Post-Divorce Health Insurance: A Guide

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Divorce comes with plenty of surprises, and if you are facing a divorce, you very likely have enough on your mind. One factor that often gets lost in the shuffle that is known as divorce is health insurance. 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 have divorce concerns related to your health insurance – or to anything else – reach out to an experienced Belton divorce attorney today.

Think Carefully about Healthcare Insurance

If you are on your spouse’s employment-based health insurance plan, it is likely because it is the best financial option available to you (for the insurance coverage received). Now that you are divorcing, this is an issue that deserves your careful attention. Going without healthcare insurance is obviously a terrible option, and finding the right path forward toward affordable health insurance is paramount.

Healthcare costs have blown up over the last many decades, and insurance rates have increased right along with them. 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 attention and consideration from the outset.

If You Are Employed

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. This means that if you are employed, purchasing your healthcare insurance through your employer is likely to be your best bet. Going this route has much to recommend it, including:

  • 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).

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.

The Consolidated Omnibus Budget Reconciliation Act (COBRA)

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 intended to allow individuals to maintain their health insurance for a specified period of time due to being affected by qualifying events – of which divorce is one.

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). For those employers with at least 20 employees, COBRA kicks in upon divorce (and other qualifying events) 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:

  • 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 three-year mark).

  • COBRA can be an expensive choice.

Mini-COBRA

In Texas and some other states, there is also an option for divorcing spouses (and others) 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 nine 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 six 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), which is also known as Obamacare. ACA allows you to purchase health insurance directly through the government exchange – or off-exchange – which means that you will go directly through the provider or broker involved. The individual plans issued therein are guaranteed to be issued free of any underwriting and without 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.

Reach out to an Experienced Belton Divorce Attorney for the Help You Need

Divorce comes complete with any number of trials and tribulations, but it is important not to lose sight of the very critical matter of your own health insurance. Brett Pritchard at The Law Office of Brett H. Pritchard – proudly serving Belton, Texas – is a savvy divorce attorney with impressive experience helping clients like you address their divorce concerns head-on and find resolutions that work for them. We’re here for you, too, so please do not hesitate to contact or call us at 254-501-4040 today for more information about how we can help.

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