How Does Divorce Affect Your Health Insurance?

Health insurance coverage is an item you may not realize will be impacted in the event you get divorced. If you are currently receiving healthcare insurance as a dependent on your spouse’s policy, your coverage will end once your divorce is finalized. Why? Because after your divorce, you will no longer be considered a “dependent” in the legal sense and, therefore, will no longer be eligible for coverage through your ex-spouse’s health care plan.

This fact comes as a surprise to many, and as difficult as the transition might be, the good news is that there are several options to help mitigate the hardship after your divorce.
 

Legal Separation

Currently, federal law dictates that your health insurance coverage ends (if you are the dependent spouse) when your divorce is finalized. However, in the state of California, if you and your spouse opt for a legal separation instead of getting divorced, your ex is allowed to keep you on their healthcare plan.

Keep in mind that, while a legal separation shares many similarities with a divorce, it’s not the same thing. If you aren’t sure which option is better for you, consider speaking with an experienced divorce attorney first before making a final decision.

COBRA

COBRA stands for Consolidated Omnibus Budget Reconciliation Act. In short, COBRA is a health insurance program that allows eligible employees and their dependents to continue receiving health care coverage in the event that the employee loses their job or experiences a reduction in hours.

In the case of divorce, you may be able to retain your healthcare insurance for up to thirty-six months following your divorce. To qualify for COBRA, your spouse’s company must employ at least twenty people, and health care must be an existing benefit the employer currently offers.

While it sounds like a win-win scenario, the major drawback to COBRA is that it is typically quite expensive, sometimes prohibitively so. Ask your divorce attorney if COBRA premiums can and/or will be covered in your divorce settlement.
 

Covered California & Medi-Cal

Covered California and Medi-Cal are the state-run insurance marketplace and Medicaid program, respectively. Together, they offer a wide range of insurance options at all different price points, from high-tier expensive plans to low-cost and free insurance for those who qualify.

If you anticipate being unemployed or under-employed for a significant period of time after your divorce, these programs are almost certainly your best bet.
 

Your Children Will Not Lose Their Coverage

The good news is that, even if you lose your insurance coverage as a result of your divorce, your children’s coverage (assuming your ex-spouse’s healthcare plan covers them) will not be impacted in any way.

Your children will remain legal dependents until they turn eighteen and are covered as long as you and/or your spouse has a job that provides health insurance coverage.

To learn more about how your divorce will impact your health insurance, please contact our offices today for a free consultation.