One of the most important considerations in divorce negotiations is retaining, or obtaining, health insurance for the parties and their children. Gone are the days when the non-employee spouse automatically keeps their coverage in the event of a legal separation. Some employers terminate coverage of the spouse upon date of separation; some on the date of termination of marital status.
When Divorce Mediation Group’s mediators discuss this issue with our mediation clients, the first thing they recommend is that the parties contact HR or risk management – or whatever the department may be called – that administers the healthcare coverage for the employee spouse. Only then will the parties have a clear understanding of the options available to them when reaching agreements in mediation concerning continued healthcare coverage for their family. It is extremely important they have a full understanding of WHEN COVERAGE TERMINATES FOR THE NON-EMPLOYEE SPOUSE. Without that knowledge, mediation concerning that coverage takes place in the dark.
Once a Petition for divorce is filed (and served on the Respondent), the parties are bound by the Standard Family Law Restraining Orders that appear on the back of the Summons. Specifically, as it relates to health insurance the Summons states:
Starting immediately, you and your spouse or domestic partner are restrained from: cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, automobile, and disability, held for the benefit of the parties and their minor children.
These restraining orders set the boundaries within which the parties must operate concerning any insurance policy in place at the time of filing for divorce, outside of an agreement between them to act otherwise. Divorce mediation affords the parties the luxury of designing a healthcare plan that fits their family’s needs and budget, in- or outside of the restraining orders. Some of our mediation clients agree that neither will cover the other’s insurance needs; some decide that one party will cover the other for a limited time after the termination of the marital status, or until the other spouse is able to obtain insurance through their employer; some agree that the parent with the best employer coverage will cover the kids and the other will foot the bill for the co-pays. The possibilities are endless in mediation.
Some common questions about health insurance are detailed below. Fortunately, there are succinct answers available from at least two great resources. Wife.org features a Q&A section by San Diego’s Ginita Wall, CPA, CFP, and Michelle Sacks Lowenstein, CLS-F. There is also a very informative article on WomansDivorce.com that tackles almost any divorce-related health insurance scenario you could think of. For example, questions include:
"Can I stay on my Husband’s insurance if we get a legal separation instead of a divorce?"
"Can my wife’s insurance drop me if we’re separated?"
"Do I have to keep my spouse on my insurance if we have filed for divorce but we’re still legally married?"
"What happens if my spouse takes me off of her policy without my permission before the divorce is final?"
"What if my employer won’t cover my spouse after we’re divorced but I still want to make sure she’s covered? Can I just give her more spousal support?"
"What happens if I’m pregnant when our divorce is final? Does my husband still have to pay for my insurance until the baby is born?"
"What’s COBRA and how do I know if I can get it?"
"What happens if my ex-husband doesn’t tell his employer that we’re divorced and keeps me on his insurance?"
As always, before entering into any agreement, it is recommended to seek the advice of a divorce professional to understand the rights and obligations of the parties to a divorce. An experienced divorce mediator, attorney, Certified Divorce Financial Analyst, CPA or Certified Financial Planner are trained to understand the laws and long-term effects surrounding health insurance decisions.