What Every Divorcee Should Know about Temporary Health Insurance Coverage

In the aftermath of your divorce, navigating the health-insurance marketplace can be tricky. To maintain your coverage, you should be certain that you understand what your options are—even if you received your previous coverage through your spouse’s employer. If you have not decided what the right option will be for your long-term healthcare coverage, you might want to consider utilizing COBRA insurance (if you are eligible).

Many people do not realize how important COBRA can be for maintaining coverage. In order to clarify a few of the finer details surrounding this type of temporary coverage, we are going to dive into its eligibility requirements and disadvantages.

Do you qualify?

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law designed to protect employees from having a gap in coverage—due to unemployment or (in some circumstances) the dissolution of a marriage. When one spouse has been the primary health-insurance carrier for both spouses, the disadvantaged spouse may be able to apply for coverage through COBRA—if health insurance is otherwise omitted from the details of your divorce settlement.

What are the eligibility requirements? First, your spouse’s company must employ twenty or more workers. If they are employed by a smaller company, there is the possibility that you will still qualify, but it is dependent on the laws of your state. This type of coverage (called mini-COBRA) has varying rules for eligibility, so be sure to check your state’s laws.

You have to be quick about deciding whether or not you wish to apply for COBRA coverage. If you do not notify the health insurance company within sixty days of the finalization of your divorce, you will not be eligible for temporary coverage.

COBRA coverage can give you a little breathing room. Then you can figure out what comes next in your newly single life. After your divorce is finalized, take some time to research the various health insurance options that are available to you.

COBRA coverage is probably more expensive than you expect.

While temporary healthcare coverage through COBRA may be a great solution for you in the short-term aftermath of your divorce, keep in mind that it will only last for a set period of time. Following the end of your marriage, you are eligible for up to 36 months, which may sound like a long time. However, the cost may be more than you are expecting.

When your spouse’s employer is no longer paying a portion of your health insurance costs, that monthly premium can seem significantly higher. COBRA requires that you pay the full premium, as well as a 2% service charge. After all is said and done, you will be paying for 102% of your healthcare coverage. If your newly single income is already lower than you are accustomed to, this option may not be financially feasible for you.

In addition, you may qualify for a special enrollment period. Under the Affordable Care Act, that would allow you to apply for coverage through your state’s health insurance exchange. If your income has decreased significantly, you may even qualify for a subsidy or tax credit, which would help you cover the cost of your health insurance. According to the Health Insurance Marketplace, in the last year, one in six individuals has qualified for health insurance that was under $100.

In the midst of the emotional turmoil of finalizing your divorce, maintaining your health insurance may be the furthest thing from your mind. However, you will not want to forget to file for COBRA within the mandatory sixty days if you have yet to find another solution. As you work on obtaining a more permanent form of health insurance, COBRA coverage may be the best choice for you, at least for a period of time.

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