Removing your spouse from health insurance
A common concern for individuals going through a divorce is what happens to their health insurance during and after the proceedings.
Once the divorce is underway, it’s a natural response to want an immediate separation of finances, assets, and health insurance, but this could be detrimental to your case – and illegal – if you act too swiftly to sever the marital bonds prior to the divorce decree being signed.
The following is a short guide to issues surrounding health insurance and divorce.
Who’s responsible for whom?
While the terms of the divorce are being worked out, the prospect of healthcare, including whether it’ll be accessible during or after a divorce, might be of concern for both spouses.
Depending on which spouse is working, even if both are employed, there is usually a primary policyholder on an insurance plan.
If you are the primary, you are effectively responsible for your spouse’s healthcare. This means even during a divorce, you must still cover your spouse. You are responsible for them until the divorce is final unless the court orders otherwise.
This mandatory injunction cannot be changed, unless your spouse has found coverage elsewhere, and even this agreement must be put in writing and approved by the court.
The legal ramifications of removing your spouse
In nearly every case, a divorce filing means that a legally enforced injunction is in place, which prevents you from removing your spouse, or being removed from your spouse’s, health insurance. This also applies to car insurance, auto insurance, and even life insurance.
When a divorce is pending, all legal entanglements, including financial assets (bank accounts, cars, etc.), and health insurance, are put in stasis—in other words, they are frozen until agreements are reached between both parties, or until the judge has made a decision (in a contested divorce) regarding your case. Removing your spouse from any insurance policy might result in the judge finding you to be in contempt of court.
Additionally, any medical costs incurred by your spouse as a result of the removal will be your responsibility. In Colorado, you need at least 14 days notice prior to the removal request. It can come in the form of a written request from your spouse, the passage of the 14-day waiting period, or a court order. Your attorney can advise you in this regard.
Health coverage options
In the past, once a divorce was finalized the prospect of finding coverage was more difficult for the recently divorced, especially if they were unemployed.
One option for continued coverage was and is COBRA (Consolidated Omnibus Budget Reconciliation Act), though you’ll have to pay the full cost of the premium, and it’s only available for up to 36 months. Subsequently, the non-employee spouse will have to find alternative coverage.
In cases where a spouse is a stay-at-home parent or faces financial hardships as a result of the divorce, they can negotiate to have their COBRA premiums paid by the spouse. It’s not a common occurrence, but it is possible.
Additionally, under the new Affordable Care Act, many more health care options are available to everyone through the new health care Marketplace. Everyone is required to have some type of health insurance or face a penalty, but the upside to this is that if you are recently divorced can now much more easily find insurance.
Each state has its own set of laws, so it’s a good idea to consult with an attorney concerning your options for health insurance coverage after the divorce.
Health coverage for federal employees
For government workers (federal employees) who are covering their spouses, the government allows for a continuance of coverage until the finalization of the divorce. At which point, the spouse can apply for COBRA insurance, or purchase insurance under the Affordable Care Act. And, according to the OPM (Office of Personal Management) the spouse may also apply for coverage under the Spouse Equity or Temporary Continuation of Coverage (TCC) provisions of the FEHB (Federal Employees Health Benefits) law.
Spouse Equity allows for the former spouse to enroll in FEHB with certain requirements. As with COBRA, enrollees must pay the full premium for the plan they select.
Health coverage is an important matter during a divorce and subsequent to the divorce decree. Consult with a divorce attorney about your state’s laws and whether to pursue removal of your spouse from your health insurance, or if another strategy would be best.