One of the biggest concerns for people going through divorce is losing health insurance. The Affordable Care Act (aka “Obamacare”) significantly changed the way health insurance is dealt with in divorce. In short, the Affordable Care Act makes it much easier to obtain health insurance coverage after you go through divorce. Here are the basics that you need to know:
Open Enrollment. Open Enrollment is the period of time when you have to apply for health insurance unless an exception applies (called a “special enrollment period”). The open enrollment period for 2016 is November 1, 2015 through January 31, 2016.
Special Enrollment Period. You can apply for health insurance during a “special enrollment period” if you have 1) a qualifying life event or 2) other complicated situation.
Qualifying Life Event. There are many different qualifying events. The one that most commonly applies in a family law situation is divorce. Other qualifying life events that may occur during the divorce process include loss of job, loss of health insurance coverage or significant reduction in income. If you do not qualify under one of these scenarios, you should determine if there are other qualifying life events that may apply in your situation. If you are not eligible under a qualifying life event, then you should determine whether you can apply as a “complicated situation.”
Complicated Situation. If you have a particularly complicated situation but do not have a “qualifying life event”, you should discuss your circumstances with a health insurance broker or other HealthCare.gov worker. Your circumstances may still qualify you for a special enrollment period. Domestic abuse and spousal abandonment are two situations which may qualify as a complicated situation. There are potentially other situations which may qualify you as well.
COBRA. COBRA is a federal law which was the basis for maintaining health insurance after divorce prior to the passage of the Affordable Care Act. COBRA allows you to maintain the same health insurance plan you have had for up to 36 months. However, COBRA is often expensive and does not apply in all situations (e.g., the employer must have at least 20 employees). COBRA may still be a good option if you need to maintain your specific health insurance plan.
Tip: You may be eligible for COBRA through your soon-to-be-ex’s employer and a private policy through the Affordable Care Act. You should check to see how much COBRA costs and compare it to the cost of a plan through the Affordable Care Act. Cost is obviously a significant consideration, but you should also compare the level of coverage and whether your preferred healthcare providers are covered under the new plan.
Tip: You can apply for health insurance through Healthcare.gov on your own or you can work with a health insurance broker (some states run their own individual exchanges although Oregon no longer does). You do not pay a health insurance broker for their services. Health insurance brokers get paid by the insurance companies. It may make sense to work with a broker since there is no additional cost to you and they know how to navigate the health insurance system. One health insurance broker you may consider using is Portland, Oregon based Century Benefits.
End of Prior Coverage. Generally speaking you will continue to be covered under your ex-spouse’s health insurance through his or her employer through the end of the month in which the divorce is final. However, some employers will terminate coverage for a now-former spouse immediately upon learning about the divorce. It is important for the employed spouse to check with the employer before the divorce is final to learn when the ex-spouse will be removed from coverage. This information should be shared with the spouse who will be losing coverage.
Legal Separation. It is fairly common for people to get a legal separation rather than a divorce so that the former spouse can continue health insurance benefits. If you are considering a legal separation for health insurance reasons it is necessary that you check with your employer to determine whether the employer treats legally separated spouses as married or as divorced. Your employer’s HR department should be able to provide you with this information.
Summary. It is much easier to obtain health insurance after a divorce than it used to be. However, there are specific timelines that may apply to your situation. It is important that you obtain information about health insurance before you get divorced so that you have a plan for insurance once the divorce is final. You can obtain more information through OregonHealthCare.gov or HealthCare.gov.
This is only an overview. You should discuss the specifics of your situation with a health insurance broker or other health insurance professional.