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What happens to your medical insurance after you divorce?

What happens to your medical insurance after you divorce?

When you get divorced, one of the things that you have to consider is how it’s going to affect your insurance. If your spouse has health care insurance and you don’t, things can get very expensive very fast.

The court will likely order your spouse to keep the kids on his or her insurance, but you won’t automatically be entitled to coverage.

Due to the Consolidated Omnibus Budget Reconciliation Act, your spouse’s employer must keep you on the company’s insurance plan for up to 36 months (if you follow the correct procedure about requesting it), but it will cost you a lot more than you are probably used to paying—102 percent of the group rate. That’s probably significantly more than you’re expecting if your spouse’s employer has always kicked in part of the coverage.

Who exactly has to pay for the COBRA coverage is often a question for the judge. In some long-term marriages where one spouse has always been the been the wage-earner, the judge will order that spouse to pay the COBRA benefits for a period of time while the dependent spouse gets on his or her feet. In other cases, the dependent spouse has to foot the bill.

Sometimes, if the spouse with the insurance coverage has been ordered to pay the insurance premiums for a period of time, he or she will “neglect” to tell his or her employer about the divorce in order to avoid paying the additional cost for the COBRA insurance. In other cases, the spouse that was dependent will play on the sympathies of his or her ex and ask an ex-spouse to pretend that the divorce didn’t happen in order to avoid the prohibitive payments.

That’s insurance fraud can ultimately land you and your spouse in a lot of trouble.

For example, a Michigan couple has recently been charged with health insurance fraud. The couple divorced in 2014, ending the wife’s eligibility to health insurance through her spouse’s employer. While it’s unclear why her ex-spouse didn’t notify his employer of the change, he did admit that he knew his ex-wife was continuing to use his medical insurance illegally. She managed to accrue $113,000 in medical care services in a 15-month period.

Divorce is about new beginnings as much as it is about endings—don’t complicate your new beginning by making a major mistake right at the start.

Source: Fox 17 West Michigan, “MSP: Greenville official, ex-wife defrauded $113K in insurance,” Darren Cunningham, Jan. 03, 2017

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