Divorce and Health Insurance

One of the biggest concerns in marital breakups is what effect divorce has on health insurance — and with good reason. Most times, couples have health insurance through one spouse’s employer; upon dissolution of the marriage, as the dependent spouse is no longer a family member, that spouse will lose his or her health insurance.

So what happens next? Generally, the spouse losing health insurance has five options:

1. Get insurance through your employer.

If you are working, you should investigate the health insurance plan offered by your employer.

2. Apply for COBRA benefits.

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law intended to protect people from the loss of health insurance coverage in the even of death, divorce, unemployment, etc. It can be extremely expensive, however, and the cost is not picked up by the employer. COBRA coverage also has a time limit depending on how big the employer is.

You can compare the costs and benefits of your own employer’s plan and COBRA to determine which is better for you.

3. Include health insurance in the divorce settlement.

You might push your divorce lawyer to see whether your ex-spouse and court will agree to have your ex-spouse pay the COBRA payments or other health insurance costs for a period of time.

4. Put off the divorce in favor of legal separation.

Legal separation is permitted in some states and may be a good option for those who would like to stay on the same health insurance plan but no longer live together. You can agree that one party will file for divorce in a year, two years, etc., and in the meantime, issues like custody, child support, property division and others are dealt with in a separation agreement.

5. Buy an individual health benefits plan.

This involves your shopping around for your own health insurance; be sure to get quotes from various companies, and again, if you can get it in your settlement that your ex-spouse will have to pay premiums, all the better.

Either way, you should know how much this would cost and be prepared to present this information to the court as it will be considered as part of the overall financial structure of the divorce.