Many families utilize employer health insurance coverage, but after a divorce, the spouse’s employer can no longer provide benefits to the ex-spouse. Unfortunately, there’s no way around this law.
As a result, the uninsured spouse has to find his or her own coverage plan. The cost of which should be disclosed to the court so these numbers can be factored into the final spousal support ruling.
Consider making health insurance part of your divorce settlement by requesting that the employed spouse pay for your premiums.
What Types of Medical Insurance Are Available for the Formerly Dependent Spouse?
There are three different types of medical insurance available to the uninsured ex-spouse:
1. Employer-provided medical insurance is the best option for medical insurance because the cost is typically subsidized by the employer to make it less expensive for the individual. These medical plans fall into one of four types: indemnity plans, service provider plans, preferred provider plans, or health maintenance organizations.
2. Individual medical insurance dictates that individuals purchase a policy directly from an insurance company. Before signing up for any policy, you should shop around for the best price and benefit offering to make sure your plan allows access to a hospital and physicians. Unfortunately, individual policy premiums tend to be more expensive than employer-sponsored plans.
3. All U.S. citizens over the age of 65 receive basic hospitalization benefits under Medicare, Part A. Medicare, Part B is an option for voluntary coverage and less expensive doctor bills. Since Medicare usually covers half of the average senior citizen’s health care bills, consider a supplemental insurance, such as Medigap.
What About COBRA Coverage?
The Consolidated Omnibus Budget Reconciliation Act (COBRA) entitles you to continued health insurance coverage under an employer’s group health plan, even if you’ve become ineligible to participate because of death, job loss, divorce, or other change of circumstances. COBRA ensures you have continued coverage if you were under your ex-spouse’s employer plan before the divorce. However, you now pay the premiums formerly paid by the sponsor-employer.
If the employed spouse continues to work for the organization, and that organization employs at least 20 people, you are allowed to stay on COBRA for 36 months until you remarry or become eligible for another insurance plan. In order to take advantage of COBRA, you must notify the health plan administrator within 60 days of the divorce.
Staying on your former spouse’s insurance policy under COBRA may be advantageous if the health plan offers good coverage. However, COBRA can be very expensive (around $650-$750 per month). Consider making health insurance part of your divorce settlement by requesting that the employed spouse pay for your premiums.