Can You Keep Your Spouse’s Health Insurance After A Divorce?

Can You Keep Your Spouse’s Health Insurance After A Divorce?

HEALTH INSURANCE COVERAGE AND DIVORCE

There are many health insurance issues that may be overlooked during a divorce, such as:

1. Is the ex-spouse still covered after divorce? For how long?

2. Can one party cancel health insurance coverage during the divorce?

3. What about health insurance coverage for the kids?

It is a common misconception that a spouse will continue to be covered under their ex-spouse’s plan after divorce. In fact, the parties need to be advised that as of the date of the decree, the ex-spouse is no longer eligible for coverage.

Any medical treatment incurred, even though the doctor may treat you, will be back-charged at full rate because health insurance coverage ends on the date of divorce. If you need any medical treatment, get it before the divorce is over, because you will have no coverage after that.

Employment lawyer Andrew Rempfer, Esq. was interviewed about the possibility of continuation coverage after the divorce. Mr. Rempfer noted that providing continuing coverage for an ex-spouse is critically important to consider when crafting the divorce decree because an employer sponsored health plan may only provide COBRA coverage, which generally costs 102% of the total premium costs, and expires after 36 months.

Sometimes the party who carries the insurance will spitefully delete the soon to be ex spouse from the company insurance plan, prior to the decree of divorce. If the spouse who cancels the insurance works for an employer with more than twenty full time employees, then the employer could be violating state and federal laws for allowing the employee to remove a spouse from an employer health plan prior to the decree of divorce.

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Mr. Rempfer commented that, “under state laws, IRS Code Section 125, and ERISA, an employer cannot allow an employee to make changes (including canceling coverage) unless there is a COBRA ‘qualifying event’. A COBRA qualifying event includes the end of the marriage by entry of the divorce decree, or legal separation. “In other words,” Mr. Rempfer noted “the employer cannot remove the spouse from the employer-sponsored health plan until after the divorce or legal separation is finalized.” Failing to comply with this could render the Plan in violation of ERISA and COBRA.

If a spouse does cancel insurance coverage during divorce, and the other spouse, relying upon such coverage, incurs medical costs, it may be argued that the medical debt incurred, if incurred prior to a signed divorce decree because one spouse canceled coverage, the debt should be the cancelling spouse’s sole debt. Any medical costs incurred after divorce, even if one spouse believes there was coverage, would be that person’s sole debt.

Pursuant to state law, parents must provide health insurance coverage for their children after divorce. Consequently, Mr. Rempfer noted, it is critical that the Court’s divorce decree clearly set forth who bears responsibility for continuing health care coverage for any children. In a perfect world, the child would stay on an employer-sponsored health plan, and thus not be subject to COBRA. In reality, if geography or other unique family dynamics may make this impractical. In that event, there may be no choice but to seek COBRA, and those extra costs associated with COBRA should be addressed in the divorce decree.

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