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How divorce affects your health insurance

Dealing with your health insurance company is probably not at the top of your "to do" list if you're going through a divorce, but it's necessary — especially when it comes to issues regarding children.

Divorce under a group health insurance policy

health insurance after divorceLet's suppose a couple insured on the husband's group policy files for divorce and the wife needs to be removed from her husband's health plan. The husband should inform his employer or health plan administrator of the change, most likely by filling out an enrollment or change-of-policy form. The form is then forwarded to the health insurance provider, who makes the appropriate adjustments to the policy.

For more on divorce and insurance, read why getting a divorce changes your insurance needs.

COBRA guarantees, in this example, that the wife can buy 36 months of health coverage through her ex-husband's group health plan. When a husband notifies his employer of the divorce, the employer will send notices to the family members on the policy, informing them of their right to COBRA coverage (it's important to know your COBRA rights).

Since COBRA benefits are meant to be short-term, the wife should consider securing another health insurance policy. In addition, 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.

Divorce under an individual health insurance policy

Individual health policies work much the same way. When your divorce is finalized, you'll have to notify your insurance carrier and your employer will terminate the policy you and your ex-spouse shared. Both of you will then have to re-enroll or buy health insurance coverage from another provider.

If you and your ex-spouse decide to stick with the same insurance company, it will issue two separate policies after the application process is complete.

The COBRA law does not apply to individual health policies.

Health insurance coverage for children

Your children will be covered by either you or your ex-spouse's insurance provider, or both. A group policy will typically be used before an individual policy to cover the children.

Also keep in mind most HMOs are not national health care providers; they're limited to regional networks of providers. This can complicate your children's health insurance. Your children might still be insured by your spouse's policy, but if you and the children move outside the HMO's service area, coverage for your children will be limited to emergency care only.

No reason to keep double health insurance coverage for children

Individual policies are so expensive that adding dependents to one when the other parent has a group policy is a costly decision. This is not a good idea if you’re searching for affordable health insurance. There's no reason for you, with a group health plan, and your wife, with an individual plan, to both name your children as dependents.

Here are tips for single parents whose children lack health insurance.

By the same logic, it doesn't make sense to name children on both group plans and pay for two separate family plans. If you can work through these issues amicably, the two of you should decide which group plan offers the best benefits for your children. Remember that notices about changes in benefits and rules will be mailed to the parent who holds that plan, even if the other parent has custody.

If you and your spouse aren't communicating, the courts will generally make sure the spouse with custody has all the necessary information to guarantee health insurance for the children.

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