Divorce is a challenging time filled with many decisions, and one critical yet often overlooked topic is health insurance. Addressing your health insurance needs early—before your divorce is finalized—can save you unnecessary stress and help ensure seamless coverage. Here’s a guide to help you navigate this important aspect of post-divorce life.
Start Early
Don’t wait until the ink is dry on your divorce decree to think about health insurance. Begin exploring your options a month before your anticipated divorce finalization date. This proactive approach can ensure there’s no gap in your coverage.
Do You Need to Make Changes?
In some cases, you may not need to take any action:
- If you have insurance through your employer.
- If you’re already 65 and covered by Medicare.
However, if you’re currently covered under a policy through your spouse’s employer, it’s essential to plan for a transition.
Three Post-Divorce Health Insurance Options
- COBRA
COBRA allows you to continue your coverage under your ex-spouse’s employer plan for up to 36 months.
Pros:
- Familiarity: You retain the same plan, benefits, and doctors, minimizing disruption.
- Immediate Coverage: It’s quick and seamless, so there’s no lapse in care.
Cons:
- Cost: COBRA is often one of the more expensive options because you’re responsible for the full premium.
- Time Limit: Coverage ends after 36 months, requiring a longer-term solution.
Next Steps: Contact your ex-spouse’s HR department to confirm your eligibility, costs, and details. Many people use COBRA as a temporary solution while exploring more cost-effective options.
- Private Health Insurance
Private insurance is tailored to your specific health needs and budget, offering flexibility.
Pros:
- Customization: Plans can be designed to fit your unique medical needs.
- Wide Range of Options: Ideal for individuals with specific coverage requirements.
Cons:
- Cost: Depending on your health and other factors, private insurance may be more expensive.
- Complexity: Navigating the options can be overwhelming, so a knowledgeable health insurance agent is essential.
Next Steps: Work with a trusted health insurance agent who can guide you through the options and find the best plan for your needs.
- Affordable Care Act (ACA) Marketplace
The ACA Marketplace, or exchange, offers comprehensive coverage options that are accessible to everyone, regardless of pre-existing conditions.
Pros:
- Affordability: Subsidies may be available based on your income, potentially making this the most cost-effective option.
- Accessibility: Coverage is guaranteed regardless of health status.
- Variety: Plans are categorized into bronze, silver, gold, and platinum levels, offering flexibility in coverage and cost.
Cons:
- Enrollment Periods: Coverage is only available during specific times unless you qualify for a special enrollment period due to your divorce.
- Complexity: Without an agent to assist, navigating the ACA options can feel overwhelming.
Next Steps: Visit healthcare.gov to explore plans, or consult a professional to help you determine the best option.
Special Considerations for Families
If you have minor children, their health insurance will typically remain with the parent who is employed and currently providing coverage. This decision is often addressed as part of the divorce settlement.
Key Takeaways
- If you already have insurance through your employer or Medicare, no changes are likely needed.
- If you’re covered under your spouse’s plan, explore COBRA, private insurance, or the ACA Marketplace as potential options.
- Work with a qualified health insurance agent to navigate complex decisions and find the best coverage for your needs and budget.
Remember, we’re here to help you through this process. Don’t hesitate to reach out with any questions or concerns about your financial future during and after divorce. Take care, and prioritize your health and well-being as you embark on this new chapter.
Any opinions are those of the author, are subject to change and are not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Neither Raymond James Financial Services nor any Raymond James Financial Advisor renders advice on tax or legal issues, these matters should be discussed with the appropriate professional. Please consult with a licensed financial professional when considering your insurance options.
