Year after year, the increase in the cost of health care has been rising faster than the general cost of living. The expense of routine doctor’s visits and prescription medications is outpacing the annual cost-of-living raises in your paycheck.
Of course, maybe you have health insurance to cover the majority of those costs. That’s good news!
Then again, maybe your health insurance coverage comes from your spouse’s policy, and you’re getting a divorce. Uh-oh, that’s definitely bad news. The day your divorce becomes final, you no longer will be covered as a spouse. You need to make plans now to acquire health insurance coverage.
COBRA: A Temporary Solution
In 1986, the U.S. Congress passed a law called the Consolidated Omnibus Budget Reconciliation Act (COBRA). Among other things, that law made changes in existing rules for health benefits provided by employers. Under COBRA, people still could continue their group health insurance for a time, even if they lost their jobs, or if their employers cut their work hours, or if other things happened.
One of those “other things” that leads to qualification for a COBRA extension is when your spouse is the person who has health insurance as an employment benefit, and you are getting divorced. Under those circumstances, you are allowed to extend your insurance protection as an ex-spouse of a group health participant.
There are restrictions, of course. The three most important are:
The Size of the Business where your Spouse works
As long as the company has 20 or more employees and is a private business or a state or local government agency, you may be eligible for COBRA extensions. Federal government agencies, businesses with fewer than 20 workers, and certain other employers cannot participate.
The Duration of Coverage
COBRA will extend your health insurance coverage for up to 36 months. That means you have up to three years to find affordable health care coverage independent of your ex-spouse. That’s a lot of time, but it’s not unlimited time.
Your Time Frame to make the Decision
Once your divorce is final, you will have about 60 days to decide whether to use your COBRA group insurance extension.
Why wouldn’t you want your COBRA extension?
The only problem with COBRA—from your point of view—will be its expense. When you were covered directly under your spouse’s group insurance policy, some of the costs of that insurance were taken from your spouse’s paycheck, and some costs were paid by your spouse’s employer. Once you are divorced, those contributions stop. You have the right to continue on your spouse’s group policy, but you will have to pay the full costs of coverage every month, and an additional small administrative fee.
That may or may not be a good deal for you. If you are young and in good health, you might find that private health insurance coverage would be cheaper than continuing your spouse’s group benefits. On the other hand, group insurance rates generally are lower than typical individual insurance rates, so you might find that the COBRA extension is your least expensive option. This is something you will need to investigate on your own; however, your North Carolina divorce attorney may have some important advice on the matter.
Getting Help in the Transition to Financial Independence
Budgeting after a divorce can be a significant challenge for people who have grown accustomed to married life. A compassionate divorce lawyer in Wilmington can help ease the transition by referring you to organizations that help the newly divorced. At Speaks Law Firm, we’re not satisfied merely to represent you in court; we want to make sure you can adjust to your life after your North Carolina divorce. Call our office today at 910-341-7570 or toll-free at 877-593-4233. We’d like the opportunity to tell you what we can do for you.