Going through a divorce can be a confusing and draining process for all parties involved. Handling different types of insurance throughout this transition can pose a unique challenge, as there are many ways a divorce can affect coverage. In some cases, both parties may be able to agree to terms for how insurance will be handled. Other times, these decisions can be up to the insurance company, employers, or the Family Court judge. Researching how to navigate the challenges involved with insurance coverage is one of the best things you can do for yourself if you are going through (or about to go through) a divorce with your spouse.
One of the most overlooked parts of a divorce is how each party will proceed with their insurance policies, particularly health insurance. Many people rely on employer health benefits from a family member. When a divorce occurs, especially in the case of a family with one working parent and one non-working parent, sometimes those benefits will no longer be offered to the non-working parent. Whether this is the case depends on the benefits and the employer.
A non-working spouse going through a divorce can pursue COBRA (Consolidated Omnibus Budget Reconciliation Act) benefits for themselves. This federal law requires insurance companies to continue offering insurance to those with a qualifying event, which divorce falls under, so spouses can continue receiving benefits. However, the employer will stop paying on the spouse’s behalf, so a non-working spouse may have to explore strategies to afford these insurance costs.
Children’s Health Insurance Coverage
Children do not typically lose health insurance in the event of a divorce between their parents. Children remain eligible for health insurance coverage under one or both parents and can be enrolled in either health plan. In New York, paying for a child’s insurance falls under child support, so parents must reach an agreement on how they will contribute to the cost of health insurance.
There are two other options for finding health care for your child in New York: Children’s Medicaid and NYS Child Health Plus. Whether someone is eligible for these health insurance programs depends on their gross family income.
Existing life insurance policies are an important component of a divorce. Married people often purchase life insurance if they want to avoid any existing or potential debts or other undesirable financial situations. Even when the couple separates, these debts may remain, so it is important to take inventory of all insurance documentation and policies before divorce proceedings take place.
You and your spouse may come to an agreement on how to proceed with life insurance policies. In some cases, separated partners can still be the owners and beneficiaries of each other’s life insurance policies. Other times, for example, if you have a cash-value life insurance policy, you may decide to terminate the policy and divide the cash accordingly. However, if no agreement is reached, what happens to these life insurance policies will be decided for you by the Court.
Meet With a Divorce Attorney About Insurance Issues
If you are currently separated from your spouse or are considering filing for a divorce, finding a competent and dedicated attorney is essential. At the Colwell Law Group, LLC, our experienced attorneys have decades of combined experience handling family law matters. Speaking with an attorney is the best way to understand what may happen with your insurance policies in your divorce, so don’t hesitate to call or reach out online.