Know your options for post-divorce health coverage

Unless each spouse has individual health insurance, and the couple has no children, a divorced couple must make decisions about handling their health insurance benefits moving forward.

  •  In cases where one spouse’s employer offers family coverage, the dependent spouse will no longer be covered after the divorce.
  •  Post-divorce, the dependent spouse who once received coverage under a family health insurance plan is no longer considered eligible for coverage under the employer-based policy.
  •  If the dependent spouse does not have access to adequate health insurance coverage on his or her own, there are two major courses of action.

 

  1. Apply for COBRA: The Consolidated Omnibus Budget Reconciliation Act (COBRA) is federal legislation that allows a person who is covered by a health insurance policy to continue that coverage, at his or her own cost, for a set period of time. Under COBRA, a dependent spouse could continue to be covered by the other spouse’s employer after the divorce, but would be required to pay the employer’s cost for the individual policy. The employer is required by law to provide COBRA coverage, but only if the company’s health plan administrator is notified by the dependent spouse within 60 days of the divorce being finalized.

 

  1. Separation agreement: In some cases, COBRA can be cost-prohibitive, as many people simply cannot afford the coverage premiums. The average cost for COBRA coverage is between $650 and $750 per month. An alternate course of action that preserves a dependent spouse’s healthcare coverage is a separation agreement. The spouses remain legally married, though property, custody and support issues are addressed under the separation agreement. The spouses can consent to wait several years before either party files for divorce.

Formal separation

In New Jersey, there is no formal proceeding for a legal separation. There is, however, a legal proceeding called a divorce from bed and board. Very popular in the 1950’s with Catholics who believed divorce was a sin, “divorce from bed and board” is a legal proceeding wherein the two parties are economically divorced but still legally married. The primary reason the proceeding is used today is so a dependent spouse, particularly one with an existing medical condition, can continue to receive healthcare coverage under the spouse’s employer. The major drawback of a divorce from bed and board is that neither party can remarry, though either spouse can file an application to convert the separation into an absolute divorce.

For more information about your healthcare options when considering divorce, contact the attorneys at Posternock Apell, PC at (866) 879-8855.