Health Insurance and Divorce

“What impact will my divorce have on my health insurance?”

Insurance expenses can change dramatically post-divorce so it is important to contact your insurance company as soon as possible to understand how your coverage will change and what the cost will be.

If you were previously covered under your spouse’s insurance plan through his/her employer, your coverage will most likely terminate as of the date of divorce. You may qualify for COBRA under the same plan, but, you will need to note the timeline for coverage under COBRA as it may only be available for a certain number of months. Regardless, the cost of COBRA may be substantially more than your family policy because your former spouse’s employer may not provide any support for the continuation of your coverage under COBRA.

If children are involved, they may continue to be covered under the plan regardless of the divorce, but your spouse would be responsible for including them on his dependent coverage request and responsible for paying for their coverage.

If you have pre-existing conditions, the process may be further complicated and it is critical to report these pre-existing conditions to an agent who might be quoting the cost of a health insurance policy and also to any insurer with whom you apply for coverage. Most policies contain coverage restrictions that may allow the insurer to deny coverage or to drop you from coverage if you do not properly disclose pre-existing conditions.

Regardless, it is advisable to get a quote from an independent company. It is possible that individual policies may be cheaper than coverage under COBRA policies. But, this could be negated due restrictions regarding pre-existing conditions.

Health insurance continues to be one of the hot buttons for anyone contemplating divorce. I recommend that you consult an insurance professional or a financial professional who has the proper experience to exploring alternatives with you.

Brandi Ruffalo is a financial divorce advisor with Valuation & Forensic Partners, LLC in Chicago and Schaumburg in Illinois. She specializes in basic lifestyle and financial analyses to the valuation of private businesses or stock option.