LOSING HEALTH INSURANCE AFTER DIVORCE
Divorce is traumatic enough without the added injury of losing health insurance.
We get many calls along these lines and our goal is simple.
Clearly explain all the options available and help our client find the best value.
There’s a lot to consider.
We’ll touch on the key issues but we’re happy to help with your situation.
So, let’s dive right in.
How Divorce Affects Health Insurance By Family Member
Most health plans require a family relationship…spouse, dependent child, domestic partner, etc in order to be under one policy.
Let’s look at each category.
Spouse or Domestic Partner losing health insurance
Divorce obviously affects this for the two spouses or domestic partners.
When a divorce is finalized, the two family members can no longer be on one policy together.
If the underlying policy is a group plan (through an employer), the person who is employed can remain on the policy.
The dependent spouse/domestic partner may (should) have a Cobra or Cal-Cobra option available to them as a result of the divorce.
This means that the dependent spouse can get the same group health plan for up to 18 months (may have an additional 18 month Cal-Cobra extension).
The dependent will generally have 62 days from last date of coverage to elect Cobra back to the last date of prior coverage.
The effective date must be day following last date of group so back months may need to be paid.
Divorce may allow the Cobra enrollee to change plans if available.
Individual Family Covered following Divorce
A spouse can also enroll in individual/family coverage including Covered California.
Changes in family make-up (including divorce) is a qualifying event that allows a person to enroll anytime during the year.
Even outside of Open Enrollment.
Loss of coverage allows for the most flexible effective date (1st of the month after enrollment)
IMPORTANT: If you elect Cobra, we will likely have to wait for Open Enrollment (Nov 1st for Jan 1st eff date)
Comparing Cobra and Individual Family following Divorce
We’re written an entire article on this topic here but the broad strokes:
- Cobra is generally much more expensive
- There may be tax credits available on individual/family market
- Cobra doctor networks are generally larger
It can be complicated (many facets) but don’t worry.
We can quickly compare the two options for you at 800-320-6269. Our services are free as Certified Covered Ca agents.
Dependent Children Losing Health Insurance
Children can generally remain on the parent’s policy until they turn 26.
Their rate would not change from the current charge for the kids.
This is important if the kids are currently in a course of treatment and need to keep a larger network of doctors/hospitals.
That being said…
It’s also a good time to re-quote the full market and see what’s available.
Pricing and tax credit can have a huge impact…especially if income is affected by divorce.
Covered Ca Considerations Following Divorce
Two important pieces come to mind.
1. If you’re divorcing mid-year, we can enroll you as a single person since you will file taxes as a single person (or head of house with children) the following April.
Status at the time you file taxes is what matters. For example, April of 2017 for a divorce that occurred during 2016.
2. In terms of income for tax credit calculation, Child support is not included but spouse support (alimony) is.
This also applies to the person paying the support in terms of their income.
Kids can remain as dependents on health plan or can also change plans.
They are under the same Special Enrollment period as the spouse/domestic spouse to change plans outside of open enrollment.
Following a divorce, when do things need to happen?
Timetable If You Are Losing Health Insurance Due To Divorce
Our time table partially depends on the type of coverage we’re losing.
If you are losing group health insurance due to divorce, here are the important deadlines.
- Cobra election period is generally 62 days from last date of group coverage
- We have 60 days to enroll in individual family plan after loss of coverage
- For Cobra, eff date will be retro-active back to last date of group coverage
- For individual/family, eff date will be the 1st of the month following app submittal
Cobra generally last 18 months. Some people may qualify for Cal-Cobra for an 18 month extension of the original Cobra period.
Individual Family can change during open enrollment (Nov 1st-Jan 31st) outside of a big life change (which divorce is).
We can help you with the process and make sure you don’t lose coverage options at 800-320-6269. Our services are free.
Key Take Aways If You Losing Health Insurance Following Divorce.
There are some important reminders if you find yourself exploring all the new options.
1. Tax credits can significantly affect your pricing and benefits
Call us at 800-320-6269 since income is the key driver of tax credits and income is always in flux following divorce.
2. Comparing Cobra and Individual/family (including Covered California) is critical
We need to look at doctors, income, health care needs, budget, etc. There’s a lot going on with this comparison but we can quickly size it up in 10 minutes at 800-320-6269
3. Watch out for deadlines!
They’re everywhere after losing coverage due to divorce.
Remember: 62 days after last date of coverage for Cobra. 60 days after loss of coverage or major life change for individual/family including Covered California.
Many people are obviously in a state of tumult after divorce and health insurance is one of those things we all love to put off.
Don’t wait too long.
Call us at 800-320-6269 and we’ll quickly get you on the right path.
One final note…cost of health insurance can figure into the divorce settlement.
Generally, the person losing coverage wants to quote equivalent coverage to what he/she had as part of the family.
We can help with this. Just send us current benefit summary and monthly rate for just you.
We’ll find the closest equivalent so you a cost basis for the divorce settlement.
We can expect increases of 10-20% going forward annually so make sure to take that into account.
Again, our services are free and we can help you with the full calculation at 800-320-6269.
Also, check out losing health insurance at age 26
Again, there is absolutely no cost to you for our services. Call 800-320-6269 Today!