Health Insurance

Continuing Your Health Insurance Temporarily Through COBRA

If your former spouse maintained family health coverage through a state or local government, or for a company who employed at least 20 or more employees on at least 50 percent the working days during the previous calendar year, you will be able to continue group coverage without showing that you are insurable.  The coverage in a continuation policy will be identical to your existing coverage, and it is equivalent to the coverage available to your spouse.  COBRA coverage extends for 36 months after divorce. It will terminate sooner than 36 months if you remarry or if obtain other coverage.

How Do I Get Cobra Coverage?

Then your divorce is “final”, notify the "Health Plan Administrator" by filling out an “Enrollment” or “Change-of-Policy” form.  The employer must receive notice of your divorce within 60 days after the divorce is effective.  Do not rely upon your spouse or the "Health Plan Administrator."  

1.  Call the employer

2.  Write a letter sent by certified mail to the employer (don't just call).

3.  Once on notice, the employer has 14 days to notify you of your right to elect continuation

                        coverage.

   4.  You then have 60 more days to submit an election to accept the

     continuation health insurance policy.

Only when these steps are complete does the insurance carrier make the appropriate adjustments to the premiums and policies. Individual policies are often more expensive than group policies. COBRA coverage is an attractive short term option for that reason alone. 

Cost

Cost

You will have to pay for COBRA coverage. It costs more than the group coverage available to you from most of your present and future employers. If you decide to exercise your COBRA rights, your cost for maintaining continuing coverage will be 102% of your spouse’s employer's actual cost for the insurance coverage (with no subsidy from the employer). The premium cannot exceed the 102% of the actual cost of the plan.  You have the right to pay the premiums in monthly installments. A divorced spouse is sent a separate bill by the insurance carrier. The first premium payment must be made within 45 days after the date of election of COBRA coverage. After that, premium payments are due 30 days after they are rendered and are considered “not timely” if paid later than that date. 

Term of Your COBRA Coverage

Generally, COBRA health insurance coverage will continue for upto 36 months after your divorce becomes final. In some situations, divorcing couples are willing to delay finalizing their divorce so this 36 month period will be extended to a certain age or until an event which will permit the divorcing spouse to obtain other health insurance coverage (e.g., until a time when they will qualify for Medicare or Medicaid; until a spouse is going to start a new job and will have coverage available through the new employer; until a spouse is going to remarry and will qualify under the policy of the new spouse [“passing the baton”]).  COBRA coverage will terminate before the 36 months if: (a) premium payments are not “timely made”, (b) the former spouse’s employer ceases to maintain coverage under the plan, (c) the divorced spouse obtains other health insurance coverage which does not contain any exclusion or limitation with respect to any preexisting conditions or (d) the divorced spouse becomes entitled to Medicare.

Safer Options

COBRA coverage is a useful but temporary “bridge” for people going through a divorce. If you were to be stricken with heart disease or cancer during the 36 months, you would then face the unpleasant prospect being uninsurable. Even though COBRA is available, don’t stop there. Coverage which does not terminate because of “things you cannot control” is a better solution at this point in your life. Begin to search immediately for more permanent coverage from an employer, or, if you are approaching 65, from Medicare. (Go to “Medicare.Gov”)

Ask For Health Insurance Coverage As Part Of Your Divorce Settlement

When you or your lawyer are negotiating a divorce settlement, ask that your spouse be required to maintain health insurance coverage for you after or beyond the 36 month limitation if it applies. This may not work if you can easily get health insurance coverage through your own employer. But if you're an older homemaker without access to employer-sponsored health coverage, you have a better chance of receiving this as part of your settlement. Otherwise, when the COBRA coverage terminates after 36 months, you may be denied health insurance if your health is poor (although federal law provides protections for certain pre-existing medical conditions). Arrange for your spouse to continue paying for your health insurance coverage by settlement agreement or judicial order--this solution can work in conjunction with the above solutions, with your ex-spouse covering the costs of COBRA coverage or coverage under another plan. 

Get Coverage Through Your Own Employer

If you work and if your employer offers health insurance coverage, sign up for it. Unless your spouse is paying for your health insurance coverage as part of your divorce settlement, this is probably the least expensive way for you to get health insurance. You may not want to be covered under COBRA if you can obtain health insurance through your employer, because your spouse’s employer was probably paying for all or a portion of the health insurance premium when you were married. Under COBRA, however, you will be responsible for the entire amount of the premium. (You can, and usually will, be charged 102% of the group rate.) If both parties have group coverage available through their workplaces, the spouse who is dropped from the original health coverage can immediately pick up group coverage through his or her employer without waiting for an open enrollment period. For those who do not have this option, COBRA may be their only viable choice.

Purchase An Individual Health Insurance Policy

Before you opt for COBRA coverage, check out the cost and coverage of private plans, such as Blue Cross. Compare the benefits and the cost. You may find options that are less expensive and more permanent than the COBRA coverage. In some cases, a private policy may be your only option, especially after your right to insurance under COBRA ends. However, individual health insurance, whether obtained under COBRA or through a private plan, can be quite expensive.  If you know you'll have to pay the premiums for your own health insurance, try to negotiate some form of contribution from your spouse in your divorce settlement. If you opt for private coverage, or if you want some guidance on which private plans are the best to work with, ask the staff at your doctors’ offices which plans they accept, and which ones make the most “hassle-free” payments.

Maryland Law

Maryland law requires that group health insurance plans issued or delivered in Maryland provide continuation coverage.  In some cases, this overlaps the federal law.  Unlike COBRA, Maryland law does not apply to self-insured plans.  Maryland law does apply to group health insurance plans maintained by employers having fewer than 20 employees. In some important ways, Maryland law provides more protection than the federal law.  In Maryland, continuation coverage does not terminate after 36 months. In fact, it does not terminate at the end of any fixed period of time.  It terminates only if (a) the divorced spouse becomes eligible for group or individual coverage under a group contract written on an expense incurred basis (b) becomes entitled to Medicare (c) fails to make timely premium payments or (d) remarries.  Coverage does not terminate if the insured employee remarries.

 

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