Can you Stay on Health Insurance After Divorce?
In a perfect world, your soon-to-be ex would help pay your healthcare premiums for a while after your divorce to keep you covered. In reality, however, if your settlement doesn’t include these arrangements, you’ll be out of luck because your spouse’s company will drop you from their health insurance plan as soon as the divorce is finalized.
So, it’s best to research your options and take control of your healthcare coverage ASAP. Below are a few options you may have for health insurance after divorce.
A divorce can leave you without your spouse’s company health insurance plan. However, you will be eligible for COBRA health insurance coverage for up to 18 or 36 months depending on the circumstances, just like an employee who loses coverage. To qualify for COBRA, your ex must work for a company with 20 or more employees. That said, most states have “mini-COBRA” (state continuation) opportunities for small businesses with under 20 employees.
Once your current health insurance policy is terminated, you must apply for COBRA coverage within 60 days of your divorce to retain coverage under your existing plan, but separate from your ex-spouse. Under COBRA, you have to pay the entire cost of the health insurance policy and will not receive any contributions toward the premiums from your ex’s employer as you likely did in the past.
COBRA sounds appealing if you’ve accumulated significant medical expenses because you won’t have to obtain a new plan and pay new out-of-pocket policies. That said, COBRA can be the most expensive healthcare plan option, which is why it’s important to price shop health insurance rather than take this route without researching.
Employer Health Insurance Plan
If you are eligible for health insurance through your own employer, talk to your human resources department about your options. This can be more cost efficient than COBRA and may keep you out of your ex’s company plan. Although you generally have to join employer health insurance plans at certain times of the year, losing your previous coverage due to a divorce provides you a special enrollment period to sign up for your employer’s plan, which we discuss below.
ACA / Obamacare Health Plan
Even if you have employer health insurance coverage available, you are eligible for Obamacare health insurance on the either state exchange (run by your state or the federal government) or outside the exchange. If you have employer coverage, however, you likely wouldn’t receive a subsidy to offset the cost of an individual market plan. You have 60 days following your divorce to get coverage during what is known as a Special Enrollment Period. After the 60 days pass, you must wait until the regular open enrollment period begins to sign up for a health insurance plan. The regular enrollment period typically runs at the end of the year.
Shopping for a health insurance plan on your own for the first time can feel overwhelming, but if you remember the following 5 factors when researching your health insurance options, you could make a more informed choice.
Metal level – Obamacare health insurance plans are structured by metal level: Bronze, silver, gold, or platinum. The levels don’t determine the quality of care but rather how you and your plan split the costs. Bronze plans are the most affordable, typically having a low premium, large deductible, and/or smaller doctor network, but most routine care would be out of pocket in the bronze plan.
As the plans progress, the benefits – including routine care – become more extensive, deductibles lower, and the monthly cost for the plans higher. For instance, a platinum plan pays approximately 90% of average medical costs and a bronze plan pays 60% of average medical costs. No matter which level you choose, you may qualify for an income-based premium tax credit that lowers your premium.
Network – If you are committed to your doctor or a particular healthcare facility, ensure they are included in the health insurance company network of the plan you are most interested in. Calling the health insurance company’s customer service department can help you learn if your doctor is in their provider network.
Deductible – A health insurance deductible is the amount of money you must pay before the health insurance company pays for your medical care. Take a look at your policy’s deductible and make sure you have the means to pay for that gap in coverage should unexpected medical bills arise. If not, you could purchase supplemental health insurance, which pays cash for accidents and illnesses to help cover your deductible.
Price – Your monthly budget shouldn’t be the only deciding factor in choosing a plan, but you need to be able to afford the monthly payments, otherwise, your health insurance plan will be canceled.
Penalty – In some states, you will get fined if you don’t have health insurance altogether. If health insurance is required by law, failing to have coverage will hurt you in tax season. This is because will owe the government a flat fee or a percentage of your income, whichever is greater, when you pay your income taxes. This nationwide requirement expired in most states in 2019.
A majority of Americans qualify for some type of premium tax credit, a financial subsidy to help lower the cost of their health insurance plan. When you begin shopping for health insurance, calculate your Obamacare tax subsidy before purchasing a health insurance plan.
Short-Term Health Insurance
If an Obamacare plan doesn’t match your budget or you believe you will obtain health insurance from an employer in the near future, short-term health insurance is an affordable alternative option. You should know a few things about these temporary health insurance plans:
- You cannot have certain pre-existing conditions, and most of these plans have blanket exclusions for all pre-existing conditions. If you have a pre-existing condition, an Obamacare care or employer plan is your best option.
- Coverage can start as soon as one day after you apply.
- Temporary insurance can typically last for 6 to 12 months, depending on your state of residence. Some states, however, limit temporary insurance to 3 months, and others don’t allow such plans at all.
Legal Situations That May Affect Your Health Insurance Before and After Divorce
No two situations are exactly alike, making it crucial to understand how certain situations could impact your health insurance.
Separated but Not Divorced
You can stay on your spouse’s health insurance if you’re not living together. Keep in mind that your spouse may receive your health records in the mail, however.
While one spouse generally can’t remove their partner from a shared health insurance plan until after the divorce is final, the primary spouse on a health insurance plan may be able to get health insurance coverage on their own once the plan expires.
If you and your spouse undergo a legal separation (or a “limited divorce”), the laws will differ based on your state and insurance company. Your plan may or may not view a legal separation the same as a divorce. As such, you should talk to your insurance company or attorney for more information.
Health Insurance in A Divorce Settlement
You can discuss health insurance in a divorce settlement. As part of the settlement, your spouse may cover premiums for you and your children through COBRA, their employer’s plan, or an individual market plan.
Divorced but You Don’t Lose Your Health Insurance
If you keep your health insurance after a legal separation, whether it is because you were the primary insured, then you may not have guaranteed rights to choose a new ACA plan. However, you might qualify to choose a new plan simply because someone else left your existing plan, or because your household income changed.
Can a Judge Order Changes to Your Health Coverage?
It is possible but not required for a court judge to order one spouse to pay the other’s health insurance premiums.
Divorce is a life-changing event, but finding health insurance after divorce shouldn’t be too difficult once you know your options. Make sure your wellness is protected so the next chapter of your life is healthy and happy. To learn more about your coverage options after divorce, give us a call at (770) 766-8148! To view this original article in HealthCareInsider, click here.