It is common in many marriages and partnerships for one spouse or partner to maintain the medical insurance for the entire family through their employer-sponsored plan. This happens for a variety of reasons: there is a spouse that does not work, or whose employer does not offer health insurance benefits, or one of the spouses has cheaper premiums or higher quality coverage than the other.
Whatever the case, if a divorce, dissolution of registered partnership or even a legal separation happens, this arrangement can change, causing one of the parties to lose insurance coverage. Here are some things you need to know if this happens to you.
What happens if a petition for divorce or legal separation has been filed?
Generally, once a person files for divorce or legal separation or has been served with a petition for divorce or legal separation, specific orders automatically go into effect restraining the spouses or partners from altering any insurance coverage, including canceling existing health insurance benefits. However, these orders generally only remain in effect until the final judgment is entered, the petition is dismissed, or until further order of the court.
When my divorce or legal separation or dissolution becomes final, what happens if I’m on my spouse’s or partner's health insurance?
A judgment of dissolution, or a judgment of legal separation, 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 as a dependent. 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.
Can an ex-spouse keep their existing health insurance coverage after the divorce or legal separation is finalized?
There are some options, under Federal and Oregon law, that may enable you to continue your existing coverage.
- For a divorced spouse under Federal law, commonly known as COBRA.
- For a divorced spouse under Oregon continuation law, when COBRA does not provide for continued coverage.
- For a divorced or legally separated spouse who is 55 years of age or older.
If they choose one of these options will they have a lapse in coverage?
No, if they follow the rules, their coverage will continue, unbroken, from the old insurance coverage to the new insurance coverage.
What is COBRA and how does it work?
COBRA, otherwise known as the Consolidated Omnibus Budget Reconciliation Act of 1985, ensures the right to continued health insurance coverage following a dissolution of marriage or legal separation for non-employee spouses on the occurrence of specific events that would otherwise result in termination or reduction of their plan benefits. COBRA generally only covers employees of companies that have 20 or more employees and covers ex-spouses, but not registered domestic partners. The insurance is limited to 36 months and must be applied for within 60 days of entry of the judgment of dissolution or legal separation. The ex-spouse's employer is not required to subsidize the coverage, which is a factor that should be considered in deciding whether to go the route.
If the employer isn’t COBRA size, is that where the Oregon continuation of coverage can help?
Yes, Oregon provides a continuation of coverage benefits similar to COBRA's for a divorced or legally separated spouse. This coverage is available to individuals who are not currently offered continuation coverage under the COBRA program. They may continue their existing group coverage once they are divorced for up to nine months through the Oregon Continuation Plan. They must elect to continue and pay for the group coverage and follow the rules on how and when to sign up. And, like COBRA, the ex-spouse's employer is not required to subsidize the coverage, which is a factor that should be considered in deciding whether to go that route.
How does coverage for divorced spouses who are 55+ when they get divorced work?
If a divorced or legally separated spouse is 55 years of age or older when the dissolution or legal separation occurs, they may continue their existing group coverage until they obtain other group coverage or become eligible for Medicare. To take advantage of this, they need to notify the group health insurance plan administrator in writing of the dissolution or legal separation within 60 days of the entry of the decree of divorce or legal separation. They must also elect to continue and pay for the group coverage. However, this applies only if their coverage is provided through an employer who employs 20 or more employees or if their coverage is provided by a group health insurance plan that covers 20 or more employees.
Talking about Medicare, can that be an option?
It can. A person will generally qualify for Medicare at the age of 65 if they worked for the equivalent of 10 years and qualify for Social Security. If they do not have 10 years of work history but were married for at least 10 years to someone who does qualify for Medicare, they also may qualify through their former spouse’s benefits. The Social Security Administration requires a divorced person to meet specific criteria to qualify for Medicare benefits from a divorce.
- The divorced person’s ex-spouse is at least 62 years old and eligible for Social Security.
- The divorced person must be currently unmarried.
- The divorced person is at least 65 years old.
- The divorced person was married for 10 or more years.
And qualifying for Medicare through a divorce includes all the benefits, some free and some that require payment, including:
- Medicare Part A (Hospital Insurance) is free if 40 quarter have been worked.
- Medicare Part B (Medical Insurance) costs an extra monthly premium based on income.
- Part C, is also known as a Medicare Advantage plan. These can cover doctors and prescription drugs and may or may not have a monthly premium, depending on the plan benefits.
- Medicare Part D is a Prescription Drug Plan and these plans have a monthly premium.
What are the options for an ex-spouse to get their own insurance, without relying on COBRA, Oregon continuation or Medicare?
For someone who is employed but the family was getting their health insurance through their spouse’s group insurance, they can sign up for insurance with their own employer. While usually, they could only sign up once a year on their employer’s health insurance plan, there are special enrollment periods for certain life-changing events, such as a divorce or legal separation. Depending on each of the employers’ benefits and premiums, this may be a more cost-effective alternative to COBRA insurance.
They can purchase individual insurance with an insurance company, or sign up through the affordable care act, which provides people with subsidies that lower the cost for families based on their household income. And also like group insurance plans, these individual plans have an annual signup period and a special enrollment period for people having qualifying events, such as a divorce or legal separation, in the past 60 days or expect to lose coverage in the next 60 days.
Under the ACA, divorcing may save money for both spouses through subsidies on their policies. In many cases, the couple, who may not qualify for the subsidies as a married couple, will, post-divorce, each qualify for subsidies. In addition, since ACA’s base premium rates are based on a person’s age, depending on a person’s age, they may save even more than being on a group plan or a COBRA plan.
If you have further questions for one of our attorneys about the relationship between health insurance and divorce, don’t hesitate to get in touch. You can call us at (503) 227-0200 to set up your free consultation today.