If the prospect of divorce is on your mind, you may be wondering how soon you’ll be able to remove your soon-to-be ex-spouse from your health insurance policy, or how you’ll find coverage if you’re under their plan. In short, you cannot immediately remove a spouse from your plan until a divorce is finalized. But there are many options as to what you can do after the divorce takes place.
Quick Summary
- Health insurance policies typically do not allow you to remove a spouse from your plan before you are officially divorced.
- If you find yourself without health coverage after a divorce, it’s possible to retain coverage through COBRA – a health insurance program that allows eligible individuals to continue to receive benefits after they lose access to their health insurance.
- Legal separation agreements may or may not be considered as equivalent to divorce, depending on your specific insurance provider.
- Divorce is considered a Qualifying Life Event, so you may qualify for a Special Enrollment Period if you’re looking to enroll in a new plan.
- The prospect of experiencing divorce and losing coverage may be unsettling, but there are several alternatives for healthcare, including Medicaid, employer-based coverage, or private health plans.
Is It Possible To Remove a Spouse Prior To Divorce?
Health insurance policies typically do not allow you to remove a spouse from your plan before you are officially divorced. Even if you are separated and living apart, a soon to be ex-spouse cannot be removed until there is documentation of the divorce, such as a court order or divorce decree. One reason is because a change in your health plan requires proof of a change in circumstances. Though you may be planning to divorce in the near future, your health plan will not reflect that change until it is official. Additionally, many health policies do not allow changes in the middle of a policy year. Client information is updated once a year during the enrollment cycle, so dropping your spouse from your health plan may not be an immediate option.
After a Divorce, Can a Spouse Retain Health Insurance Coverage?
Once a divorce is finalized, you can legally remove your spouse from your health policy. It is possible for the removed spouse to retain health coverage after the divorce with the help of the Consolidated Omnibus Budget Reconciliation Act (COBRA).
COBRA is a health insurance program that allows eligible individuals to continue to receive benefits after they lose access to their health insurance. It is primarily utilized by those facing a job loss, but can apply to anyone who suddenly loses their insurance, such as a divorcee. COBRA coverage is limited to a period of 18 or 36 months. The general maximum is 18 months, which gives an individual enough time to find a permanent healthcare plan. The length of this period depends on the qualifying event that led you to apply for COBRA and your individual circumstances.
What is a Possible Exception to This?
Legal separation agreements have become a popular option for spouses who no longer want to be together, but want to mitigate the financial risk that comes with divorce. Legal separation agreements resolve issues of alimony, child support or visitation, and the division of assets. A legal separation protects each spouse from any liability of the other’s financial involvements. Some health insurance companies will view this as equivalent to divorce, and will therefore allow you to remove your spouse from your policy. However, some plans may not approve the removal until there is documentation of a finalized divorce. Therefore, it’s important to check in with your insurance provider and understand the specific rules for removing a spouse.
Special Enrollment Period and Qualifying Life Events
Following a divorce, those left without an insurance plan can try to enroll in a Marketplace health plan during a Special Enrollment Period. Special Enrollment periods allow individuals or families to enroll in a health plan outside of the designated Open Enrollment period, which typically falls between November 1st and December 15th each year. To qualify for a Special Enrollment period, applicants must have recently experienced a Qualifying Life Event (QLE). These are defined as significant life changes that may have prevented you from enrolling during Open Enrollment. There are many situations that can be considered QLEs, but they each fall into one of four basic categories.
Health Insurance Loss
Suddenly losing access to healthcare is scary, but those who find themselves without insurance still have options. Health insurance loss can be caused by a job loss or a reduction in work hours, a loss of Medicare/Medicaid eligibility, or the loss of coverage through a parent’s plan if you’re turning 26 and no longer count as a dependent.
Household Changes
Household changes can have a significant impact on one’s lifestyle and general well-being. Some household changes include getting married or divorced, having a baby, or experiencing a death in your family.
Residence Change
A change in residency will affect your insurance policy and may require you to change your plan altogether. Residence changes include moving to a different county, ZIP code, or state, moving to attend school, moving between housing units or shelters, and moving between residences for work.
Unique Qualifying Life Events
There are unique life circumstances that do not fall into the aforementioned categories that still count as QLEs. Some examples of this are becoming a U.S. citizen, experiencing a sudden or drastic change in income, gaining membership in a federally recognized native tribe, or being released from prison.
Health Insurance Options After a Divorce
The prospect of experiencing divorce and losing coverage may be unsettling, but no one is without options. If you do not qualify for COBRA after a divorce, it’s possible that you may still qualify for Medicaid, employer-based coverage, or private health plans. Alternatives are always available to ensure that everyone has access to healthcare.
Medicaid
Medicaid is a public health insurance program that provides low-cost or free healthcare to low-income individuals and families. Not to be confused with Medicare, Medicaid is accessible to children, adults, and people with disabilities if they are found eligible. The Medicaid program is funded jointly by the federal government and the states. This means that each state operates its own Medicaid program within federal guidelines, and has the freedom to design and administer programs how they see fit. Because of this, Medicaid eligibility and benefits vary from state to state.
CHIP
The Children’s Health Insurance Program (CHIP) provides low-cost health coverage to families with children who are not eligible for Medicaid. It is typically reserved for families whose income is too high for Medicaid, but not high enough for a private plan. Because it works in conjunction with Medicaid, eligibility rules and benefits vary from state to state.
Private Health Insurance
Outside of the federal Marketplace, it’s possible to find a cost-sharing health insurance plan with a private insurance provider. Affordable plans are provided by private, for-profit insurance companies whose policies are required to meet the essential benefits listed by the Affordable Care Act (ACA). They can be obtained by visiting private insurer websites or with the help of brokers and agents who have experience comparing health insurance plans.
Employer-Based Coverage
Employer-based health insurance plans are selected and received through your employer. These healthcare plans are offered to eligible employees and their dependents and are required to cover essential health benefits listed by the ACA. These are accessible to members of a private company, an organization, or a union, and should be strongly considered if you’re facing health insurance loss.
Medicare Advantage
Medicare Advantage Plans, also known as Part C or MA plans, are health plans offered by private insurance companies that are Medicare-approved. MA plans are considered “all-in-one” packages, as they provide coverage for Part A (Hospital), Part B (Medical), and Part D (Prescription Drug) services. To qualify for Medicare Advantage, you must first qualify for Original Medicare.
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