The Brave New World of Health Insurance and Divorce


Health insurance – Obamacare – The Affordable Care Act (ACA) – is a very hot issue.  Despite the newsworthiness of the topic, health insurance has always been a very big issue in divorces because upon divorce, the existing insurance arrangements can be lost.  With the new laws, things may be improving, but time will tell.

The Group Insurance

If a spouse is a dependent on a group insurance plan, then upon divorce the dependent spouse’s insurance coverage is terminated.  The dependent spouse has always had the right to continue their existing coverage under the federal law known as COBRA, but this can only last for 36 months and has always been very expensive.  COBRA continues to be available in this new era of health insurance, but under the ACA, insurance coverage may now be possible without the use of COBRA.  If a guaranteed issue policy is obtained under the ACA, then there is no fear of coverage terminating in 36 months as there would be with COBRA.

The Private Insurance

If a spouse is a dependent on a private insurance policy, then upon divorce, insurance companies continue to allow the dependent spouse to divide off the plan (i.e., have their own separate policy) with the same coverage as previously existed.  Despite this ease of insurance, the dependent spouse may still want to explore a guaranteed issue policy under the ACA, as the premiums may be less and the benefits better

This is a brave new world with regard to health insurance.  For the dependent spouse in divorcing situations, this previously very big concern may be a little less of a concern under the ACA.  Given the new laws and unknowns, it is critical that individuals facing the loss of their existing health insurance consult with a certified CoverCA insurance agent.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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