Divorce raises many questions, especially when it comes to something as essential as health insurance. One common concern is whether a spouse can remain covered under the other’s insurance after the divorce is finalized.
In California, there are several options and considerations when navigating this issue, each with its own set of rules and timelines.
Our goal here is to give you a clear understanding of how long you can stay on your spouse’s insurance and what alternatives exist once that coverage ends.
Health Insurance During Divorce Proceedings
It’s common to feel uncertain about health insurance during divorce proceedings. In California, there are safeguards in place to ensure that no one loses coverage suddenly while the proceedings are ongoing.
Temporary Orders/ATROs
In California, divorce proceedings include Automatic Temporary Restraining Orders (ATROs). These orders prevent spouses from making major changes to things like health insurance policies without consent.
Essentially, ATROs stop either spouse from canceling or changing insurance coverage while the divorce is still in the process of being finalized. This means you can remain covered under your spouse’s plan until the divorce is finalized.
Court Orders
You may need a court order to keep health insurance during divorce.This ensures that the insurance coverage continues uninterrupted, which can be particularly important if one spouse is dependent on the other’s plan.
COBRA Coverage
Once the divorce is finalized, the option to remain on your spouse’s insurance doesn’t automatically vanish. The federal COBRA law allows you to continue that coverage for a limited time.
What is COBRA and How Does It Work?
The Consolidated Omnibus Budget Reconciliation Act or COBRA for short, is a federal law that allows you to stay on your spouse’s insurance after divorce if their company has 20 or more employees.
It gives you the right to keep your health insurance even after you’re no longer eligible as a dependent, such as after divorce. Under COBRA, you’ll stay on the same plan your spouse had, but you’ll be responsible for the entire premium.
Duration and Cost of COBRA Coverage
You can keep COBRA coverage for up to 36 months after divorce. However, it’s important to note that the full cost of the insurance falls on you.
You’ll be paying not only the portion your spouse’s employer used to cover but also an additional administrative fee, which can add up quickly.
The 60-Day Notice Requirement for COBRA
Timing is critical when it comes to electing COBRA coverage. You have 60 days after your divorce to notify your health plan administrator if you want to keep coverage.
Missing this deadline could leave you without health insurance altogether, so it’s essential to stay on top of it.
Alternatives to COBRA
While COBRA can provide a temporary solution, it’s not always the most affordable option. Fortunately, there are alternatives available.
Covered California
Covered California is the state’s health insurance marketplace where you can purchase an individual plan. Depending on your income, you may qualify for subsidies or tax credits, making this option more affordable than COBRA.
Additionally, Covered California offers a range of plans to choose from, so you can find one that fits your needs and budget.
Employer-Sponsored Health Insurance
If you’re working or plan to re-enter the workforce, you may have the opportunity to enroll in an employer-sponsored health plan.
Most employers offer a 30-day enrollment window after a life event like divorce, so it’s important to act quickly to secure coverage.
MediCal
For those with limited income, MediCal, California’s Medicaid program, may be an option. MediCal offers comprehensive, low-cost health coverage based on your income.
This could be a good option for those who need long-term support after the divorce.
Legal Separation as an Option
Legal separation in California can be a strategic option for couples who want to maintain health insurance coverage while living apart.
Unlike divorce, legal separation allows spouses to stay legally married, which means the dependent spouse can often remain on the other’s health insurance plan.
This can be particularly beneficial when one spouse relies on the other's employer-sponsored insurance, as many plans terminate coverage upon divorce.
Legal separation offers a middle ground for couples who aren't ready to divorce but still want to protect important benefits like health insurance.
It’s worth considering for couples who need time to resolve other issues while avoiding the immediate loss of coverage that comes with divorce.
Additionally, it allows spouses to divide assets and make other legal arrangements without dissolving the marriage entirely.
Negotiating Health Insurance in a Divorce Settlement
You can include health insurance in your divorce settlement. Whether you’re concerned about immediate coverage or looking ahead to the future, it’s possible to negotiate health insurance arrangements as part of your agreement.
Settlement Agreements
A well-thought-out settlement agreement can include provisions about who will cover health insurance costs. Some possibilities include each spouse being responsible for their own coverage or the employed spouse agreeing to pay for the other’s insurance for a set period after the divorce.
Possible Outcomes
Common outcomes for negotiating health insurance include:
- One spouse continues paying for the other’s insurance for a specified time.
- Each spouse covers their own health insurance.
- A lump sum payment to offset the cost of future coverage for the uninsured spouse.
Health Insurance for Children
When it comes to child support, health insurance is often part of the calculation. Parents can negotiate who provides the insurance for their children and how the costs will be split. It’s important to ensure that children remain covered throughout and after the divorce process.
Medicare Considerations After Divorce
Medicare is typically available to individuals aged 65 or older, or those with certain disabilities, regardless of marital status. However, divorce can still affect your healthcare costs and coverage options in various ways.
For example, if you were relying on your spouse’s work history to qualify for premium-free Part A (hospital insurance), you may still be eligible as long as the marriage lasted at least 10 years.
Additionally, if you were covered under your spouse’s supplemental insurance or Medicare Advantage plan, divorce may require you to find your own supplemental coverage, which could lead to increased out-of-pocket expenses.
It's also important to evaluate how your income post-divorce may impact your Medicare premiums, as higher-income earners may face surcharges. Ensuring that you review your health insurance needs as part of your divorce strategy is crucial to avoiding unexpected costs and gaps in coverage.
Protect Your Health and Your Future
At Holstrom, Block & Parke, APLC, we understand how overwhelming the details of a divorce can be, especially when it comes to something as vital as health insurance.
Our experienced team is here to help you explore your options and secure the best possible outcome for your health and your future. If you’re facing divorce in California, we encourage you to reach out to us for a consultation.
We’ll help you navigate the legal process and make sure your rights are protected.
Contact us today at 855-426-9111 to schedule a consultation with one of our Certified Family Law Specialists. Let us help you protect what matters most.
