Will I Lose My Health Insurance When I’m Divorced in California?

Can I keep my current spouses’ insurance, what is this going to cost me and can I be denied? 

Weekly I receive emails from clients across CA regarding options for Health Insurance.  

Fortunately, with the ACA – The Affordable Care Act under the Obama Administration, everyone Qualifies for coverage regardless of their previous or current health condition.  

Prior to this Act, 85% of my clients going through a divorce were denied coverage.  One of the primary reasons was they had been in counseling to save their marriage.  Underwriting required at least 12-months of no therapy visits or medication tied to anxiety or depression.

The following are options to explore:

1. Legal Separation

• Check to see if your spouse’s Employer does not see Legal Separation as a disqualifying event
• While this option is not always available, it is worth exploring if neither of you needs to have the Divorce Final and aren’t looking to remarry
• Pros are that the coverage stays the same and likely will have a lower premium cost because of the Employer’s contributions

2. COBRA

• Consolidated Omnibus Budget Reconciliation Act of 1985
  • Provides for a guarantee issue of continued medical coverage for the following qualifying events: 

1. The death of the covered employee 
2. The termination or reduction of hours of the covered employee’s employment for other than gross misconduct
3. Their divorce or legal separation from a covered employee 
4. Their loss of dependent status by a dependent child 
5. The covered employee becoming eligible for Medicare
   • Federally required for all companies with 20 or greater employees 
   • COBRA Premium can be no greater than 102% of what it was within the Group 
   • Coverage can last up to 36 months 
   • In CA, if the Employer has less than 20 Employees, you are protected through Cal COBRA in the same way as COBRA 
     • Premium can be 110% of what it was within the Group 

3. Your States ACA Exchange

• If your income meets the qualifications, you may receive a subsidy that substantially lowers your premium
• You apply online – here is CA Link 
  • https://www.coveredca.com/

4. Individual Coverage

• If you would not receive a subsidy on the Exchange, applying directly to the Insurance Carrier provides more options
• Working with a Licensed Insurance Broker who represents all Carriers is a good place to start

5. Group Insurance with a new Employer

• If you were the lesser earner or stay at home spouse, this may be something to work towards, since many ERs will pay a portion, if not all of the EEs premiums as a benefit

Medicare

• Available to all at age 65, if you have contributed via your earned income or your spouse or former spouse contributed.  Your spouse/ex-spouse must be at least 62-years old for you to collect on theirs and you would have needed to be married for at least 10-years 
• If you have 40-Credits, you can apply online 60-days before the month you turn 65 
  • https://www.ssa.gov/benefits/medicare/
  • There will be a premium for part B (Doctors) and for part D (Prescriptions) 
• If there are no earned credits, then a premium would be required for part A (Hospitals)
• If you have been on SSDI (Social Security Disability) for more than 2-years, you are automatically qualified to enroll in Medicare regardless of your age
• Make an appointment with your SS Department 90-days prior to turning 65 to find out what your options are

Finally – Breathe and know you have options.

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