What do I do about Health Insurance After Divorce?

health insurance after divorceIf you are concerned about health insurance after divorce, talk about it with your divorce attorney. Health insurance is an asset but it cannot be split evenly down the middle. The rules that govern health care following a divorce include California state law; the new Patient Protection and Affordable Care Act (ACA), aka Obamacare; a prenuptial or post-nuptial agreement; and the language of the insurance policy.

A family law attorney will listen to your unique situation and needs. A family law attorney will work with you to figure out your budget and the health care needs of you and your children. They will then assist you as needed in either litigation or mediation to get the solution that works for you.

The following are some general rules regarding health insurance following a divorce.

Spouses and Coverage

The spouse who provided health coverage for the other spouse and/or the children during the marriage can be ordered by the court to continue to do so after filing for a divorce or legal separation. There may be a time limit on such action. The coverage for a former spouse typically terminates when all issues of the dissolution proceedings conclude in a final judgment.  The cost of health insurance is a factor in determining the amount of child support.

New Rules because of ACA

The ACA mandates that divorced parents provide health insurance for their children. Generally, the non-custodial parent pays for the health insurance of the children. If the carried person’s employer does not have an affordable health care plan, the custodial parent can use the exchanges to purchase another plan. The ACA requires that insurance purchased be affordable. States have different definitions for what is affordable and it is not clear if the term “affordable” applies to the custodial parent or the parent ordered to purchase the insurance.

If both parents cannot pay for health insurance, the child will likely qualify for coverage under California’s Medicaid program or CHIP. If both parents have health insurance through their jobs, one plan is designated as primary and the other secondary. The secondary insurance pays the amount outstanding after the primary plan pays.

COBRA works for divorce

The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows a non-employed spouse to continue their health care coverage after a final decree of divorce. The coverage can be continued for up to 36 months. The premiums can be paid in monthly installments, but must be paid on time to avoid losing the coverage. Some government and church-sponsored plans are exempt from COBRA.

Costs not covered by health insurance and child support

Co-pays, deductibles, and items not covered by health insurance are child support add-ons. When the judge orders such add-ons, these are to be split equally between the parents. Reasonable uninsured health care costs for children are a mandatory add-on. See California Family Code § 4062.

When it is not reasonable for the parents to evenly split add-on expenses, the court can require the parents to divide and pay the expenses in proportion to the parents’ respective net spendable incomes. For this to be accomplished, there is a three-step process that must be followed: 1) calculate the guideline child support amount; 2) deduct the guideline child support amount from the income of the paying parent, but do not add it to the income of the receiving parent; 3) if one parent is paying spousal support to the other, deduct the amount of spousal support from the income of the paying parent and add it to the income of the receiving parent. See California Family Code § 4061(b).

Why do I need a family law attorney?

A family law attorney can help you understand your options and the costs for which you may be responsible. Custodial parents typically end up shouldering more of the immediate burdens: time off work to care for sick children and out-of-pocket expenses for children and themselves. It is important that the responsibility for health care costs of both spouses and children is split, and that health care issues do not cause extreme problems when arguing for spousal and child support.

You can avoid later disagreements and penalties regarding health care costs by having your attorney work with you in the initial stages of your divorce. Call a divorce lawyer today to discuss how to ensure your health care coverage and finances remain secure during and after your divorce.