There are many things to consider at the time of a divorce: e.g., where will the children live, how will the two of you share time with them, who will get what personal property, and what will become of the home the family lived in. Will one of you continue to live in it, or will you sell it so there is enough money to provide housing for both of you?
Another issue to consider is who will provide medical and life insurance to whom. In almost all cases, the court will require you to provide health and dental insurance for the children if you were the one who provided it prior to the divorce. If you are a primary economic provider for your children or for a spouse’s alimony, the judge may also require you to obtain and maintain life insurance to cover your children’s and your ex-spouse’s needs.
Many people have medical and life insurance coverage through work. If that is your situation, it’s a good start. But will it be enough? If your children are young, perhaps the amount of life insurance you currently have won’t be enough to get them up to raise all of them to age 18. There may well be additional expenses to plan for beyond their reaching adulthood – for example, college costs including room, board, and tuition.
Perhaps you plan on covering their wedding expenses, or helping them make a down payment on their first home. Even if you have life insurance through your job, it is still important to sit down and decide how much insurance you should carry in total. Be sure to get copies of all insurance policies you have, including any you have through employment. You need to know how much insurance there is and verify that it is valid and enforceable.
Depending on how much support you are now providing for your children (both child support payments and any other expenditures you have or plan for outside of child support), you may want to increase the amount on your life insurance policy or buy one that is separate from your work policy.
You may want to change the beneficiaries listed on your policy, but some states do not allow you to do this while you are in the middle of a divorce. Be sure to contact a divorce attorney before you change anything.
Be aware that you are not the only person who should carry insurance. If your spouse pays part of the children’s expenses, you should demand that your spouse obtain enough life insurance to make sure your children’s needs are provided for in the case or his/her death. If you will be dependent on your ex-spouse for support and alimony you may want them to increase the amount of coverage on their policy. Make sure you get a copy of any policy where you or your children are named as beneficiaries.
How Do We Pay For Medical Insurance Coverage in a Divorce?
Health Insurance Coverage for the Children
If a couple getting divorced happens to have any children, one consideration that needs to be determined is who will provide the medical insurance coverage for those children after the divorce. The most common approach is that whichever spouse was providing coverage for the children during the marriage continues to do so after the divorce.
There are many different ways you can provide medical insurance coverage to your children and, if necessary, to your ex-spouse after a divorce. Examples include:
- Employer-sponsored plans
- Private/individual health insurance
- Affordable Care Act (Obamacare)
- Continued coverage under COBRA (or state mini-COBRA)
- Medicare
- Medicaid
- Tricare (military program)
Any additional uninsured medical expenses (such as co-pays, deductibles, and other out-of-pocket costs) must also be addressed. The most direct approach with regard to those payments is to split the cost based upon each party’s income. To do so, first determine the total amount of the combined post-divorce income, and then assign to each person their percentage of the combined income. For example, if one party’s income represents 33% of the total income, then that person can be held responsible for 33% of any uninsured medical costs.
Health Insurance Coverage for the Ex-Spouse
During the marriage, most people have health insurance coverage for both people through one of the party’s work. After the divorce, federal law (and the employment policy itself) provides that the supported spouse can no longer stay on the other spouse’s company health insurance as a dependent. In many cases, the supported spouse may eventually be able to provide medical insurance for themselves, but may not be able to do so immediately.
There is an important federal law known as the Consolidated Omnibus Budget Reconciliation Act or COBRA. COBRA demands that if the spouse who had the medical insurance through employment works at a company with 20 or more people, then federal law mandates that the ex-spouse is eligible to apply for continued coverage under the employer’s plan for 36 months. (If an employer has fewer than 20 employees, a spouse may still be able to continue coverage under state-specific mini-COBRA laws.)
A spouse will have 60 days to notify the employee’s health plan administrator that they would like to continue coverage. They will be required to pay the healthcare plan premium. As part of the alimony, the wealthier spouse could pay the COBRA monthly payments for the dependent spouse.
When the dependent spouse reaches age 65, either spouse could modify the divorce order to lower the supporting spouse’s health care payments when Medicare coverage begins.
How Should We Pay for Life Insurance After Divorce?
When you are getting a divorce you will want to check your life insurance policy to make certain it is updated to meet your current needs. Be sure to get copies of all insurance policies you have, including any you have through employment. You may want to change the beneficiaries listed on the policy, but some states do not allow you to while you are in the middle of a divorce, so be sure to contact a local divorce attorney first.
Depending on how much support you are now providing for your children (both child support payments and any other expenditures you have outside of child support), you may want to increase the amount on your life insurance policy or buy one that is separate from your work policy. If you will be dependent on your ex-spouse for support and alimony you may want them to increase the amount of coverage on their policy.
Make sure you get a copy of any policy where you or your children are named as beneficiaries. You need to know how much insurance there is, and who you would have to contact in the event your ex-spouse dies.
Should I Consult a Divorce Attorney?
Divorce is a major life change. The issue of insurance in divorce is complex and deserves serious consideration. You will probably want to consult an experienced local divorce lawyer who can make sure your interests are represented properly during the process.
An attorney will be able to notify you of your options and help you make the decisions in a way that best represents your interests. A local divorce lawyer can help you understand your legal rights, file the appropriate paperwork, and facilitate a workable separation.
