{"id":351737,"date":"2016-04-04T10:46:00","date_gmt":"2016-04-04T15:46:00","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/family\/divorce\/divorce-effect-on-insurance-policies.html"},"modified":"2024-10-04T13:24:03","modified_gmt":"2024-10-04T18:24:03","slug":"divorce-effect-on-insurance-policies","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/family\/divorce\/divorce-effect-on-insurance-policies.html","title":{"rendered":"Insurance Coverage and Support Guarantees After Divorce"},"content":{"rendered":"\n
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Insurance Coverage and Support Guarantees After Divorce<\/h1>\n
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\n By John Mascolo, Esq.<\/a> | Legally reviewed by John Mascolo, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n

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If you’re getting a divorce, the effect on your insurance coverage could be a shock if you’re unprepared. Health, car, homeowner, and property insurance are common types of insurance that many view as marital assets.<\/p>\n\n <\/div>\n\n

For example, maintaining proper health insurance for each party is a priority in divorce proceedings. Payment of premiums for health insurance can be part of the divorce settlement<\/a>.
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This article discusses the divorce process and its effect on insurance and other benefits.<\/p>\r\n

After Divorce: Does Health Care Coverage Continue?<\/b><\/h2>\r\n

If each spouse’s employer provides group health care insurance, a divorce may mean they keep their own health insurance. If one spouse provides health insurance to both parties (and the children), things can get more complicated.<\/p>\r\n

You may be eligible to get continuing health care or COBRA coverage<\/a> through your spouse’s employer plan for a limited time after a divorce. COBRA stands for the Consolidated Omnibus Budget Reconciliation Act<\/a>. COBRA can extend health benefits when a person has a qualifying event, such as a job loss or divorce. This can give you time to look for new coverage. The U.S. Department of Labor administers COBRA.<\/p>\r\n

Premiums for COBRA benefits are often higher than those for regular employee plans. While a divorce is pending, separating couples must work out how to pay the premiums during this period.<\/p>\r\n

If you choose continuing coverage through COBRA, consider coverage options, costs, and any special enrollment period. As part of a settlement agreement, parties often assess whether a former spouse can qualify for independent coverage at the end of the COBRA-mandated period<\/a>.<\/p>\r\n

Access to affordable health insurance can be a key issue in any divorce. When reasonable health insurance is unavailable for a spouse, parties may enter into a legal separation<\/a> instead of a divorce. Under a legal separation, the parties stay married. They can continue to be under the same health insurance policy.<\/p>\r\n

Legally separated couples can still divide assets and debts and address all other issues found in a divorce. But they can’t remarry unless they convert the legal separation into a divorce.<\/p>\r\n

Sometimes, one or both spouses may want to review their Medicaid<\/a> or Medicare<\/a> benefits eligibility. Medicaid coverage will depend on their income level. Medicare becomes an option when you turn 65 or have a disability. In other situations, the spouse likely to lose health benefits may need to go on the health insurance marketplace to buy a private policy or one under the Affordable Care Act<\/a> (ACA).<\/p>\r\n

Divorcing parties can compare the cost of new health insurance for spouses who will lose coverage at divorce. Differences in premiums, deductibles, and out-of-pocket health care expenses can affect a person’s budget. It may cause adjustments to spousal support. It may change other parts of the parties’ financial settlement.<\/p>\r\n

In a divorce with children, the children’s health insurance may not need to change. The spouse providing the family plan will likely be able to continue coverage for dependent children on that plan. If the children get coverage under a Medicaid plan, the parent coordinating care may need child custody rights to keep such a plan in place.<\/p>\r\n

Life Insurance and Disability Insurance After a Divorce Settlement<\/b><\/h2>\r\n

People may carry short or long-term disability insurance<\/a> or life insurance policies as part of their retirement portfolios. Accounting for and dividing such assets equitably has become increasingly important in divorce settlements.<\/p>\r\n

This is not only because younger people are beginning to expect and provide for such needs earlier in life. Divorce can come at any time. The longer the marriage, the more spouses have relied on these assets for retirement.<\/p>\r\n

Certain life insurance<\/a> policies may have accrued cash values. These types of policies and their values must be included in the division of assets. But, getting the cash value of a policy will usually result in the termination of the coverage. It could also lead to:<\/p>\r\n