Family Law

Getting COBRA and Health Coverage After Divorce

By Melissa Heinig, Attorney
Learn about your health insurance options after divorce.

In today’s world, where the powerful are always debating about whether everyone deserves healthcare, you realize that your health insurance is one of the most important assets that you have. If your spouse’s employer provides your health insurance and you are filing for divorce, your coverage will change. Do you know the options for coverage once you’re divorced?

COBRA Is Federal Law

The judge may order your spouse to continue providing health insurance for your children after your divorce, but what about you? With the cost of medical care these days, one serious injury or illness can push even the most financially responsible person into bankruptcy.

COBRA, or Consolidated Omnibus Budget Reconciliation Act, is a federal program that requires your spouse’s employer to provide you with temporary health insurance after any significant life event, like divorce. Other life events that may trigger COBRA include:

  • the employee quits, or the employer fires the employee for a reason other than gross misconduct
  • the employer reduces the spouse’s work hours, limiting regular coverage
  • your spouse becomes eligible for Medicare
  • divorce or legal separation, or
  • the employed spouse dies.

Do I Qualify for COBRA?

For you to qualify for COBRA, you must meet the following requirements:

  • your group health plan must meet specific guidelines
  • a qualifying event must occur, and
  • you must be a qualified beneficiary for the event.

First, your spouse’s group health plan must meet specific guidelines before the law requires it to provide coverage. If your spouse’s employer employs more than 20 people, then you are eligible for COBRA if you meet the other requirements.

If your spouse works for a small business with less than 20 employees, don’t despair. Some (but not all) states offer a program called mini-COBRA, which gives you the similar benefits as the regular COBRA program. Before you finalize your divorce, check with your attorney to see if your state participates.

The COBRA law does not apply to any federal government or churches, so if your spouse works for either, you’ll need to go back to the drawing board for coverage.

Next, you’ll need to demonstrate that you meet the qualifying event requirement. If you’re getting a divorce, that’s enough to satisfy this requirement. Finally, you must be a qualified beneficiary, meaning you were an individual covered by the group health plan on the day before the qualifying event (and your spouse continued coverage after the divorce). If you cancel your health insurance when you file for divorce, or you opt out of the health plan before the judge finalizes your divorce, you will not qualify for COBRA.

When Do I Need to Decide If I Want Coverage?

If you meet the requirements for COBRA, you have 60 days after your divorce to elect to continue your health plan through COBRA. If you fail to give notice, you lose your right to coverage.

What Does COBRA Cover?

One benefit to COBRA health insurance is that you can maintain the same coverage you had before the divorce, meaning you can keep the same doctors and specialists without interruption (if you don’t let the coverage lapse.) It also entitles you to participate in the same open enrollment period as any other member is privileged to while you’re paying for COBRA.

COBRA Has a Downside

COBRA is temporary

If you’re hoping to end all your health insurance woes once you enroll in COBRA, think again. Some qualifying events limit you to only 18 months of coverage, but if a divorce is what triggers your eligibility, you have 36 months from the date coverage begins to find other options. Once time runs out, you’ll be without insurance unless you secure another plan.

Coverage with COBRA is expensive

If you’ve ever had employer-sponsored health insurance, you’ve probably seen the deduction for coverage on your paycheck. Typically, you’ll pay for a portion of your insurance, and your employer will pay for the remainder. Unfortunately, even though COBRA entitles you to receive the same health plan, it doesn’t require your spouse’s employer to continue to pay for any of the coverage. That means that if your spouse was paying $150 per month and the employer was paying $500, you’re now responsible for a monthly payment of $650, plus up to 2% more.

Look for Other Options

If you’re considering opting into your COBRA plan, do so temporarily and look for other options as soon as possible. If you’re employed, consider discussing available health plans with your employer. It’s always a hassle to change doctors, specialists, and even pharmacies, but in the end, you’ll probably be saving hundreds of dollars per month by switching.

If you are unemployed, or your employer doesn’t offer insurance, visit the health insurance marketplace, where you can see all the options available to you from many different insurers. The website provides comparisons for various companies, levels of plans, and even shows you how the prices vary based on deductible requirements and monthly fees. For low-income people, the marketplace will also help you determine if you’re eligible for tax credits that would lower your monthly premium.

In other cases, the marketplace can also tell you whether you qualify for Medicaid, which is a free government program that offers medical insurance to low-income residents. You can also call your local Medicaid office to learn how to qualify for coverage.

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