Health Insurance and Divorce

Unless you and your spouse each have health insurance through your own jobs—and you don't have children—a necessary part of your divorce will be to decide how you'll manage health insurance coverage after the end of your marriage. Many families in the United States are covered by a policy provided by one spouse's employer. Divorce upends this arrangement, because the employer-provided plan will no longer cover the employee's ex-spouse.

Here's what you need to know in order to start the conversation with your soon-to-be-ex regarding health insurance coverage for yourself and the rest of your family once your divorce is final.

How a Divorce Will Affect Your Health Insurance

The vast majority of employer-sponsored health insurance plans won't cover ex-spouses. So if you're getting divorced and have health insurance through your spouse's job, you'll almost always need to find new coverage.

There are some outlier plans that will allow employees to extend coverage for ex-spouses for an additional fee. Check with your plan administrator to find out if this is an option—and if so, how much it will cost. In many cases, the additional fee might be so high that it makes more sense to just find a different health insurance provider.

Health Insurance During a Divorce

In most states, courts automatically issue temporary orders (sometimes called "temporary injunctions") whenever someone files for divorce. Among other things, these orders prohibit the spouses from canceling, modifying, terminating, or allowing to lapse any insurance policies—including health insurance—until the divorce is final.

If courts in your state don't automatically enter orders like this, you can request the judge to issue one.

Do I Have to Tell My Health Insurer About My Divorce?

Divorce won't affect your coverage if you're the primary insurance holder through your employer. But if your spouse is on your plan, you'll need to follow the procedures for notifying the plan of the divorce. Review the plan documents for instructions on how to do this. Most group plans (including employer-sponsored and private plans) will require you to notify the plan administrator within 60 days after the divorce is final.

If you don't notify the insurer on time, your policy could be canceled.

Health Insurance Coverage and Divorce Settlement Agreements

Because health insurance is such a major expense for most families, it's absolutely necessary to determine how you'll handle it after your divorce.

If you and your spouse are working on a divorce settlement agreement, you should definitely address the issue of health insurance. Couples often agree that one of them—typically the spouse who had coverage through work—will pay for the other's coverage for a certain amount of time after the divorce. Another common arrangement is for one spouse to pay the other a lump sum that will be enough to pay for health insurance for a period of time.

Remember that most employer-provided plans won't allow continued coverage for an ex-spouse, so don't agree to this option unless you're positive that it's allowed. You might be able to stay on the same plan under COBRA (discussed below), but that's different from having your spouse's employer continue to subsidize some of your coverage.

If you have a child, the judge will have to review and approve any agreement you've reached about paying health insurance for your child. In many states, health insurance coverage for a child is considered part of a parent's obligation to pay child support (more on that below).

Health Insurance Options After Divorce

Divorce is considered a "qualifying life event," meaning that it makes you eligible to enroll in a new insurance plan during a special enrollment period (SEP). The length of SEPs depends on the type of plan you're signing up for. Be sure to check the SEP length as soon as possible so you don't miss a deadline.

Common options for post-divorce health insurance coverage include:

• A policy through your own employer. If your employer provides health insurance coverage, this might be your least expensive option for getting a new plan. Most employer-sponsored plans allow you a SEP of 30 days after your divorce is final.
• COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage. Employers with at least 20 employees must offer COBRA coverage to anyone covered under their plans who experiences a qualifying life event. Ex-spouses of a covered employee can remain covered under the same insurance for up to 36 months after the qualifying life event. When the plan becomes aware of a qualifying event, it will send out a COBRA election notice that explains the parties' rights under COBRA. Ex-spouses who've lost coverage have 60 days to elect COBRA coverage, starting from either the date they receive the election notice or the date they would lose coverage, whichever is later. But COBRA can be expensive, because the employer will no longer cover any of the premium.
• Affordable Care Act (ACA) plan. Also known as "Obamacare," the ACA offers affordable coverage that you can purchase on what's known as the "Marketplace" (more on that below). You don't have to qualify financially to get this insurance, but there is assistance available for lower-income individuals. The Marketplace offers multiple plans you can choose from, with varying degrees of coverage, deductible amounts, and premiums. Open enrollment is from November 1 to December 15, but as long as you lost coverage because of your divorce, you'll have a SEP of 60 days after the divorce is final to buy a plan from the Marketplace.
• Short-term coverage. Short-term health insurance plans are mostly designed to provide coverage (usually for 6-12 months) in the event of emergencies and catastrophic medical issues. These plans typically don't have to meet the stricter standards that private or Marketplace plans must. They also usually have high deductibles, meaning that you might pay a lot out of pocket before any coverage really kicks in. Given the other available options, you'd probably want to consider a short-term policy only if you have a very short gap or have missed the enrollment window to apply for other coverage.
• Medicaid. You might qualify for public health insurance through Medicaid if you have very low income. Each state administers its own Medicaid program, so check your state's program for eligibility and to see what's covered.
• Medicare. Medicare is a public health insurance program administered by the Social Security Administration. Consider this option if you're 65 or older (or you have a disability). Medicare eligibility isn't affected by divorce, but the cost of your premiums might be affected if you didn't pay Medicare taxes yourself. However, you might qualify for cheaper premiums if you were married for more than 10 years to someone who now qualifies for Medicare and paid Medicare taxes, and you are currently unmarried.

How Will My Divorce Affect My Children's Health Insurance?

Most of the time, divorce won't affect dependent children's eligibility to remain on their parents' plan. Children can remain on a parent's plan even if they don't live with that parent.

In most states, a divorce decree or child support order must include details about how the parents will continue to provide health insurance for their children, as well as how they'll allocate the cost of coverage. Parents may agree about how they'll handle insurance for their children, but a judge will need to approve their agreement. If the parents can't agree, a judge will decide for them.

How Legal Separation Affects Health Insurance

Some states offer couples the option of legal separation instead of divorce. Many couples choose this option so that both of them can stay on one spouse's employer-provided health insurance plan. But beware: Before deciding on a legal separation for this reason, you'll want to check both your state's laws and the fine print of the insurance plan you're hoping to keep. Many health insurance plans view legal separation the same as divorce, which means they'll refuse to cover the nonemployee-spouse.

Other Resources to Help You Navigate Post-Divorce Health Insurance

If you're working with an attorney to finalize your divorce, your lawyer will help you negotiate post-divorce health insurance coverage. A divorce mediator might also be able to suggest options and help you draft a divorce settlement agreement that deals with the insurance issue.

One of the best online resources for navigating health insurance will be the website for your state's health insurance Marketplace. HealthCare.gov also has a wealth of information about ACA plans as well as other types of insurance. You can also check out your state's insurance commissioner's website for information about health insurance rules and availability in your state.

For information about COBRA coverage, you can visit the U.S. Department of Labor's website.