What Happens With Your Health Insurance After Divorce

Aside from being an incredibly emotionally stressful time in someone’s life, divorce is also incredibly complicated in terms of the legal and financial considerations it brings on. There are so many aspects to divorce to consider it is unsurprising that many are overlooked. One commonly overlooked facet to a divorce that involves a non-working spouse is the question of health coverage: If you were receiving health insurance benefits through your spouse’s employer-provided health coverage, you must act quickly if you are to continue those benefits in the short term during and after a divorce.

Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), a qualifying event such as divorce which causes a loss of health coverage allows the qualified beneficiary – the non-working spouse – to maintain their coverage through the group plan. COBRA is a Federal law and only applies to businesses with more than 20 employees; for smaller businesses State law prevails, but this is usually very similar.

In order to maintain health benefits in the case of divorce, you must send notice of your divorce decree to the plan administrator or Human Resources department within 60 days. Once received, a notice will be sent to the beneficiary within 14 days. Under most state law they then have 30 days to secure their coverage based on the notice information, and under Federal law they have 60 days. It is absolutely crucial that claims be made within that time period. Failure to make this claim can be interpreted as waiving your right to coverage.

Once the claim is made and processed, most state and Federal law allow the beneficiary to keep their coverage for up to 3 years at a cost of 102% of the premium, with heavy cost increases if the coverage also involves children. COBRA and similar state programs are designed to ensure coverage, not to ensure economical coverage, and are usually utilized as short-term solutions. Few people maintain COBRA coverage for the full three-year period they are allowed to do so. Instead, COBRA is designed to maintain coverage while alternatives are explored and chosen.

Knowing all of your rights and options before, during and after a divorce is essential. Many people in a marriage leave certain duties to their spouse, such as balancing the checkbook, paying bills, or maintaining health insurance coverage and are at a loss when suddenly they must look out for themselves. Expert advice from an attorney with mediation experience is crucial in informing individuals of the resources and services available to them even as their legal partnership is dissolved. 

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