Updated on August 22, 2022
Many Texas families are insured through one spouse’s employer-sponsored health care plan. But what happens when a marriage falls apart? Can a non-employee spouse stay on their ex-spouse’s health insurance following a divorce? What about the children?
While your children's health insurance is addressed in your child support terms, your own health insurance—if you are currently on your spouse’s policy—is another matter that is unlikely to be addressed in your divorce but that can play an important role in your financial future—as well as in your future health and well-being.
If you are getting divorced, it makes sense to wonder if you can stay on your spouse’s health insurance after your divorce is finalized. Consult with a Lampasas County divorce attorney to consider your options regarding health insurance for yourself and your children.
The Importance of Healthcare Insurance
Insurance rates have blown up over recent decades. In fact, insurance expenses are second only to mortgage expenses in many households, and it is important to remember that even a moderately serious illness or injury can set you back tens of thousands of dollars in medical costs.
In other words, where your post-divorce healthcare insurance is going to come from is an important concern that requires your careful consideration from the outset of your divorce. Going without healthcare insurance is obviously a terrible option, and finding the right path forward toward affordable health insurance is paramount.
Health Insurance During Divorce Proceedings
Many Texas counties have standing orders that automatically become effective once a spouse files a petition for divorce. Essentially, a standing order is a court order that prevents spouses from altering their health insurance while the divorce is pending (Read more about grounds for divorce in Texas).
The standing order goes into effect once one of the spouses files for divorce and the other is served with divorce papers. Aside from this standing order, Texas courts have the authority to issue other temporary orders to set restrictions and spell out the spouses’ rights and obligations during the divorce proceedings.
When a standing order is issued, your spouse cannot remove you from health insurance or otherwise make any changes to health insurance coverage while the divorce case is pending.
If you file for divorce in a county that does not have a health insurance standing order and your spouse has removed you from their health plan (or threatened to do so), contact your attorney right away.
Health Insurance Following a Divorce
The question of health insurance following a divorce is more complicated for former spouses.
If you are covered by your divorcing spouse’s health insurance, the law mandates that this coverage end as soon as you are no longer married—regardless of how amicable your divorce is. This is a matter of law and not a matter of the terms of your divorce.
While your spouse’s employer may have offered a better health insurance plan, now that you are divorcing, it is time to consider all your options.
Insurance through Employment
If you are employed—or are working toward becoming employed—your best option is probably to move to your company’s health insurance plan. Insurance plans purchased through work usually offer comprehensive coverage that is also affordable. Going this route has much to recommend it, including these benefits:
Group rates are much lower than individual rates.
Your premiums will be deducted directly from your paycheck.
You will receive a tax break in the process (your premiums are a pre-tax expense).
The advantages of insurance through an employer are why many stay-at-home parents seek work after going through a divorce. Regardless of your situation, it is important to factor health insurance coverage into your divorce considerations.
If you are not employed, or your employer is so small that it does not offer healthcare insurance, you will need to explore other options. Purchasing health insurance directly as an individual is the most expensive choice, and it is nearly guaranteed to be cost-prohibitive.
If you are not employed, this fact may bolster your need for spousal maintenance (also called alimony) as you obtain the education, experience, or job skills you need to become employed and provide for your own health insurance.
COBRA Health Insurance
If you cannot obtain insurance via your own employment—because you are not employed or because it is not offered—the Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 might be an option. COBRA is a federal mechanism that is intended to allow individuals to maintain their health insurance for a specified period of time due to being affected by qualifying events—including divorce.
Because a divorce automatically disqualifies you from remaining on your ex’s health insurance policy, COBRA allows you to purchase identical coverage for up to three years.
For those employers with at least 20 employees, COBRA activates upon divorce and allows you to keep your coverage through your ex’s plan for up to three years. There are caveats to this option, however, which include the following complications:
You have only 60 days from the date you receive an eligibility notification to fill out your COBRA enrollment forms and return them.
COBRA has an end date (the 3-year mark).
COBRA can be an expensive choice—especially after the financial losses that often accompany divorce.
Who Qualifies for COBRA?
You may qualify for COBRA coverage if your former spouse works for a:
A private-sector employer with 20 employees or more; or
A state or local government.
Generally, spouses are not entitled to coverage through COBRA when their ex-spouse has a health plan sponsored by:
The federal government
Churches
Certain church-related organizations
What Medical Care is Covered Under COBRA?
Under COBRA, covered medical care includes these services:
Physician care
Prescription medications
Inpatient and outpatient care at hospitals
Dental care
Vision care
Surgeries
Other major medical benefits
Life insurance and disability benefits are not considered medical care under COBRA. Thus, health plans that provide only disability and life insurance benefits are not covered under COBRA.
How Much Does COBRA Cost?
Beneficiaries that qualify for COBRA health insurance must pay up to 102% of the cost of the health plan to continue coverage under the federal act. The figure accounts for the total premium and a 2% administrative fee.
There may be cheaper options for health insurance following a divorce. However, obtaining coverage through COBRA may be a good option for the first two years after divorce until you get your life back on track.
Mini-COBRA Health Coverage
In Texas and some other states, there is also an option for divorcing spouses and their dependents who are not eligible for COBRA or who have exhausted their coverage through COBRA. This state-sponsored healthcare coverage continuation is often referred to as mini-COBRA, and the following rules apply:
You can stay covered on mini-COBRA for a total of 9 months on your ex’s employer-based healthcare plan if you are not eligible for COBRA.
If you have already exhausted your COBRA coverage, you can remain on mini-COBRA for a total of 6 additional months.
Mini-COBRA can buy you time while you figure out your best option for obtaining long-term health insurance.
The Affordable Healthcare Act (ACA)
Another option is the Affordable Healthcare Act (ACA), also known as Obamacare. ACA allows you to purchase health insurance directly through a government exchange with a set enrollment period. You can enroll outside of the open enrollment period if you experience a precipitating event, such as a divorce.
The individual plans issued therein are guaranteed to be issued free of any underwriting or exclusions for preexisting conditions, which helps to make it a viable option for many.
Further, ACA coverage continues to become more robust, and many of the options available through the ACA are becoming more affordable. If you can’t obtain health insurance via your own employment and have lost group coverage through your former spouse’s health insurance plan, the ACA may be a very viable option.
Can the Children Stay on My Former Spouse’s Health Insurance After a Divorce?
In most cases, your children’s health insurance is not affected by your divorce. However, determining who should provide health insurance for kids following a divorce can get complicated. Read “Texas Divorce and Health Insurance: Making Sure Your Children Are Covered” to learn more.
Speak with a Lampasas County Divorce Attorney
Divorce is going to affect your finances, and it is important to stay on top of the details, including how divorce will affect your health insurance coverage.
If you are worried that you may not be able to stay on your former spouse’s health insurance following a Texas divorce, contact an attorney to discuss your options.
At The Law Office of Brett H. Pritchard, our divorce attorneys are dedicated to helping you understand your options and identify the insurance coverage option that is best for you. Call us at (254) 781-4222 or contact us online to schedule a case review.