There are numerous things to think about during a divorce, which can be a difficult period. Health insurance is one of the practical concerns you need to deal with. If you were covered under your ex-spouse’s health insurance plan during your marriage, you might be wondering what your alternatives are now that you are divorced.
In this article, we’ll look at some of the options available to you for health insurance after divorce.
COBRA
One option that you may have heard of is COBRA.
Consolidated Omnibus Budget Reconciliation Act, or COBRA, is a federal law that allows you to maintain your health insurance coverage for a short time following certain qualifying events, such as divorce. This means that even if you are no longer married to your ex-spouse, you can still maintain your health insurance coverage. However, you will be responsible for paying the entire payment as well as a modest administrative fee.
While COBRA may seem like a good option, keep in mind that it can be expensive and it can have limited coverage. The full cost of your health insurance premium can be quite high, and you will be responsible for paying it yourself. Additionally, COBRA coverage only lasts for a limited time, usually 18 months, so you will need to find another health insurance option once your COBRA coverage expires.
Employee Health Insurance Plan
If you are employed, you may be able to enroll in your employer’s health insurance plan. Most employers offer health insurance as an employee benefit, and you may be eligible to enroll in the plan outside of the regular enrollment period if you have experienced a qualifying life event, such as a divorce.
However, your employer’s health insurance plan may not be the most affordable option for you. That’s why make sure to compare the cost of the plan to other health insurance options that are available to you. You may also want to consider the level of coverage that the plan provides.
Put Insurance Into a Divorce Statement
The best option is to write down all of the details of your divorce, including any agreements you may have made regarding health insurance, in a divorce agreement or statement when you get divorced. A plan that will cover you after the divorce may be something you and your ex-spouse can agree on. This can be a good option if you are on good terms with your ex-spouse and can work together to find a solution.
Keep in mind, though, that this option may not be available to everyone. If you and your ex-spouse are not able to agree on a plan, or if you do not have a good relationship with your ex-spouse, you may need to explore other options for health insurance after divorce.
What is other health insurance after divorce?
In addition to COBRA, your employer’s health insurance plan, and putting insurance into a divorce statement, there are other options available to you for health insurance after divorce. Some of these options include:
Marketplace health insurance: You can enroll in a health insurance plan through the Health Insurance Marketplace. You may be eligible for subsidies that can reduce your monthly premium.
Medicaid: If your income is low, you may be eligible for Medicaid. Medicaid is a federal and state program that provides health insurance to people with low incomes.
Short-term health insurance: You can purchase a short-term health insurance plan that provides coverage for a limited time. These plans usually have lower premiums than other health insurance options, but they may not provide the same level of coverage.
What about Medicare?
Starting Medicare following a divorce is an important step for individuals who are at least 65 years old and were previously covered under their former spouse’s health insurance. Medicare is a federal health insurance program primarily for individuals aged 65 and older. After a divorce, it is crucial to review and reassess healthcare coverage options. Generally, individuals who meet the eligibility criteria can enroll in Medicare during the Initial Enrollment Period (IEP) which typically starts three months before their 65th birthday and lasts for seven months. It’s important to understand the different parts of Medicare, including Part A (hospital insurance) and Part B (medical insurance), and to consider additional coverage options like Medicare Advantage plans (Part C) or prescription drug coverage (Part D). Consulting with a qualified insurance professional or contacting the Social Security Administration can provide valuable guidance in navigating the process and ensuring appropriate healthcare coverage following a divorce.
Make sure to compare the cost and level of coverage of each option to find the best plan for your needs. If you need help to understand your options for health insurance after divorce, contact us! At Purposeful Wealth Advisors, we work closely with divorce attorneys, accountants, and other dedicated professionals to arrive at comprehensive solutions for our clients.
Opinions expressed are those of the author and are not necessarily those of Raymond James. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.
