One of the aspects of divorce that no one is fully prepared for is the sheer amount of bureaucracy involved, even after a split is finalized. For example, many people celebrate the finalization of their divorces, only to find out that they’ve lost all health insurance coverage.
The last thing you want to do in your first few months as a single person is scramble for health coverage. Let’s break down how your divorce could impact your insurance and tips for streamlining the transition to a new plan.
How Divorce Impacts Your Health Insurance Coverage
If you receive health insurance through your employer, divorce may not impact your coverage at all. You will need to notify your employer of your divorce so that the company can update your insurance policy as necessary. However, you should continue to receive the same coverage and may even have a lower premium since your ex-spouse is no longer on your policy.
Things get more complicated if you receive coverage through your spouse’s employment-sponsored health plan, though. In many cases, divorcing means you will lose this coverage. Employers are not required to provide policies to the divorced spouses of their employees.
Under the Consolidated Omnibus Budget Reconciliation Act (COBRA), you may have the option to continue coverage under your ex-spouse’s employer-sponsored plan. However, COBRA coverage is usually limited to 36 months after the divorce. It can be more costly, as you will have to pay the full premium, including the part previously covered by the employer. In addition, it only applies to companies with 20 or more employees, so many employers aren’t required to do this.
In those situations, you may need to purchase an individual plan. This can be done through the Health Insurance Marketplace, where you may also qualify for subsidies based on your income. A divorce is considered a qualifying life event, which allows you to enroll in a new policy outside of the usual open enrollment period. This special enrollment period typically lasts 60 days after the decree is issued, so don’t delay, or you’ll have to wait until the next open enrollment period to regain coverage.
6 Tips for Managing Health Insurance Coverage After Your Divorce
1. Review Your Current Policy
Firstly, review the details of your current policy. If you were covered under your ex-spouse’s employer-sponsored plan, you need to be aware of the changes that will occur upon finalizing your divorce.
2. Understand the Terms of Your Divorce Decree
Your divorce decree should outline the specifics regarding insurance and benefits. Some divorce settlements may include provisions for one spouse to continue providing insurance for the other or may stipulate financial assistance to offset the cost of health coverage. It’s crucial to fully understand what your decree says about insurance to make sure you have access to the coverage you need.
3. Consider Your Children’s Needs
If you have children, it’s essential to decide who will provide their health insurance. This is often part of the divorce settlement. Both parents might have the option to keep the children on their respective health plans, or one parent might continue to provide coverage.
4. Consider Different Types of Coverage
If you like your current plan and it’s in your budget, COBRA coverage may be an excellent option as a stop-gap. However, it’s important to remember that this coverage only lasts a limited time, and you’ll need another form of health coverage sooner rather than later.
For that reason, it’s important to Investigate individual policies. The Affordable Care Act (ACA) provides various options, and you are likely eligible for a special enrollment period due to your change in marital status. Similarly, California offers state-sponsored programs like Medi-Cal, which you might qualify for based on your income and family size.
How to Prepare for a Smooth Transition
Once you have found a policy that works for you, there are still a few steps to make sure you don’t lose insurance coverage because of your split. You can streamline the transition from one policy to another by taking a few simple precautions:
- Act Promptly: Time is of the essence, especially with health insurance. There are specific enrollment periods and deadlines you need to meet to avoid gaps in coverage.
- Keep Records Organized: Keep all documents related to your insurance and benefits organized. This includes your divorce decree, insurance policies, and any correspondence regarding changes in your coverage.
- Communicate With Employers and Insurance Companies: Inform your employer and insurers about your change in marital status. They can provide information about your options and any necessary steps you need to take.
- Budget for Changes in Expenses: Your financial situation may change post-divorce, affecting your ability to pay for insurance and other benefits. Create a new budget that accounts for these changes.
- Prioritize Your Health and Well-Being: During this transition, it’s essential to prioritize your health and well-being. Ensure that you maintain continuous health coverage during this period.
- Utilize Professional Resources: Don’t hesitate to use resources such as financial advisors, insurance brokers, and attorneys. They can provide valuable assistance and advice tailored to your situation.
Get Practical Assistance With the Bureaucracy of Divorce
Navigating health insurance and benefits post-divorce requires careful planning and consideration. By understanding your options, the legal implications, and how to stay organized, you can ensure a smoother transition into this new phase of your life.
Remember, seeking professional advice is always beneficial in understanding and managing the complexities of post-divorce health insurance and benefits in California. By doing so, you can ensure that you are making the best decisions for your health and financial well-being during this transitional period.At Rodriguez Lagorio LLP, our experienced family law attorneys understand how stressful handling all of these issues can be. We’re dedicated to helping Bay Area and Fremont families navigate even the most complex divorce situations with less stress, worry, and financial pressure. We encourage you to schedule your consultation today to discuss how we can assist you with the bureaucracy of divorce.