With the high costs of medical expenses, health insurance is one of the most important assets you can have. If you are covered by your spouse’s insurance plan, and are going through a divorce, it is time to think about how that will affect your health-insurance coverage.
Unfortunately, coverage can be terminated immediately, leaving you uninsured. That can be scary to think about, so it is crucial to examine your health-insurance coverage before divorcing—to avert serious ramifications afterward.
1) Include Health-Insurance Coverage in the Divorce Settlement
Health-insurance coverage can be stipulated within the divorce decree. In most cases, this stipulation occurs when a spouse does not work outside of the home, and does not have instant access to this coverage.
Depending on the situation, you can ask the court to require your former spouse to pay for your health insurance as part of your spousal support. Making this request does not ensure that it will be granted, so it is best to seek legal advice and weigh your options.
2) Utilize COBRA
In the event that health insurance is not specified in the divorce decree, the spouse seeking coverage might be eligible for temporary coverage through his or her former spouse’s employer. The Consolidated Omnibus Budget Reconciliation Act (COBRA) was created to protect employees and their dependents from losing group-insurance coverage, due to job loss or divorce.
You may continue coverage for up to 36 months, at your own expense, if your former spouse maintained family-health coverage through his or her employer. But here is the catch: To apply for COBRA, the company must employ 20 or more people, and cover the entire amount of the premium (plus a surcharge).
The end result can total 102% of the group rate. If COBRA is the best option for you, be advised that you must adhere to the 60-Day Rule. If you do not apply for COBRA within 60 days after becoming divorced, you will not be eligible.
3) Obtain Your Own Coverage
If you are currently working, talk to your employer about obtaining health insurance through them. Federal law mandates that any person who has lost access to former health-insurance coverage can enroll in a current employer’s health-insurance plan—even if it does not fall within the annual open-enrollment period.
If you do not have an employer who offers health-insurance coverage, or if you are currently not working, private plans can be less costly (and more permanent) than COBRA coverage. When seeking coverage, take some time to research the cost of premiums, deductibles, co-payments, and out-of-pocket expenses, and find the best plan that fits your needs.
Before terminating a marriage, there are many aspects to consider. Health-insurance coverage is not an area that should be taken lightly. You do not want to be left scrambling for coverage after the divorce has already been finalized. Be proactive, and consider all of your options before a divorce.
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