If you are going through a divorce or legal separation, you likely have given some thought to some of the big issues, including support, property division, and child custody, but have probably failed to think about your health insurance. However, the more you know about health insurance, the better prepared you will be while going through the divorce or legal separation process, and the better prepared you will be when your divorce or legal separation is finalized.
Can my spouse or partner terminate my health insurance before our legal separation or divorce is final?
No. Once you have filed for divorce or legal separation, or have been served with a Petition and Summons for divorce or legal separation, specific orders automatically go into effect restraining you and your spouse or partner from taking certain actions. These orders are called Automatic Temporary Restraining Orders (ATROs) and can be found on the second page of the family law Summons. They specifically prohibit you and your spouse or partner from altering any insurance coverage, including but not limited to, canceling existing health insurance benefits or terminating the other spouse or partner as a beneficiary of insurance.
The ATROs remain in effect until the final judgment is entered, the Petition is dismissed, or until further order of the court, whichever occurs first.
If I'm on my spouse or partner's health insurance, what will happen to it once our legal separation or divorce is final?
A judgment of dissolution generally will cause you to lose dependent status under your spouse or partner's health insurance. This means that you will no longer be eligible to be covered under your spouse or partner's health insurance plan.
Most health insurance plans treat a judgment for legal separation the same as a judgment for dissolution of marriage. This means that if you are subject to a judgment of legal separation, you are no longer the dependent of your spouse or partner for purposes of health insurance coverage. However, if your spouse or partner has a government plan, and you are subject to a judgment of legal separation, you may be able to remain a dependent on their health care coverage. It is absolutely necessary to confirm this directly with the plan.
If I'm on my spouse or partner's health insurance, what happens to my health insurance if our marital status is terminated early?
You may still be eligible for coverage under your spouse or partner's health insurance. This is because a court may, and usually does, include conditions in an order for early termination of marital status. The conditions almost always include an order that one spouse or partner maintain the existing or comparable health insurance coverage for the other party or partner or, if insurance is not maintained or obtainable, pay medical expenses that would have been covered by insurance. Fam. Code § 2337(c).
Courts do this because an order terminating marital status would erase all the benefits and rights that accrue to a former spouse or partner under the law on the basis of his or her status.
Can my existing health insurance coverage continue after our legal separation or divorce is final?
If negotiated and agreed upon, your judgment of dissolution or legal separation may require your spouse or partner to maintain your existing health insurance coverage. If it does, you should transmit to the insurer or plan a copy of your judgment, together with a notice informing the insurer or plan that its insured has been ordered to maintain your existing coverage as specified in the judgment, that you are a covered dependent of the policy, and that the insurer must send you notice of any cancellation, lapse, or change of coverage under the policy. Family Code §2051.
The notice should specifically state the following:
“Pursuant to a proceeding, In Re Marriage of ____, case number, ____ in the Superior Court of the State of California, County of ____your insured ____, has been ordered to maintain the existing health insurance coverage, policy no. ____, in force for the named beneficiaries or covered dependents as specified in the attached order or judgment.
The attached order or judgment requires you to maintain the named beneficiaries under the policy as irrevocable beneficiaries or covered dependents of the policy and you must administer the coverage accordingly, until the date specified, if any, in the order or judgment, or until the receipt of a court order, judgment, or stipulation providing other instructions.
You are further instructed to send notice to the named beneficiaries, covered dependents, or other specified persons upon any cancellation, lapse, or change of coverage, or change of designated beneficiaries under this policy.”
How do I remove my spouse or partner from my health insurance now that we have received a final judgment?
If you are the covered employee, it is your responsibility to notify the plan administrator of your divorce or legal separation within 60 days after the date of entry of judgment of your divorce or legal separation. 29 U.S.C. §1166(a)(3).
Your plans procedures for providing them with notice should be set forth in the summary plan description or in a separate notice they provided to you within 90 days after the date of which your plans coverage commenced. 29 C.F.R. §2590.606-1(b)(1)(i), (c)(3), (e).
Are there any protections available to me if I am no longer a qualified dependent on my spouse or partner's health insurance?
Some federal and state laws offer protection, including the following:
- Some group plans must offer a beneficiary who becomes disqualified because of divorce from a covered employee continued group health coverage for three years and a conversion option after that.
- Under COBRA, employers are required to make continuation health coverage available to qualified beneficiaries if a qualifying event occurs resulting in the loss of coverage. However, COBRA is not available to registered domestic partners.
- Cal-COBRA provides benefits similar to COBRA's for a divorced or legally separated spouse or partner. This coverage is available to individuals who are not currently offered continuation coverage under the COBRA program or who have exhausted continuation coverage under COBRA.
- Spouses covered by a group policy who become ineligible for coverage because of divorce must be offered a conversion plan.
- Some federal plans provide for continued health insurance for former spouses, but they have strict guidelines and deadlines for application. Therefore, it is important to investigate whether such entitlement exists.
What is COBRA?
COBRA, otherwise known as the Consolidated Omnibus Budget Reconciliation Act of 1985, is part of the Employee Retirement Income Security Act of 1971, commonly known as ERISA. The purpose of COBRA is to ensure the right to continued health insurance coverage following a dissolution of marriage or legal separation for non-employee spouses.
How does COBRA work?
COBRA requires health plans to offer continuation coverage to you or your spouse, but not registered domestic partners, on the occurrence of specific events that would otherwise result in termination or reduction of your plan benefits. ERISA §§ 601-609; 29 U.S.C §§ 1161-1169.
Under COBRA, your insurance is limited to three years and must be applied for within 60 days of entry of your judgment of dissolution or legal separation. 29 U.S.C. §§ 1162(2)(A)(iv), 1165(a)(1).
Your spouse's employer is not required to subsidize your insurance but rather can charge you 102 percent of the cost. 29 U.S.C. § 1162(3). This enhanced cost, as well as the cost of nonsubsidized health insurance after COBRA coverage ends, is a factor that should be considered in your post-dissolution needs.
If you are the covered employee, it is important to notify your employer of the entry of your dissolution or legal separation judgment so that the commencement of your spouse's eligibility for COBRA coverage can be triggered.