It may seem like there are a million different things to think about when you’re going through a divorce. Health insurance, as important as it is, is often an afterthought for many and can be easily overlooked. But the consequences of not taking care of your health insurance immediately can be dire.
What if the ex-spouse continues to use the health insurance because the employee never notified the employer of the divorce?
This is an incredibly dangerous situation. Failing to notify the employer in a timely manner of the divorce, which would trigger the removal of the spouse from the insurance policy, is tantamount to insurance fraud. At the least, the company may terminate coverage and refuse to pay benefits as well as refuse to issue COBRA rights. In the event the spouse should become ill or have a serious medical condition, they might have no coverage for it.
At its worst, the carrier could turn the matter over to its fraud unit and charges could be brought. The carrier MUST be notified immediately so that they may adjust the policy and provide the terminated former spouse with their rights under the contract.
Options for Health Insurance
When you are divorced, it is illegal for you to remain on your ex-spouse’s health insurance policy. The children absolutely can remain – and may be ordered to remain, particularly if the other spouse has no health insurance. But now it is up to you to find your own health insurance.
NOTE: Be sure to notify the employer that you are no longer married, so they can remove the non-employee spouse from their insurance coverage.
Your options are as follows:
- Get health insurance benefits from your employer;
- Get health insurance coverage from COBRA; or
- Secure private health insurance.
What is COBRA? (Hint: It’s not a snake)
If you are the ex-spouse seeking health insurance and your spouse works for a company that employs 20 or more people, you may apply for COBRA, a federal law which enables you to have continual coverage for 36 months under your ex’s plan. You must notify the health plan administrator within 60 days of your divorce that you are divorced and wish to apply for COBRA.
Under COBRA, you are responsible for the entire amount of the premium. You are wise to do your own research and price out COBRA versus other plans to determine what makes the most sense for you.
If the company has fewer than 20 employees, you may still be eligible for mini-COBRA coverage. Mini-COBRA laws are very different from standard COBRA, so be sure to research eligibility and coverage terms.
There are lots of other pros and cons about COBRA versus private insurance or insurance from your employer, so discuss these issues with a qualified divorce attorney like George Gelb. (Call for a FREE consultation and George will answer all your questions!) (561) 748-8000
What about Life Insurance?
Life insurance is a different matter altogether. While your ex-spouse cannot legally remain on your health insurance policy, you can name anyone you want as a beneficiary of your life insurance policy. It is not uncommon for policyholders to keep their ex-spouses on their life insurance policies, especially if they have children they wish to provide for in the event of their death.