Health insurance is a hot topic these days, spurred on by the passage on March 23, 2010, of the Patient Protection and Affordable Care Act (PPACA), more commonly known as Obamacare. The primary purpose of the PPACA is to reduce the number of uninsured Americans while reducing overall medical costs. On June 28, 2012, the United States Supreme Court upheld the constitutionality of the PPACA in the case, National Federation of Independent Business v. Sebelius. With all the recent developments in this area, it is important to know how health insurance coverage plays out in the divorce process.
If both you and your spouse are employed and maintained health insurance coverage through your respective employers, then maintaining that arrangement should be addressed during divorce negotiations and specifically stated in the marital settlement agreement or divorce decree. If, however, you maintain health insurance through your spouse's employer, once the divorce is finalized, you will no longer be eligible for coverage. Address the issue early on so that you do not end up with a gap in coverage, which could jeopardize your eligibility for health insurance.
There are several options available. If your spouse's employer has more than 20 employees, then you are eligible to apply for continued health insurance coverage under the federal law known as COBRA (Consolidated Omnibus Reconciliation Act), passed by Congress in 1986 to provide for the continuation of group health coverage that might otherwise be terminated. A divorced spouse may elect COBRA coverage for a maximum of 36 months, but be warned: COBRA is usually more expensive. Under COBRA, you will be responsible for the entire amount of the premium plus two percent (2%) for administrative costs.
If your spouse's company has fewer than 20 employees, a second option in the state of California is to elect coverage under the California plan know as Cal-COBRA, which is basically an extension of the federal COBRA law for California residents who do not qualify for federal coverage. Cal-COBRA is "a mini COBRA health insurance plan set up by the California government." See http://www.cobrainsurancedirect.com. You may elect Cal-COBRA for a maximum of 36 months, but it too is expensive. Under the plan, you will be responsible for the entire amount of the premium plus ten percent (10%) for administrative costs. Given the cost and time limit associated with COBRA and Cal-COBRA, you may want to check into private plans, which may be cheaper and more permanent. If you are employed, a third option may be to obtain health insurance coverage through your employer.
If children are involved, it is important to keep in mind their health insurance coverage issues, including which parent will provide coverage and who will pay the co-pays and other out-of-pocket medical expenses. Such issues should be raised during divorce settlement negotiations and made part of the marital settlement agreement or divorce decree.