Health Insurance After Divorce?

One of the primary reasons that have historically kept estranged couples together is a desire to maintain the family unit for the sake of the couple’s minor children. More recently, health insurance and the desire to maintain health insurance coverage has become a major consideration of parties when deciding how to structure a legal separation and when to file for divorce.

It is not uncommon for one spouse to provide insurance coverage for the entire family. When a couple is contemplating a divorce, parties immediately begin to consider all of the consequences of the legal separation and, ultimately, the dissolution of marriage. Whether you are the spouse providing the insurance coverage or the one who has been covered under a spouse’s employer-based group plan, the question that is the subject of this posting is frequently asked.

Question: How long must a spouse that is providing health insurance for the other spouse continue to insure the spouse from whom he/she is seeking a divorce?

Answer: Upon the entry of a judgment of divorce, the insurance coverage for the former spouse will terminate. This is required by the terms of the insurance policy and not Maryland divorce law. Nevertheless, the former spouse may obtain an extension of insurance coverage under COBRA (federal law) for up to 36 months; however, it requires the former spouse to pay an insurance premium that can be quite costly. The former spouse seeking COBRA coverage must notify the group health plan within 60 days of the issuance of the divorce decree of his/her intention to obtain an extension of insurance.

Many insurance plans will not allow a change in insurance coverage outside of “open enrollment” unless there is a “qualifying life event.” Each insurance plan has its own rules and requirements regarding when and how one may make changes to health insurance coverage.

Even if a party can drop a spouse from insurance coverage prior to the entry of a divorce decree does not mean that a spouse should do so. There are other considerations. One consideration is the “optics” of making such a change during the pendency of a divorce. A spouse that deigns to take such action risks looking like a complete cad in front of the judge.

Instead, many parties negotiate a provision in their separation agreement, wherein the party providing insurance coverage agrees to continue such coverage until a divorce is granted, provided that the other party pays the premiums for such coverage.

If at all possible, parties are often best served by reaching an agreement on the host of issues that come up as part of a legal separation or divorce. The knee-jerk reaction when one is in pain is to lash out and inflict some pain in return. However, the satisfaction from doing so is often short-lived and the consequences may be more enduring. It is always advisable to consult with a family law attorney to assist one in crafting a legal solution that protects your rights but also preserves your dignity.