How might divorce impact my health insurance?

Family Law - Health Insurance

Divorce is a highly stressful process that brings up many potential issues. One that causes particular uncertainty is health insurance, both during the divorce process and after the divorce is final.

A common question is whether your spouse can drop you from the employee health plan once one of you have filed for divorce. The answer to that, like many things, depends on the laws and policies of the state where you live.

For instance, some states may consider legal separation to be the equivalent of a divorce for health coverage purposes, in which case your spouse may in fact be able to take you off the policy.

Other states have laws that prevent one spouse from canceling the other spouse’s health insurance while the divorce is pending. In fact, in some states, once a spouse has filed for divorce, restraining orders go into effect barring either spouse from changing or canceling beneficiaries on any insurance policies, including health insurance, without official court approval.

In those instances, if your spouse tries to remove you, he or she may face legal consequences. A court may even declare that your spouse is responsible for all medical costs you’ve incurred since the time your coverage was wrongfully canceled and take those costs from your spouse’s share of the marital property and allocate it to you instead.

Another common question is whether, once the divorce is final, you can stay on your ex-spouse’s policy if he or she approves.

Generally, the answer is “no.” Most employer health plans allow only eligible dependents such as a spouse or a child to be covered. Once you’re divorced, you no longer meet those requirements. In such a case, you and your former spouse might be tempted to not inform the insurance company of your divorce, going about your business as usual instead. But that would be a huge mistake. The insurer would inevitably find out, and that could give it grounds to cancel the policy altogether and even accuse you of insurance fraud, which is a serious criminal offense.

An alternative in such a case may be to remain legally separated without actually getting a divorce, but that’s really something to discuss with a lawyer, since it could have disadvantages of its own.

Now let’s say you do go through with the divorce and you were previously on your spouse’s plan. Are you out of luck? Not necessarily.

For one thing, the federal Consolidated Omnibus Budget Reconciliation Act (commonly known as “COBRA”) mandates that an employer continue to provide health insurance for an employee’s former spouse for up to 36 months following the divorce.

COBRA, however, can be expensive, since the employee now has to pay both their share and the employer’s share of the premium (which a judge might then factor into how much spousal support to order a spouse to pay).

Another option is to join your own employer’s plan, assuming you have an employer that provides one. This may not be ideal. After all, there’s a reason you chose to be covered by your spouse’s plan instead. But it may still be the most affordable option.

If you can’t get coverage through your employer, then you might have to purchase insurance on the open market, potentially under the Affordable Care Act (commonly known as “Obamacare”). This could be pricey, but if you are the party who is at a financial disadvantage, it’s possible that a court might order your ex to pay your health insurance premiums as part of the financial settlement in your divorce.

Be aware, however, that this is just a general, broad overview. To truly understand your best options, you should set up an appointment with a family law attorney near you.

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