What You Need to Know about Health Insurance and Divorce
The issue of health insurance comes up in many of my cases as it can be a huge added expense post-divorce. You can’t stay on someone’s health insurance when you get divorced, but no one talks about the things you need to know and options that are available to you. For instance, what do you do when your child is no longer on child support, but can still be covered under the beneficiary’s plan until they’re 26?
There are two big things to consider with health insurance and divorce: your child’s coverage and your coverage. Here’s a high-level overview of what to know and how to plan for coverage post-divorce. As always, let me know if you have specific questions!
Health Insurance, Divorce, and Children
As part of the child support agreement, you’ll be identifying who is covering health insurance for your child or children. Bear in mind that it could reduce the amount of child support paid. For example, if you are awarded child support, but your children are covered for health insurance under your ex-spouse’s plan, the payments your ex is making for health insurance reduces the amount paid to you for child support.
Also, it’s important to note that child support only goes until the child is 18 or has graduated high school, depending on the specific laws in your state.
Now, from the side of the health insurance company, a child can be covered until they’re 26. After child support obligations are complete (again, either at age 18 or upon high school graduation), the parent can, at any time, take their kid off their insurance. So, if that parent hasn’t made a legal commitment to continue to support their child with health insurance, suddenly, that child is without it.
With that being said, this is obviously a gray area. There are eight years after child support ends that a dependent can be on their parent’s health insurance plan.
At that point, you as a co-parents have to make some decisions. When do you, the parent, stop being financially responsible for your child? Some parents believe it’s forever, others believe it’s when your kids turn 18. People who are married disagree on this, so certainly people who are divorced will, too!
The benefit of mediation is to have good agreement on these areas and come to the middle ground. Because it’s an area that doesn’t fall under the law, an ongoing parenting plan and agreement on what to do in this situation would benefit everyone.
This is especially true if someone is the main provider, and after 18 years of supporting their child, they’d like to explore other financial avenues, like planning retirement or spending time with their spouse. Having a mediation session to talk through the expectations of each parent, come to an agreement that will benefit the whole family, and lay out clear intentions.
At the end of the day, there’s more than one side. Find what works for your family, your circumstances, and your values. This is definitely a value-based decision on how you’ll plan to launch your children into adulthood.
Health Insurance, Divorce, and You
From the adult side of things, it’s much more cut and dry. However, you always need to find out what the actual health insurance plan says.
Health Insurance Options
When going through a divorce, you can receive coverage with COBRA for 36 months. COBRA allows you to continue receiving group health benefits provided by your group health plan for limited periods of time under certain circumstances, like divorce. Your soon-to-be-ex should reach out to the HR department to find out what the cost of COBRA would be.
Since you would qualify as a “change of status,” you could also shop the Marketplace outside of open enrollment windows. If you’re looking for lower-cost options, you could consider health share programs. Finally, insurance brokers are wonderful resources to look at other options for health insurance.
Another consideration to make is asking to have your health insurance paid for as part of your spousal support. (Although, that may require negotiating and for that, I’d recommend checking out my negotiating ebook!)
Your Divorce Date and Health Insurance
Unless otherwise told, assume your health insurance coverage ends on the date of divorce. But, and this is important, no one actually knows their date of divorce. You probably think you know based on the date you go to court. However, if the judge doesn’t sign off on the decree that day, it isn’t your date.
At any rate, have a plan in place for what you’re going to do. You always have a 30-day period to let COBRA know you’re going to enroll in their continuation of coverage.
With that window of time, you will likely have to pay the back coverage to make sure you have health insurance for the whole window post-divorce, but it is worth it. My recommendation is to do it sooner rather than later - again, because of that 30-day period and uncertainty around the exact date. You don’t want to delay and then discover you applied on Day 31 when you thought it was only Day 28!
To wrap everything up, health insurance affects you and your children after a divorce and needs to be carefully considered. Take advantage of mediation so you and your soon-to-be ex-spouse can talk calmly about your children’s health insurance plans both after the divorce while child support is available and how you wish to continue their coverage into early adulthood. Then, have a plan in place for yourself so you know your options post-decree and you aren’t caught in a weird window of time with your health insurance coverage.
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