Dealing with your health insurer is probably not at the top of your “to do” list if you’re getting a divorce. Even so, there’s important information you should supply to your insurer if you’re going through a divorce, especially if there are issues about the custody of children.
Divorce under a group health policy
Let’s suppose a couple insured on the husband’s group policy gets a divorce and the wife needs to be taken off of the husband’s health plan. The husband should inform his employer or health plan administrator of the change, most likely by filling out an enrollment/change-of-policy form. The form is then forwarded to the health insurance provider, who makes the appropriate adjustments to premiums and policies.
Your insurer needs proof of divorce before any adjustments are made.
Fortunately, the wife in this scenario will not necessarily find herself suddenly without health insurance. COBRA (short for the Consolidated Omnibus Budget Reconciliation Act) provides a vital bridge between health insurance plans for qualified workers, their spouses and their dependent children when their health insurance might otherwise be cut off.
If you qualify for COBRA, the health plan administrator must give you a notice stating your right to choose to continue benefits provided by the plan. Then you have 60 days to accept coverage or lose all rights to COBRA. If you select COBRA coverage, you may have to pay 100 percent of the total insurance cost plus a 2 percent processing fee.
COBRA guarantees, in this example, that the wife can buy 36 months of health coverage through her ex-husband’s group health plan. When a husband notifies his employer of the divorce, the employer will send notices to the family members on the policy, informing them of their right to COBRA coverage. (Read more here: Know your COBRA rights.)
Since COBRA benefits are meant to be short-term, the wife in this scenario should consider securing another health insurance policy. In addition, if both parties have group coverage available through their workplaces, the spouse who is dropped from the original health coverage can immediately pick up group coverage through his or her employer without waiting for an open enrollment period.
Divorce under an individual health policy
Individual health policies work much the same way. When your divorce is finalized, you’ll have to notify your insurance carrier and the company will terminate the policy you and your ex-spouse shared. Both of you will then have to re-enroll or buy coverage from another insurance provider.
If you and your ex-spouse decide to stick with the same insurance company, it will issue two separate policies after the application process is complete.
The COBRA law does not apply to individual health policies.
Coverage for children
Your children can be covered by either your or your ex-spouse’s insurance provider, or both. A group policy will be used before an individual policy to cover the children. This is an industry-wide practice established by the National Association of Insurance Commissioners.
Also keep in mind most HMOs are not national health care providers; they’re limited to regional networks of providers. This can complicate your children’s insurance. Your children might still be insured by your spouse’s policy, but if you and the children move outside the HMO’s service area, coverage for your children will be limited to emergency care only.
No reason to keep double coverage on children
The court system will make sure your children are getting the necessary coverage.
There’s no reason for you, with a group health plan, and your wife, with an individual plan, to both name your children as dependents. Individual policies are so expensive that adding dependents to one when the other parent has a group policy is a costly decision.
By the same logic, it doesn’t make any sense to name children on both group plans and pay for two separate family coverages. If you can work through these issues amicably, the two of you should decide which group plan offers the best benefits for your children and put your children on that plan. Remember that notices about changes in benefits and rules will be mailed to the parent who holds that plan, even if the other parent has custody.
If you and your spouse aren’t communicating, the courts will generally make sure the spouse with custody has all the necessary information to guarantee health care for children.