Divorce in New York can have significant implications for health insurance coverage, affecting both the spouse who provides the insurance and the one who relies on it. Understanding how health insurance is impacted by divorce is crucial for both parties to ensure continued coverage and avoid unexpected expenses. Here's what you need to know about health insurance and divorce in New York:
1. Impact on Spousal Coverage
In most cases, when a couple divorces, the spouse who was covered under the other spouse’s employer-sponsored health insurance plan will lose that coverage. Under New York law, once a divorce is finalized, the ex-spouse is no longer eligible to stay on the employee’s health insurance plan. This loss of coverage can create a significant challenge, particularly if the ex-spouse has no other means of obtaining health insurance.
2. COBRA Coverage
One option for the spouse losing coverage is the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows an ex-spouse to continue their health insurance coverage under the same plan for up to 36 months after the divorce. However, the ex-spouse is responsible for paying the full premium, including any portion that was previously covered by the employer, plus a small administrative fee.
COBRA can be a costly option, as the premiums are often much higher than what the spouse paid while married. Despite the cost, it provides a temporary solution that ensures continued coverage, giving the ex-spouse time to find alternative health insurance.
3. New York State Continuation Coverage
In addition to COBRA, New York State has its own continuation coverage laws that may extend beyond the federal COBRA requirements. Known as "mini-COBRA," New York's continuation coverage also allows for the extension of health insurance for up to 36 months. This option is available for those covered by employers with fewer than 20 employees, who are not covered under federal COBRA.
4. Alternatives to COBRA
For those unable or unwilling to pay the high costs associated with COBRA, there are other alternatives:
Affordable Care Act (ACA) Marketplace: The ACA provides a marketplace where individuals can purchase health insurance plans. Divorce is considered a qualifying life event, allowing the ex-spouse to enroll in a new health plan outside of the regular open enrollment period. Depending on their income, the ex-spouse may be eligible for subsidies to help reduce the cost of premiums.
Medicaid: If the ex-spouse’s income falls below certain thresholds, they may qualify for Medicaid, a government-sponsored health insurance program for low-income individuals. New York State offers a comprehensive Medicaid program that provides coverage for a wide range of medical services.
Private Health Insurance: The ex-spouse may choose to purchase a private health insurance plan directly from an insurance provider. While potentially more expensive than an employer-sponsored plan, this option provides flexibility in choosing coverage that best meets their needs.
5. Health Insurance for Children
Divorce can also affect health insurance coverage for children. In New York, both parents are responsible for providing health insurance for their children, either through employer-sponsored plans, state programs, or private insurance. The court may order one parent to provide health insurance for the children or require both parents to share the cost. If neither parent has access to employer-sponsored insurance, the children may be eligible for coverage through New York’s Child Health Plus program or Medicaid.
6. Addressing Health Insurance in Divorce Agreements
It’s important to address health insurance issues in the divorce agreement. This includes specifying who will be responsible for maintaining health insurance for any children and detailing how the ex-spouse will manage their health insurance needs post-divorce. Including these provisions in the divorce settlement can help avoid disputes and ensure that both parties understand their responsibilities.
7. Final Thoughts
Divorce in New York brings significant changes to health insurance coverage, especially for the spouse who was reliant on their partner’s employer-sponsored plan. Understanding the options available, such as COBRA, ACA marketplace plans, or Medicaid, is essential to maintaining health coverage after divorce. It’s advisable to carefully plan for health insurance needs during the divorce process and to seek legal advice to ensure all necessary steps are taken to protect both parties and any children involved.
