We often see that healthcare insurance is a major issue in divorce cases. Usually, one spouse has health insurance coverage available to them through their employment and they cover their family. But what happens when they get divorced?

Once a divorce is finalized, the health insurance carrier is prohibited from keeping the non-employee spouse on the insurance coverage. Unfortunately, this is a very bright line rule. Divorced = no more health insurance for the non-employee spouse. The employee can remained covered and any children can remain covered, just not the ex-spouse. So what do you do?

First, if there is any way that the spouse losing the insurance coverage can get their own coverage through their employer, they should immediately apply. Even if there is closed enrollment, a divorce is usually considered a “qualifying life event” that allows for a Special Enrollment Period (getting married and/or having a baby usually also qualify). Take advantage of that benefit and get your own insurance as soon as possible.

Second, if that is not an option, then the non-employee spouse can apply for COBRA coverage. A person must be qualified in order to get COBRA coverage. If qualified and approved, then the former spouse has the option of continuing the prior employer-sponsored health plan for a limited period of time.  This is usually no more than 36 months but can be less in some instances. COBRA maintains the insurance that was in place… but at a significant cost. Unlike when the spouse was providing the healthcare and the premiums were paid by wage deduction, COBRA has to be paid up front out of pocket and is it NOT cheap.

Third, as an alternative to COBRA, it may be more cost effective to explore the Affordable Care Act Marketplace also known as the Health Insurance Marketplace or Exchange. There are various criteria for getting insurance through the Marketplace. It is specifically designed for people who do not have health care coverage, do not qualify for Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), or another source that provides qualifying health coverage (defined as job-based plans; Health Insurance Marketplace plans; most individual plans bought outside the Marketplace; Medicare; Medicaid; the Children’s Health Insurance Program (CHIP); TRICARE (military insurance); COBRA and/or plans sold through the Small Business Health Insurance Program (SHOP) Marketplace) and are based upon income.

Fourth, a former spouse may be eligible for either Medicare or Medicaid.  Medicare is an entitlement for seniors 65 and over – and some younger people with disabilities – while Medicaid is a public-assistance program for needy Americans of all ages. They each have different qualifying requirements. Medicare is an entitlement because its costs were deducted from the employee’s wages throughout their working years. Enrollment at some point after age 65 will entitle that person to receive the benefits they already paid for. In contrast, Medicaid is a public assistance program based largely on financial need.

A spouse really should not be required to be removed from their spouse’s work-related health insurance coverage and end up on Medicaid. That is why is can be important to consider the options in the divorce action. Should the covered spouse contribute to the healthcare insurance coverage costs of their spouse as element of support? Should the healthcare insurance coverage costs be factored into any alimony obligation so the spouse can pay for their own insurance? Should the parties consider a Divorce from Bed and Board instead to try to maintain the existing coverage despite their separation without additional cost? These are all things that need to be considered before racing to the finish line of divorce if one spouse has health coverage, but not the other, especially if the parties are older and/or have health issues that may make getting replacement insurance more difficult.

Adinolfi & Packman is located in Haddonfield, New Jersey and serves clients throughout the state.  Julie Burick, Esq. is a partner at Adinolfi & Packman, PA.  Issues such as healthcare can be critically important to the overall resolution of your case.  Hiring an experienced and knowledgeable attorney is very important.  Contact our office today to schedule an initial consultation 856.428.8334.