Understanding Health Insurance After Divorce: Navigating the Post-Split Terrain

Divorce is undoubtedly a life-altering event that impacts various aspects of one’s life, including financial stability and well-being. I recently received a phone call from a prospect whose first question was “What will we do about health insurance?”

Health insurance is a crucial consideration that requires careful planning. In this article, I will try to shed light on what happens with health insurance after divorce and how to navigate this complex terrain. In most cases, spouses are covered under a family health insurance plan. When you get divorced, this coverage usually terminates for the non-employee spouse. The employee spouse will usually continue his/her policy and will possibly cover the dependents. If the non-employee spouse does not seek employment with a company that provides health insurance, there are a few other options.

COBRA

The Consolidated Omnibus Budget Reconciliation Act (COBRA) is a federal law that allows individuals, including ex-spouses, to continue their existing employer-sponsored health insurance for a limited period. If your former spouse’s employer provides health insurance benefits, you have the option to elect COBRA coverage for up to 36 months after the divorce. However, it’s important to note that the cost of COBRA coverage is typically higher since you will be responsible for the full premium, including the portion that was previously covered by the employer.

INDIVIDUAL HEALTH INSURANCE

Purchasing individual health insurance is a common option for divorced individuals. Through the Health Insurance Marketplace (be sure you go directly to www.healthcare.gov to avoid being inundated with emails/phone calls from other companies) or private insurance providers, you can explore various plans that suit your needs and budget. It’s important to research different options, compare coverage, and seek professional advice to find the most suitable plan for you and any dependents.

EMPLOYER-SPONSORED COVERAGE

If you do happen to be employed and your employer offers health insurance benefits, you will be able to elect coverage after a divorce. Divorce is a qualifying life event that allows you to enroll or make changes to your health insurance outside of the standard enrollment period.

MEDICAID and OTHER ASSISTANCE PROGRAMS

In cases where purchasing private health insurance is financially challenging, consider exploring eligibility for Medicaid or other government assistance programs. These programs are designed to provide health coverage to low-income individuals and families, and they can be a valuable resource during challenging times.

CHILD HEALTH INSURANCE

During divorce proceedings, it’s crucial to address the health insurance needs of any children involved. Deciding which parent will provide health insurance coverage for the children is often determined during the divorce settlement. Additionally, child support agreements may include provisions for health insurance coverage, ensuring the well-being of the children post-divorce.

Navigating health insurance after divorce can be overwhelming, but with careful planning and the right guidance, it is possible to find suitable coverage for you and your family. Consider consulting a divorce financial professional (CDFA®) who can help you evaluate your options and point you to a qualified insurance professional, if necessary.

Remember that taking proactive steps to secure health insurance coverage is vital for safeguarding your well-being and peace of mind during this challenging transition.