Two words are likely to strike dread in the pit of your stomach more than divorce – health insurance. Will you lose it? How can you afford it? Will your spouse have to pay for it? Will you have to pay for it? Who will pay for your children? And what if you are divorced and unemployed? These questions are, for some of my clients, reasons to steer clear of divorce – why not remain unhappily married but healthy, rather than divorced and without health insurance?
But is staying married the right answer? The best answer for each case depends on the facts and circumstances. However, for one reason or another, often the answer is, No. Ifyou are not earning as much as you did, now might be the time to divorce, when your income is lower and you have less money to give as spousal support or child support. If you lost your retirement savings in the stock market, why not divorce when you have less to share with your spouse? If everyday you dread your spouse’s biting remarks, fights, over-spending, text messages to boyfriends or nagging ones to you, etc., and everyday sucks the life out of you, or you and your children, why stay?
If health insurance is the thing holding you back, you really should have a discussion with your attorney. You may negotiate for your soon-to-be ex to pay your health insurance, and you may qualify for employer-provided, free or low cost insurance programs. You do have options! Here are the most common options:
COBRA
“COBRA” is the acronym for the Consolidated Omnibus Reconciliation Act. This was a federal overhaul of laws that included laws for private employers who provide group plan health insurance. The laws require the employer to continue to make health insurance available for employees and certain family members after the occurrence of a qualifying event. The continued health insurance is called “COBRA benefits” for short.
Not every employer needs to. COBRA applies to group health plans for employers with 20 or more employees on more than one-half of the business days in the previous calendar year.
And not every loss of insurance triggers COBRA benefits. There must be a “qualifying event.” For the employee, this means a loss of the number of hours of work or voluntary or involuntary termination (for reasons other than gross misconduct). For the employee’s spouse or children, this means, in addition to the employee’s qualifying events, divorce or legal separation, the employee’s death or the employee becoming entitled to Medicare. Moreover, the employee must be enrolled in the group health plan when the qualifying event occurs, and that plan must continue to exist while you receive COBRA benefits.
If a qualifying event occurs, you must act quickly if you believe you or your children are entitled to COBRA benefits! The group health plan beneficiary must notify the plan administrator within 60 days of the qualifying event. For example, if your spouse provides your health insurance through her employer’s group health plan and, as a result of your divorce, you will lose that health insurance coverage, you must notify the plan administrator of your divorce within 60 days of your divorce. The plan administrator has 14 days thereafter to send you an election form, which usually comes with supporting material about the plan’s costs and coverages, and you have 60 days to accept or reject the COBRA benefits. If you accept them, then you will have 45 days to pay your first premium.
The premium can be a hefty amount. Usually, unless the plan or the employer has contracted to accept less, the premium is the entire cost or up to 102% of the cost to provide the insurance to the employee. However, if your divorce occurred after September 1, 2008, you may qualify for an additional federal benefit to help pay the cost under the American Recovery and Reinvestment Act of 2009, part of the federal stimulus package that saw extensions for unemployment benefits, reinvestment into infrastructure, loans to banks and the automotive industry, and help for those in a precarious position with health insurance, like divorcing families.
The federal government maintains a call center to answer COBRA questions. For specific questions, contact your attorney and your or your spouse’s health insurance plan administrator. For general information, however, you may call a federal COBRA benefits advisor at 1-866-444-EBSA .
Medicaid
Medicaid provides health insurance to certain low-income adults and families and all children living below the federal poverty level. It is a program funded partly with state money and partly with federal money, and each state administers it under that state’s eligibility requirements. While poverty is a key requirement, poverty along is insufficient; the applicant or the applicant’s family must fall within one of the state-specified categories of recipients, which include individuals who are pregnant, disabled, of a specified age, severely poor and a US citizen or a lawfully admitted immigrant. Each state’s application and program requirements are different. Therefore, you should contact your department of community health to learn what requirements apply in your state.
If you or your children qualify, Medicaid could pay for preventive care, screening and treatment of health conditions and diseases, medications, physician visits, hospital visits and dental and vision services.
To learn more about the Medicaid services in your state, contact your community health department, a hospital client account department (they will have Medicaid information and applications for you, but, beware, they cannot provide legal advice), or the federal Medicaid call center at 1-877-543-7669.
CHIP
But what if COBRA benefits are too expensive and you and your children do not qualify for Medicaid? Until you can afford health insurance for your family or your employer provides it as a benefit of employment, apply for CHIP for your children and consider purchasing private health insurance for yourself.
“CHIP” is the acronym for the Children’s Health Insurance Program. The program started in 1997 as a partnership between the federal government and the states to provide low-cost health insurance for families who cannot afford COBRA benefits or private health insurance but earn too much to qualify for Medicaid. In February 2009, President Obama refunded the program. Each state determines which children are eligible, premiums, cost-sharing, administrative procedures and benefits packages. At a minimum, however, the state must pay for routine check-ups (that are always paid) and immunizations, dental, hospital care, and laboratory and x-ray services (that may come at a reduced cost).
The program is available in all states. To lean more about the program in your state and how to apply, call the federal call center at 1-877-KIDS NOW.
HEALTH INSURANCE EXCHANGE/“OBAMACARE”
If you don’t have health insurance through a job, Medicare, Medicaid, the Children’s Health Insurance Program (CHIP), or another source that provides qualifying coverage, the Marketplace can help you get covered.
•If you have job-based insurance: You can buy a plan through the Marketplace, but you’ll pay full price unless your employer’s insurance doesn’t meet certain standards. Most job-based plans do.
•If you have Medicare: You can’t switch to Marketplace insurance, supplement your coverage with a Marketplace plan, or buy a Marketplace dental plan. Learn about Medicare and the Marketplace
Your savings depend on your estimate of your expected income for the calendar year in which you enroll. Most people who apply qualify for a premium tax credit that lowers their monthly insurance bill. Some also save on out-of-pocket costs like deductibles and copayments. Coverage extends to preexisting conditions, preventive care and “essential health benefits,” including checkups, ER visits, labs, rehabilitation and prescriptions. Dental coverage is also an option.
Before your divorce, use the health insurance available to you! (Strategically, I recommend my clients do this before we file for divorce so that any debts for co-pays, lab costs, etc., are more likely to be treated as marital debt to be divided between the spouses, rather than separate debt to be foisted on one party) Go to that annual check up. Fill your prescriptions. Have your eyes examined and your teeth cleaned. If a serious surgery is in your future, seriously consider when and why you will divorce. Talk to your doctors about your immediate and future health needs, what insurance to obtain and whether low-cost substitutes (e.g., a generic medicine) are available to you.
Just staying married may not be the healthiest choice. A man stopped to my office recently ashen, sluggish and in pain. He was tall, average weight and middle-aged, but he looked like an old man, like something out of a Dickens novel, with years of an unhappy marriage weighing him down. He told me he stayed married for his four children’s sake. They grew up to be two doctors, a vocalist and an engineer. That was 31 years ago – 31 years of walking on eggshells, as he described it – and the children have all returned to him to ask him why he stayed married so long. He lamented that he missed out on a lot of happiness in his life, and, had he known his children would have supported a divorce, he would have divorced his wife sooner. Now, he has stress ulcers, high blood pressure and chronic heartburn. He swears they are related to his marriage – and he even asked if he could sue for “pain and suffering.” (This short answer is, usually, no.)
But he makes a point – it is not always best to stay married for health insurance. You do have options.