One of the more unexpected effects of going through a Texas divorce is one spouse losing his or her health insurance coverage once the divorce becomes final. Given how expensive healthcare is, it’s important to be mindful of this consequence after a divorce, especially if you are currently under your spouse’s health insurance plan.
If you’re presently employed, the most sensible thing to do is move to your company plan—premiums are low and deducted from your payroll, which means you also get a tax break. The appeal of company health insurance is why many at-home spouses seek employment or look for associations that offer group health insurance plans after a separation.
But what if you can’t do either? Below are a few options to choose from.
Consolidated Omnibus Budget Reconciliation Act (COBRA)
The Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 allows individuals to keep their health insurance coverage for a specific period provided a qualifying event, such as a divorce, happens. COBRA is particularly useful for individuals who are part of their spouse’s company health insurance, as a divorce—no matter how amicable—automatically terminates the dependent spouse’s coverage.
This is where COBRA comes, applying to employer health insurance groups with at least 20 employees. If you are in the middle of a divorce, you can use COBRA to remain under your ex-spouse’s health insurance plan for up to three years. The key, however, is to fill up and return COBRA enrollment forms within 60 days of receiving an eligibility notice—missing the deadline forfeits this option.
State-sponsored Continuation of Healthcare Coverage
Texas and some other states allow individuals who are not eligible for COBRA or have exhausted their COBRA coverage to avail for of state-sponsored healthcare coverage continuation—a perk often called mini-COBRA.
In Texas, the following rules on coverage continuation rights apply:
Dependents can stay covered under their ex-spouse’s employer’s health plan for up to nine months if they are not eligible for COBRA.
Depends who have exhausted their COBRA coverage can seek state-sponsored continuation for six more months after their COBRA continuation ends.
When in doubt, check with your state’s department of insurance and the company’s human resources to go through the finer details of this setup.
Affordable Care Act (ACA)
You also have the option of buying individual health insurance under the ACA instead of going through a group-based plan. You can purchase your plan through the government exchange or off-exchange directly through a health insurance provider or broker. Either way, individual plans are guaranteed issued free of any underwriting or exclusions for pre-existing conditions. Benefits are also more robust than ever—a big reason behind why many people get healthcare coverage under ACA after losing group coverage.