One of the biggest issues in this country is healthcare. Specifically, the cost and payment for healthcare and directly related to that, health insurance. Under most family situations at least one family member works for an employer who provides health insurance coverage for the entire family. But what happens when the family splits up and the parties go their separate ways?
Assuming the parties have children and at least one of the parties has health insurance, any children of the marriage should continue to have health insurance coverage through the insured parent’s employer plan. This is not affected by which parent has primary physical custody of any of the children or who is paying whom child support. Under Pennsylvania law, any child support order must include a provision addressing health insurance for the couple’s children. If neither of the spouses works for an employer that provides health insurance, one of the parties can apply for free or low-cost coverage for the children through Pennsylvania’s CHIP program. While spousal support orders entered after separation but before a final decree of divorce may address health insurance coverage for the financially dependent spouse, there is no such requirement after a final decree of divorce. So what happens to the health insurance coverage for a spouse without his or her own health insurance after a decree of divorce?
Obviously the best health insurance is your own through your own employer—insurance that you control. It might be that both parties in a marriage are employed but the family has decided to use the most cost-effective coverage through one of the two spouses’ employers. When the entry of the divorce decree is imminent, it is time for the spouse without coverage to notify his or her employer of the impending change in circumstance and the need to opt into the company plan. For the spouse facing divorce who has not worked for an employer offering health insurance, early in the divorce process, I encourage that person to start looking for employment offering health insurance.
Another option, at least for the short term, is what is called COBRA coverage. “COBRA” stands for Consolidated Omnibus Budget Reconciliation Act, so “COBRA” is an acronym for the federal law that created the system. Under COBRA, an employer who provides health insurance for an individual, and for whatever reason is no longer required to provide that coverage, is required to give the person facing the discontinuation of coverage the option of COBRA coverage.
The problems with COBRA coverage are that it is short-term and expensive. By short term, depending on the specific situation, it is available for 18 to 36 months. The coverage, however, is expensive; the employer can offer the same coverage the employee and family did receive, at the employer’s full cost, plus a 2% administration fee. By “full cost,” that is not what the employee pays, but what the employer pays the insurance carrier. So, if the employer contributes 50% of the cost of the coverage, and the employee pays 50% of the cost of the coverage, under COBRA the employer can charge 102% of the combined cost that both the employer and employee pay.
Some other things to know about COBRA are that the employee is supposed to let the employer know of the divorce decree within 60 days of the decree and the employer then has 14 days to notify the former spouse of the option to select COBRA. After that, the former spouse has 60 days to select COBRA. Also, COBRA is only required for employers with 20 or more employees. Finally, during those 60 days where the former spouse is deciding on COBRA, any COBRA coverage is retroactive, meaning if the former spouse starts a job within 60 days of the notification on selecting COBRA, that person can go without coverage for a period of time. If some medical issue develops during that time, that person can retroactively get COBRA coverage.
For those over 65 years of age, another healthcare option is Medicare. Many times, in a divorce situation we family law practitioners are looking for a way to fill the insurance coverage gap between the date of divorce and the uninsured spouse’s 65th birthday.
Another option for coverage is the healthcare marketplace under the Affordable Care Act, popularly known as “Obamacare.” Pennsylvania’s version is accessible through a website, Pennie.com. Through this site an individual can buy health insurance for a graduated price based on that individual’s income.
Another idea on the healthcare coverage issue is to delay entry of the divorce decree. In this scenario, the parties resolve all of the economic issues but agree to delay the request for a final divorce decree. This allows the spouse without health insurance to remain on the other spouse’s company policy for an extended period of time. Finally, and this is certainly a rare situation, but once I had a husband who owned his own company, hired his soon-to-be former spouse as an employee at no salary and with minimal responsibilities. Her only compensation was health insurance coverage. Unusual, but it got the wife to her 65th birthday and Medicare coverage.
The point here is that along with who gets the house and how to divide the retirement accounts, another issue of equally significant importance is health insurance going forward for both spouses.
[View source.]
