Holding on to Health Insurance During Divorce in California

August 10, 2012

A decision to initiate the divorce process can depend on many factors, including a person's awareness of his or her legal rights. Depending on a couple's circumstances, complex factors may come into play that cause a spouse to worry about his or her financial independence.

The ability to retain health insurance coverage through divorce or legal separation is a common concern of family law clients. Many spouses who are covered by their husband's or wife's employer-provided medical benefits policy are naturally concerned about their options after the divorce is final.

For that reason, some couples may choose to separate for a year or two before formally divorcing. This allows the spouses to address issues of custody and support while allowing the otherwise uninsured spouse to retain coverage with no new financial burdens. A California divorce attorney can explain whether this option makes sense based on the unique circumstances of each relationship.

Divorcing spouses should also understand their rights under the COBRA Act, which provides for the temporary continuation of health coverage at group rates to former employees, retirees and their spouses, as well as former spouses and dependent children. The U.S. Department of Labor recognizes both divorce and legal separation as qualifying events for COBRA coverage. COBRA coverage is generally more expensive than the employee's share of monthly premiums, but it tends to be cheaper than purchasing private health insurance. An option often explored is a high-deductible plan.

Ultimately, many couples will negotiate a spousal support or property settlement that takes into account one spouse's future need to pay health insurance premiums. A divorce lawyer can help a client assess every important detail regarding such decisions, including the shifting costs of health care coverage due to the Affordable Care Act and other factors.

A host of related questions can arise after divorce that might require a spouse to seek a modification of the divorce order. Among the many issues that can develop as circumstances change:
- What happens if an ex-spouse changes jobs and premiums or deductibles for policies that cover children rise significantly?
- How can a spouse with an existing medical condition ensure continuity of coverage after COBRA coverage expires?
- Can a new spouse's health care coverage be used to provide coverage for stepchildren that live with the other parent?

By taking all potential scenarios into account before a divorce is finalized, a family law attorney can help clients make informed choices about the terms they desire in a divorce agreement. Whether these issues are to be resolved through collaborative divorce, mediation or divorce litigation in court, acting early to obtain representation can reduce the potential for unpleasant surprises later on.

Article provided by Bartholomew & Wasznicky LLP
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