Health Insurance Coverage After Divorce


What happens to a spouse’s health insurance during and after a divorce?

Between the time a dissolution action is filed and the final divorce decree, health insurance is typically kept in place.In Snohomish County, upon the filing of the dissolution, the Clerk of the Superior Court will as a matter of common practice issue a temporary restraining order prohibiting both parties from making any changes to health insurance coverage. Health insurance does, however, become a problem at the end of the dissolution.

In many cases, one of the spouses is employed and has health insurance coverage available to him or her through their employment, while the other spouse is unemployed and does not. Upon dissolution, coverage becomes a huge issue for the unemployed spouse. Fortunately, a federal law, COBRA, offers protection to the unemployed spouse. COBRA requires an offer of continuation of group health coverage after dissolution to the uncovered divorced spouse. Employers may require those who elect the group health coverage to continue to pay the full cost of the coverage, plus a 2% administrative charge. Typically, that payment is more expensive than the amount the employed spouse is required to pay out-of-pocket for the same group health coverage, since the employer usually pays part of the cost of the coverage. However, the COBRA payment is ordinarily less expensive than individual health coverage, although that remains to be determined under the Affordable Care Act (“Obamacare”).

It is extremely important for the uncovered spouse to investigate all health insurance options during the dissolution.Compare different plans with the cost of the continued COBRA coverage. The cost of the health insurance coverage, whether it is attributable to continued COBRA coverage or a replacement health insurance, can be a factor to be considered as to spousal maintenance.

If the uncovered spouse elects continuation coverage under COBRA, the coverage that is given must be identical to that which is currently available under the plan to active employees and their families.In other words, the coverage must be the same that the uncovered spouse had immediately before the dissolution. Of course, that uncovered spouse is also subject to the same rules and limits on the plan, such as copayment requirements, deductibles, and coverage limits. The uncovered spouse is only entitled to a maximum of 36 months of continuation coverage, and must thereafter make arrangements for other health insurance coverage. Also, the group health insurer may terminate continuation coverage earlier than 36 months if the uncovered spouse does not pay premiums on a timely basis; or the employer ceases to maintain any group health plan; or if the uncovered spouse becomes entitled to Medicare benefits.

Please feel free to call for a consultation if you have any further questions with regard to health insurance coverage issues during a dissolution, or any other issues in that regard.

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