I ran into a woman yesterday who said to me, “Do you know of a good health insurance company?” I immediately knew the next thing out of her mouth was going to be, “I’m getting divorced.” Sure enough it was. Health insurance after divorce is a MUST!
This is a guest blog that was written by health insurance broker, Rich Fahn and his staff at Excell Benefits. If you are going through a divorce it will be really helpful!
Health Insurance after Divorce: Tips from a Professional by Rich Fahn and the staff at Excell
Going through a divorce is one of the most emotional times in a woman’s life. On one hand, you’re devastated that the lifelong partnership you thought you’d have is now over. But on the other, your mind races with all of the things you need to arrange and finalize; not to mention stressing over how to best protect your children from the complexities that arise from divorce. And just when you feel your new life can’t get any more hectic and confusing, your divorce attorney provides you with the sharp realization that you will now be responsible for your own health insurance after divorce . Yep, that’s right. Once you are divorced, you will most likely have to get health insurance for yourself (and possibly your children).
Below are a few tips to help you make things easier when it comes to health insurance after divorce:
Tip #1: Be prepared: Research your health insurance options now
As soon as your divorce is filed, it’s time to start looking at your coverage options for yourself, and possibly, your children. Make sure your soon-to-be ex keeps you and your children enrolled on the plan for now, and decide who is responsible to pay for claims.
Tip #2: Talk to a health insurance broker
Talk to an insurance broker who specializes in health insurance. Just as you feel with your divorce attorney, make sure you feel comfortable with your insurance broker. Brokers are abundant sources of knowledge and are specifically invested in providing clients excellent benefits options.
Make sure to consult a broker who is:
- Focused on health insurance
- Licensed and credentialed
- Paid by the insurance company, so that you do not have to pay for their advice. Most time is given free.
Tip #3: Understand your options
If you are currently employed and your employer sponsors coverage, wonderful. Make sure you speak to the person responsible for handling employee benefits within your company, and tell them what’s going on. Divorce is a Qualifying Event so you can enroll on your employer’s plan within 30 days of being dropped or anytime during your open enrollment period.
If your employer does not offer health insurance or you are not currently employed; don’t panic, as you have several options. Below, we’ve mentioned the most common:
1. The first and easiest option is COBRA (Consolidated Omnibus Budget Reconciliation Act), which allows you to remain on the same plan you had with your ex. Under COBRA law, you can extend the coverage for 18 months. Note: if an employer is less than 20 employees, instead of COBRA, you may have similar access under State Continuation Rules, known as Mini COBRA. You will have 60 days after the qualifying event if you wish to elect coverage. However, a drawback to electing this coverage is that you are responsible for paying the full premium, plus a 2% administrative fee. Often people find the COBRA premium to be a shock to the wallet, so make sure you are aware of the ins and outs of COBRA before electing.
2. obtain individual health insurance. There are many plans and some are an excellent (sometimes, more affordable) alternative to COBRA. As of now, insurers (depending on your state of residence) will take your health history into consideration and there is a chance you could be denied coverage or charged higher premiums if you have a pre-existing health condition(s). Often women find this time stressful and seek therapy and are prescribed medication for anxiety and depression. This can often lead to a decline of coverage by the insurance companies.
Good news! With the Affordable Care Act (ACA), starting in 2014, insurance companies will no longer be allowed to deny coverage due to pre-existing condition(s). If you have a pre-existing condition issued prior to 1/1/2014, most states have guarantee issue options available. Stories that one cannot get coverage are usually not true.
Tip #4: Doesn’t an individual health plan provide the same benefits as a group plan?
No. Individual plans often have less expensive premiums for a reason. Benefits often have more limitations, including limited office visits, prescription drug coverage, mental health coverage, and often have additional deductibles and copayments. Lower premiums may cause you to spend more money in the long run if you have excessive claims.
Tip #5: Good coverage is too expensive, should I go without?
No! Even having a plan with a very high deductible or a catastrophic plan that is lower in cost is better than going without. By selecting a plan through a quality insurance company with a reputable network, the insured will be able to access provider discounts, meaning they will be charged the wholesale price from providers. Without coverage, you will be paying retail for doctors, prescriptions, and, worst of all, hospitals in the event of the unforeseen. Additionally, most plans cover the costs of preventive care at 100% (assuming you go to an in-network provider). Preventive care includes numerous provisions, but most notably: wellness check-ups twice a year and your annual well woman exam.
Without coverage, you may be lucky enough to remain healthy. You may pay for the occasional routine doctor visit or prescription out of pocket. However, if anything unforeseen happens, such as an accident or illness, the ensuing medical bills can—and have—literally driven individuals and families into bankruptcy, costing them everything they’ve ever worked for.
Also, with the full implementation in 2014, it will be required for individuals to have at least some form of health insurance coverage. Failure to comply will result in being fined 1% of annual income.
For more information, contact me at: rich@excellbenefit.com.
I fully endorse Rich and his staff at Excell! They are knowledgeable and have been around for a long time. Rich has extensive experience in the health insurance industry. Get in touch with him if you need to talk insurance!
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Erin
Funny how you know just what I need and just when I need to hear it.
Donna
I’ve been told by an administrator that the period for COBRA coverage for a divorced spouse is 36 months. https://www.dol.gov/general/topic/health-plans/cobra