When most people think of splitting the assets in divorce, they do not think about health insurance. Yet, as Fidelity so politely puts it, health insurance is a valuable asset, too.
Unlike stocks or the family home or life insurance, you cannot really divvy up health insurance. When it comes to health insurance, sharing is caring. If you worry about your health coverage post-divorce, here is what you need to know about how states make policies available to ex-spouses.
The standard scenario
In most situations, a health insurance policy stays with the primary owner. If you have health coverage at work, the policy is yours after divorce, and vice versa. If your spouse has a policy through his or her employer, he or she would remain the primary beneficiary.
However, some states do require employers to make coverage available to ex-spouses. These employers have group policies, and the law requires them to extend the offer for continued coverage for a certain amount of time.
It is not uncommon these days for employers to forego health coverage entirely. If your employer is one of many that does not provide coverage, but your spouse is among the lucky few whose does, you may be able to continue on your spouse’s plan through the Consolidated Omnibus Budget Reconciliation Act. COBRA allows you to continue your current coverage for up to 36 months post-divorce. However, know that the continued coverage will cost you.
Enacting COBRA can increase the cost of your spouse’s policy substantially, and the courts are likely to consider the additional cost when calculating your settlement. It may be worth your while to shop around on your state’s health insurance exchange for your own, more affordable policy.