What Happens to Your Health Insurance in a Divorce or Legal Separation?

When you are preparing for a divorce or a separation in New Jersey, health insurance is as important as dividing property or settling custody. If you have been covered as a family member on your spouse’s employer plan in particular, you need to find out ahead of time how long that coverage lasts after the divorce, and when you have to apply for new coverage.

The first thing to understand is that separation and legal divorce do not always mean the same thing where health insurance is concerned. Simply beginning to live apart does not automatically create a Special Enrollment Period for the Marketplace. Generally, you can use a Special Enrollment Period when a divorce or legal separation causes you to lose your existing health coverage. HealthCare.gov likewise lists losing health coverage in connection with a divorce or legal separation as a qualifying reason for special enrollment. (HealthCare.gov)

So if you are covered on a spouse’s employer plan, the single most important step is to contact the insurance company or the employer’s HR department first and confirm exactly when your coverage ends. You need the precise termination date to avoid missing the window for applying for new coverage.

New Jersey residents apply for Marketplace coverage through Get Covered New Jersey, the state-run marketplace — not through the federal HealthCare.gov. There you can enter your household composition and expected income and see what premium assistance you qualify for and which plans are available to you. (Get Covered New Jersey)

If a divorce or legal separation has caused you to lose your existing coverage, you can apply for a new Marketplace plan through a Special Enrollment Period. You can generally apply during a set window before and after the loss of coverage, so it is best not to wait until the last day. During the application you may also be asked for documents proving the divorce or legal separation and the end of your prior coverage.

Income and tax filing matter a great deal here. After a divorce, your household composition and your expected annual income can both change, which means your Marketplace premium assistance can change too. Rather than entering your pre-divorce income, you need to calculate your expected income for that coverage year accurately.

If you are losing coverage from a spouse’s employer plan, COBRA is another option. COBRA lets you stay on the existing employer plan for a period of time, and in the case of divorce or legal separation you can generally continue for up to 36 months. The catch is that you take on the portion the employer had been paying, which can make it quite expensive — COBRA can generally be billed at up to 102% of the total premium. (Department of Labor)

So if you absolutely need to keep seeing your current doctors or hospital, look closely at COBRA; if lowering your premium is the priority, compare it against the Marketplace plans on Get Covered New Jersey.

If you have children, check their coverage separately. You need to work out which parent’s employer plan the children will be on, and confirm what the court order or the divorce agreement says about who is responsible for their insurance. Sometimes a child’s coverage has to change at the same time as a parent’s, so it is safest to sort this out alongside the divorce process itself.

The most important thing is not to start looking into this after your coverage has already lapsed. If you are preparing for a divorce or legal separation, compare the likelihood your current coverage ends, the exact end date, the cost of COBRA, and the premiums and subsidies available through Get Covered New Jersey — all in advance.

Health insurance is easy to forget in the middle of a divorce, but medical bills do not wait. If you have treatment scheduled or you take medication regularly, it is especially important to prepare so that no gap in coverage opens up.

If you are facing a divorce or separation in New Jersey, the safest approach is to confirm when your current coverage ends first, and then compare Get Covered New Jersey against COBRA to choose the coverage that fits your situation.