While experiencing the upheaval of separation and divorce, most people are swept up in the emotional challenge of just trying to make it through. At the same time, you can’t push aside the business of life, and divorce forces us to make many logistical decisions.
One crucial decision people face during divorce is sorting out how their health insurance will change as a result of the dissolution of their legal marriage. If you’re faced with a change in insurance coverage because of divorce, don’t delay in investigating your options. In the worst-case scenario, you may lack coverage just when you need care for an illness or injury.
What happens to health insurance during a divorce
If you receive health insurance from your employer, your plan and coverage will not change when you get divorced. If your ex-spouse receives coverage through your health insurance plan, you must notify your health insurance company that your divorce has taken place.
Health insurance plans include coverage upon divorce, so people covered under their spouse’s plan should anticipate a termination of coverage when their divorce is legally finalized. You should be able to maintain your normal health insurance while your divorce is being mediated or litigated, as long as your spouse doesn’t change jobs.
Children covered under one parent’s health insurance plan should not experience a lapse in or termination of coverage as a result of their parents’ legal divorce settlement. However, changes in residence and other life situations may create questions about which parent’s health plan is now best to cover the children.
How to prepare yourself for what comes next
Establishing your own health insurance policy can feel daunting, especially if you have shared a policy with your spouse for many years. You may be tempted to push this task to the bottom of your divorce to-do list.
However, the rules around health insurance are strict, and you cannot delay in shopping for and securing a policy of your own to start before or on the date of your divorce. You should not risk going without health insurance.
Health insurance companies belong to an industry regulated by federal and state governments and are required to offer you options when your policy is terminated due to divorce.
Here’s the process:
When your marriage becomes legally dissolved, you must notify the insurance company within 30 days to request continuing coverage. You may contact the insurance company before this happens, to investigate details of continued coverage plans. Failing to notify the employer and company within 30 days will disqualify you from continuing coverage.
Within 15 days of your notification, the insurance company will send you information by certified mail that details your options for continuing your coverage.
Common options for continued insurance coverage after divorce
COBRA: As mandated by federal law, insurance companies must offer a continuation of coverage for people within their group plan who are divorcing a spouse receiving. It reflects the same policy coverage but typically costs much more. Companies are not required to contribute to COBRA premium costs, so you’re responsible for the entire payment.
COBRA coverage is only mandated for companies with insurance plans including 20 or more people. The coverage lasts for a maximum of three years, at which time you would have to find your own plan.
Illinois Continuation Coverage: Because COBRA coverage is only federally mandated for larger employer plans, Illinois has its own mandates for smaller group plans. The Illinois Spousal Continuation Coverage Law requires employers that offer group health insurance to provide continued coverage in case of divorce.
The Illinois Spousal Continuation Law mandates that employers who offer group insurance provide continuation of coverage to spouses who are covered under an employee policy at the time of their divorce. This also covers dependent children who are also covered under the employee policy. Like COBRA, you are responsible for the entire premium payment, with no employer contribution.
Important note: Illinois Spousal Continuation Coverage does not apply to self-insured health and welfare benefit plans, such as union plans.
Illinois Spousal Continuation Coverage can last for a maximum of two years, at which time you must find your own health insurance plan. The coverage automatically terminates if you find insurance elsewhere, if you remarry, or if your ex-spouse leaves the job and group plan where you’re covered.
If the above options are not available or just to simply compare prices, you will also want to contact a health insurance broker to determine what options you have available through marketplace health insurance plans. There also may be an option for you to obtain coverage under a short-term health insurance plan in certain circumstances.
For More Information
To learn more about how divorce can affect your health insurance coverage, contact Sterk Family Law Group at (815) 600-8950 .