Many married couples enjoy shared health insurance benefits provided by the employer of one spouse. Unfortunately, divorce changes things, including who is covered by the one spouse’s health insurance. Does health insurance coverage end when you get divorced or start alimony? In most situations, yes. In this guide for New Jersey couples looking to untie the knot, we will discuss health insurance and what happens during and after divorce.
Does Health Insurance Coverage End with Divorce?
Yes, health insurance typically ends for a dependent spouse with divorce. In most cases, a dependent spouse who is covered under their spouse’s employer-sponsored health insurance plan will lose eligibility for that coverage once the divorce is finalized. This is due to federal laws, such as the Employee Retirement Income Security Act (ERISA), which prohibit former spouses from remaining on the employee’s health insurance plan after the marriage ends.
Is There Any Interplay Between Health Insurance and Alimony?
Is There Any Interplay Between Health Insurance and Alimony?
Yes, there is some interplay, but gaining alimony doesn’t immediately entitle the ex-spouse access to the payor spouse’s health insurance. Keep in mind that alimony, or spousal support, is designed to help the lower-earning spouse maintain a comparable standard of living after divorce. As such, the courts may consider health insurance expenses when calculating alimony awards.
For example, if the dependent spouse is low income and needs assistance securing health insurance post-divorce, they may argue for a highly alimony payment to cover that expense. The court will review numerous factors regarding alimony, including:
- Each spouse’s financial situation.
- The duration of the marriage.
- The standard of living during the marriage.
- Each spouse’s ability to earn income post-divorce.
How to Get Health Insurance Coverage After Divorce in New Jersey
If you are going through a divorce, you must assume that the coverage provided by your spouse will end once the divorce is finalized. As much previously, this is due to federal and state laws. These laws apply regardless of the alimony agreement, meaning that your ex-spouse may agree to help pay for your health insurance, but you can’t be covered by their insurance.
Here are some options for the dependent spouse to maintain coverage:
COBRA Coverage
Under the federal COBRA law, a dependent spouse can continue coverage under their ex-spouse’s employer-sponsored health insurance plan for up to 36 months. However, the dependent spouse must pay the entire premium, including the portion that was previously covered by the employer, which can make this option expensive.
New Jersey Continuation Coverage
For employers with fewer than 20 employees, federal COBRA laws may not apply, but New Jersey state law offers similar coverage. This allows a dependent spouse to maintain health insurance under their ex-spouse’s plan for up to 36 months, though the premiums are still the responsibility of the dependent spouse.
Marketplace or Private Insurance
A dependent spouse can purchase an individual health insurance plan through the Affordable Care Act (ACA) marketplace or through a private insurer. Depending on their income, they may qualify for subsidies or special enrollment periods following the divorce.
Medicaid or NJ FamilyCare
If the dependent spouse has a low income, they may qualify for Medicaid or NJ FamilyCare, New Jersey’s state Medicaid program. These programs offer low-cost or no-cost health insurance based on income eligibility and other factors, providing an affordable option for individuals after divorce.
Can Health Insurance Be Negotiated into a Divorce Settlement or Alimony?
Yes, you can add provisions about health insurance into the divorce settlement or alimony agreement. Here are some ways couples may choose to include health insurance costs into their divorce settlement:
Health Insurance in Alimony
In some cases, the higher-earning spouse may agree to pay additional alimony specifically designated for health insurance costs. This arrangement helps the dependent spouse maintain coverage without having to bear the full burden of premium costs. The court may also consider the need for health insurance coverage when determining alimony, especially if the dependent spouse will struggle to afford coverage on their own.
If this route is taken, the settlement should clearly specify that a portion of the alimony payment is intended for health insurance premiums. This is particularly important if the dependent spouse will rely on COBRA or an individual insurance policy that can be expensive.
Direct Payment of Premiums
Another option for negotiating health insurance in divorce settlements is for the supporting spouse to agree to directly pay the dependent spouse’s health insurance premiums. This could include the cost of COBRA coverage, which allows the dependent spouse to remain on the ex-spouse’s employer-provided plan for a limited period, or the premiums for an individual insurance plan if COBRA is not an option.
The agreement may specify a set duration for this support, such as one or two years, until the dependent spouse can secure their own insurance. It is important for both parties to fully understand the duration and terms of these payments, as they can be a significant financial commitment.
Temporary Agreements
In some cases, a temporary arrangement can be made to cover health insurance costs until the dependent spouse is able to secure independent coverage. For example, the supporting spouse might agree to pay for COBRA or other insurance premiums for a limited time, typically until the dependent spouse is able to transition to an individual policy or become eligible for other coverage.
Temporary agreements can offer a flexible solution for couples who are not in a position to negotiate long-term support but still want to ensure the dependent spouse is not left without health insurance coverage. These arrangements may also be particularly useful if the dependent spouse is still working on securing coverage through the ACA marketplace or Medicaid.
Discuss Your Options with an NJ Divorce Attorney Today
While alimony can help cover the cost of post-divorce health insurance, it does not automatically include coverage. By negotiating clear terms in your divorce settlement and working with a skilled attorney, you can secure financial stability and maintain access to essential healthcare coverage.
If you’re facing divorce and have concerns about alimony and health insurance, contact Ziegler Law Group, LLC at 973-533-1100 today. Our experienced family law attorneys can guide you through this complex process and help you achieve the best outcome for your future.
