent's insurance company based on any
of the following reasons:
- the child does not live with the noncustodial parent
- the child is not claimed as a dependent on the noncustodial
parent's federal income tax return
- the child lives outside of the plan's service area
Along with covering an employee's child under an
employer-sponsored health care plan, a QMCSO can require that:
- the premium be deducted from the employee's paycheck
- insurance reimbursements be made directly to the
nonemployee parent (if that parent pays the provider)
- the nonemployee parent be given information if requested
regarding the health care plan and reimbursements