What To Do About Health Insurance When You Get Divorced
If you’re preparing to go through a divorce, chances are you have a million and one questions. One thing you might be especially curious about is what to do about health insurance. If you and your soon-to-be ex-partner are on the same health insurance plan, that can definitely play into your uncertainty about what life will look like after the divorce is finalized.
Health insurance and divorce; what to know
First things first, it’s important that you know and understand the laws surrounding health insurance and divorce in your state. In some cases, once a divorce is finalized, the state no longer recognizes your ex-partner as a spouse and therefore is no longer eligible to be on an insurance plan through a spouse’s employer.
In Texas, there is a law that allows ex-spouses to continue receiving medical insurance coverage through an ex-spouse’s insurance plan. These benefits are only available for 36 months following the finalization of the divorce. This law is also only specific to COBRA medical insurance benefits.
It’s also important that you know what is and isn’t allowed in regard to removing a spouse from medical benefits during the divorce proceedings. In Texas, you cannot remove a spouse from your medical benefits while the divorce is still pending. The only exception to this rule is if your soon-to-be ex-spouse voluntarily secures an independent plan on their own prior to the divorce becoming finalized.
Understanding coverage eligibility and enrollment
Open enrollment for health insurance coverage benefits happens annually, typically in the fall. This is the period of time in which you can make important coverage decisions for the upcoming year. However, should you have a qualifying life event that occurs outside of the open enrollment period, you would be eligible to establish coverage immediately.
Qualifying life events typically include (but are not limited to) becoming newly married or divorced, having or adopting a child, losing health coverage, or the death of the insurer.
There are plans available of all shapes and sizes. It’s vital that you know and understand your coverage needs and budget. If you are intending to secure an independent plan following your divorce, bear in mind that insurance plans provided through an employer are often subsidized. This means that while you may or may not have an out-of-pocket premium expense, the employer is subsidizing your cost significantly. An independent plan may be more out-of-pocket for the premium, may have a higher deductible, and may not include the same comprehensive coverage of your previous plan. If you feel exceptionally lost while navigating your options, working with an insurance broker is always an option. Brokers typically offer guidance at no cost to you. They are traditionally compensated through a commission from whichever provider you choose.