Health insurance is an important issue in any divorce when at least one party is under age 65 and without means to obtain their own health insurance. It can also be a significant issue with children who have graduated from high school but have not yet entered the work force to acquire their own health insurance. Thus, there are two areas where decisions should be made regarding health insurance and divorce: your child’s coverage and your coverage. This article is a high-level overview of what to know and how to plan for coverage post-divorce.
Health Insurance, Divorce, and Children
As a parent, when do you stop supporting your children financially? Some parents believe never; others believe turning 18 ends the parental obligation, and others believe when the child graduates from college. People who are married disagree on this, so certainly people who are divorced will, too!
In a Texas divorce, minor children and the parent providing health, dental and vision insurance for minor children will be named. In a typical Texas divorce, child support and court ordered health insurance coverage ends when the child turns 18 or graduates from high school, whichever occurs later.
Currently, from an insurance company perspective a child can be protected by a parent’s insurance until they are age 26. After child support obligations are complete (again, either at age 18 or upon high school graduation), the parent can remove their child from health insurance. Even though the insurance company will allow your children to remain on your ex-spouse’s insurance plan, health coverage after high school graduation or age 18 may not fall under a family court’s jurisdiction. An ongoing parenting plan and/or a contractual agreement may benefit everyone involved. We encourage all parties to discuss how they will handle health insurance for young adult children through college and even up to age 26 during the divorce process. You’ll want to make these decisions while your attorney is present in the divorce process so you can understand what is legal and what is at least contractually enforceable.
Health Insurance, Divorce, and You
With an adult, it’s much simpler. A divorcing party must keep their spouse on their health insurance until the divorce is final – and then after finalization the ex-spouse must be removed from the policy. As an ex-spouse you cannot stay on your former spouses’ policy. However, you do have other options.
One option is to ask your attorney about extending the finalization of your actual divorce which will extend your health benefits legally. For example, we have helped couples finalize the details of their estate division with a Mediated Settlement Agreement (MSA) which finalizes the DETAILS of the divorce but doesn’t officially make you divorced. You can divide bank accounts and brokerage accounts and make agreements on how you will divide retirement accounts after the divorce with an MSA. This option can provide peace of mind in knowing who gets what (the fight is over) and a little more time to keep your health benefits at a lower cost. This option provides only a limited time period, but it can give you a few more months while you find a job with benefits or find another source of health care.
Another option is to keep your current coverage via COBRA. When going through a divorce, you can receive coverage with COBRA for 36 months. The time period for COBRA is extended to the 36-month marker because of divorce versus the traditional 18 months when you leave a company. Your soon-to-be-ex should contact the HR department for a summary of COBRA options and costs prior to divorce. You ONLY have 30 days from the date of divorce to elect COBRA.
Since you would qualify as a “change of status,” you could also shop the marketplace outside of open enrollment windows. If you’re looking for lower-cost options, you could consider health share programs such as Christian Health Ministries. Finally, insurance brokers are wonderful resources to seek when looking for individual health coverage on the open market.
Health insurance affects you and your children after a divorce and needs to be carefully considered. Take advantage of mediation so you and your soon-to-be ex-spouse can talk calmly about your children’s health insurance plans both after the divorce while child support is available and how you wish to continue their coverage into early adulthood. In addition, have a plan in place for yourself so you know your options post-decree and you aren’t caught without health insurance coverage.