Health Insurance, COBRA, and Divorce
For many families, health insurance is obtained through the employment of one or both of the spouses. In most cases, the entire family, including both spouses and the children, have health insurance coverage through just one of the spouse’s employment. Many employers pay a portion of the health insurance premiums for part or all of the family’s coverage, helping to drastically reduce the out of pocket expense of health insurance coverage to the family. A divorce can have a major impact on health insurance coverage for one or both spouses.
Following a divorce, a spouse who has insurance through an employer can no longer provide health insurance benefits to the former spouse. This is because the former spouse is no longer a family member, which is required to include someone on a health insurance policy. There is no exception to this rule. A divorce court judge cannot order a health insurance plan to allow a spouse to keep his or her former spouse on the health insurance policy.
One solution to this problem could be for the spouse losing insurance coverage to continue to purchase cover under COBRA (Consolidated Omnibus Reconciliation Act). Under this law, a spouse who is about to lose his or her health insurance due to divorce is allowed to continue to purchase this coverage. The major downside is that under COBRA, even if an employer has been contributing to health insurance premiums during the parties’ marriage, the employer is not required to contribute to the divorced spouse’s health insurance premiums while he or she is purchasing the coverage under COBRA. In essence, the spouse losing coverage pays the full amount of the premium without the benefit of any assistance from the employer. This could mean that the cost of COBRA coverage may be prohibitively expensive. Moreover, the duration of availability of COBRA benefits is limited to thirty-six months following the divorce. The period for electing to continue coverage under COBRA is also limited, and a spouse losing coverage should pay close attention to the timelines provided in correspondence from the employer and the insurance company.
It should be noted that loss of health insurance by the spouse does not mean that the parties’ children will automatically lose health insurance coverage as well, even if the spouse losing coverage has sole custody of the children.
Health insurance is crucial to your family’s well-being, but divorce can make the issue even more complicated than usual. You need an experienced attorney to help you understand the process. with you and talk about options for health insurance and divorce. Call us today at (732) 529-6937 for an appointment.