For many couples, one spouse gets health insurance coverage through the other spouse's plan. Generally, it's the spouse who has an employer-sponsored health insurance plan who can provide the best coverage at a reasonable price for the entire family. The children are often on that plan as well.
What happens if the couple divorces? That's a question that too many people neglect to ask or assume they know the answer to until it's too late. Then they find themselves at risk of losing their insurance.
When Does Spousal Coverage End?
The good news is that if your children are on one of their parent's policies, they'll remain insured. Spousal health insurance coverage, however, continues only until the date the divorce is final.
In most states, people are prohibited from removing someone from a health insurance plan during the divorce proceedings. You can get a new insurance plan without waiting until the beginning of the new year. However, you must wait until the divorce is finalized. That final settlement qualifies as a life event, but filing for divorce doesn't.
You Can Delay the Loss of Coverage
Some states will allow couples to delay the processing of the divorce decree for up to a few months in order for the spouse who would be uninsured to obtain new insurance. If spouses can't agree on which of them will carry their children on their insurance plan, the court will determine who will have that financial responsibility.
People who are going to face a gap between when their divorce becomes final and their new insurance can take over can continue on their spouse's plan via the Consolidated Omnibus Reconciliation Act (COBRA). Many people are familiar with COBRA because it allows most employees to remain on their employer-sponsored plan for a time after they've left a company. Former spouses can continue receiving coverage via COBRA for as long as three years. However, that coverage can be considerably expensive.
If couples opt for legal separation rather than divorce, they may be able to avoid one person losing his or her insurance. However, some insurance companies treat legal separation the same as divorce when it comes to spousal coverage. Therefore, if that's one of the reasons you're considering legal separation as an alternative to divorce, check with your insurer.
If you have health insurance through your spouse's plan, whether it's an employer-sponsored plan or a government-provided one, it's essential to talk with your family law attorney about what you need to do to prevent a lapse in your coverage. Even one day without coverage can have a devastating financial impact if injury or illness strikes.
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