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What are My Health Insurance Options Following a Divorce?

If ex-spouses are considering divorce, health insurance may become an important topic of discussion. One spouse may have an employer-based health insurance plan and will no longer want to cover their ex-spouse on that plan. In some states, as soon as a couple is legally separated, they no longer need to cover the other spouse. However, in other states, it is illegal to drop coverage while a divorce is in progress. Under federal law, a dependent spouse needs to find their own insurance upon divorce.

Parents may also be concerned about their children’s health care coverage amid a divorce. Those children will continue to be covered by health insurance under the family plan. However, the dependent spouse will no longer be considered a family member. In a contentious divorce, the spouse with insurance may be looking to drop the dependent spouse from the plan as soon as possible. Therefore, seeking the guidance of a divorce lawyer may be necessary.

Which Options are Available?

There are multiple health insurance options for a divorcing spouse, including the following:

COBRA: A dependent spouse may consider COBRA insurance benefits. Once the health insurance policy is terminated, the dependent spouse must apply for coverage, usually within 60 days. These benefits are available up to 36 months, depending on the circumstances. The dependent spouse will then have to pay the entire cost of the policy.

Employer: A dependent spouse may be eligible to sign up for health care coverage through their own employer.

Obamacare: With Obamacare, divorce serves as a qualifying life event, which allows a dependent spouse to enroll in this lower-cost health insurance program outside the open enrollment period for 60 days. After the 60-day grace period, the dependent spouse will have to wait until the regular open enrollment period to sign up for a health insurance plan at the end of the year. Keep in mind that the levels of the plans available, which range from Bronze to Platinum, do not correspond to the type of coverage one receives, but how the costs are divided.

What Should I Consider When Looking for a New Health Care Plan?

The following should be considered when looking for a new health care plan:

  • Network: If the dependent spouse has been seeing a particular physician for some time, they may want to make sure their new health care plan includes that physician in their network.
  • Deductible: A deductible is the amount that is paid out-of-pocket until the insurance company begins paying for the medical care. Deductibles can range in price and finding the most affordable one is important.
  • Possible penalties: Not carrying health care can pose significant fines during tax season. However, certain states got rid of this stipulation in 2019.

What If I am Separated but Not Divorced?

In more amicable separations, when the dependent spouse cannot find affordable health insurance, couples may enter into an agreement, but delay the divorce. Since the couple is still married, they can stay on the same insurance plan, even if separated. Only until the divorce is final can one spouse remove the other from the health care policy. This method can work if both parties agree to it, ensuring the dependent spouse’s medical needs will be covered.

Divorce From Bed and Board

Since there is no legal separation in New Jersey, there is an option of divorce from bed and board, also called a limited divorce. The couples are not legally divorce, but the couples end the financial aspects of their marriage. Essentially, any property that one spouse acquires once the limited divorce is finalized will be considered their separate property and will not be subject to any division.

Because couples are technically still married after a divorce from bed and board, the dependent spouse can usually continue coverage under the employed spouse’s policy. In some cases, it may make sense for a couple to agree to a divorce from bed and board for a limited period of time to allow the dependent spouse a chance to find a job with health benefits, or to reach the age of eligibility for Medicare. Before assuming that you would be able to take advantage of this option, however, be sure to check the terms of your health insurance policy. If your policy states that “legal separation” is a qualifying event requiring removal of a spouse from coverage, you will need to consult with an attorney regarding the potential effect of the divorce from bed and board.

The New Jersey Divorce Lawyers at Burnham Douglass Help Divorcing Clients with Financial Concerns.

Divorce is one of the most difficult processes a person can go through. Beyond the emotional damage, there are many important items to consider, and health insurance is certainly one of them. If you have a financial concern regarding the divorce process, the New Jersey divorce lawyers at Burnham Douglass can help. Call 856-751-5505 or contact us online today for a free consultation. Located in Marlton and Northfield, New Jersey, we serve clients throughout New Jersey, including Camden County, Burlington County, Atlantic County, Gloucester County, Salem County and Mercer County.

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