Divorce has a big effect on whether or not you can get health insurance benefits. Find out how to get the most out of your health insurance after a divorce.
When people get divorced, their health insurance benefits get very complicated. Many families have health insurance for the whole family that is paid for or provided by their employer. It's not unusual for one spouse to be a stay-at-home parent with no access to health insurance benefits, or for the other spouse to work at a job with either no health insurance benefits or benefits that cost a lot. After a divorce, the parent whose health insurance covers the whole family can't cover the other parent anymore. They are no longer "family" members who can get health insurance through the same plan. Then, figuring out how to make sure everyone stays insured becomes a point of negotiation and/or divorce court.
If neither person has health insurance benefits and it would be too expensive for the other person to get health insurance benefits after the divorce, there is a way to keep the benefits without spending more money. One way to do this is to sign a separation agreement but put off getting a divorce. So, even though they are no longer living together, they are still married and can stay on the same health insurance plan. Before either of them files for a divorce, they can agree to wait one, two, or more years. Even though they will still be married, their property, child custody, and child support will be dealt with in their separation agreement. In some situations, this is the best way to solve the problem. For example, what if both people want one partner to stay at home with young children for a few more years, but they still want to split up and get a divorce? This choice is good for them. They can split up, agree to get a divorce and all the terms they need to agree on, but put off the final divorce so they can keep their health insurance benefits that are more affordable.
The above example can cause problems that you need to talk about in detail with your divorce lawyer. For example, if you live apart but don't get a divorce, this could change how you file your federal taxes. Also, enforcing a separation agreement is not as easy in some states as it is in others. Or, in some states, one spouse can take advantage of the benefits of the agreement for a year or two and then go to court to ask for something totally different when they get a divorce. You can only get advice on these things from a divorce lawyer who is licenced to work in your state.
COBRA coverage is another option for people who get divorced. COBRA is a federal law that says a person with health insurance must be allowed to keep that coverage at their own cost for a certain amount of time if certain conditions are met. For example, if you get a divorce and your spouse's employer provided family health insurance, the employer would have to give you COBRA coverage after the divorce. That COBRA coverage would require you to keep the same health insurance plan, but your coverage would now be for just you and not for your whole family. For that individual policy, you would have to pay what the employer paid for it.
It's not unusual for a stay-at-home spouse or a spouse with fewer job options or less income to get COBRA coverage and negotiate that their ex-spouse pay for that coverage for a certain amount of time after the divorce. This gives the spouse who didn't have coverage time to either get a job that offers coverage or get their finances in order so they can pay for their own coverage.
