“My spouse has a health plan through his work; will I still be covered by the plan after we divorce?”
Upon final Judgment of Divorce, a spouse can no longer be part of the family plan or employee and spouse plan he was during the marriage. The newly divorced spouse can, however, obtain coverage pursuant to COBRA (The Consolidated Omnibus Budget Reconciliation Act) or continuation of benefits at his/her own cost for the period allowable by law, a maximum of 36 months, depending on the plan and employer.
COBRA gives workers and their families who lose health benefits the right to choose to continue group health benefits provided by the then group health plan for limited periods of time under certain circumstances such as job loss, fewer hours worked, death, divorce, and other life events. COBRA requires employers with 20 or more employees to provide this continuation. Smaller companies in New Jersey also have continuation of benefits programs. The employee must notify the plan administrator of the “qualifying event” (divorce) within 60 days of the divorce. Then beneficiary spouse must be sent election notices no later than 14 days after the plan administrator receives notice of the qualifying event.
The spouse of the employee, if applying timely, is entitled to coverage as of the date he or she would have lost coverage so there is no lapse in coverage. The spouse of the employee also is responsible for the full premium for this continued coverage. For example, if the premium for the spouse was $500.00 per month, but the employer covered 50%, the employee and his/her spouse only paid $250.00 per month for the spouse’s coverage. Upon divorce, the single spouse must now pay $500.00 per month for the COBRA benefit, the full premium. If a premium payment is missed, coverage can be cancelled. Children covered by an employee’s plan will not lose coverage because of the divorce.
Sometimes this premium for COBRA can be negotiated as part of support paid; sometimes it is not. Also in New Jersey, parties can obtain a Divorce from Bed and Board. This is a divorce, but does not extinguish every right and is essentially a “legal separation”. If the parties use Divorce from Bed and Board, the spouse without his/her own insurance coverage can continue to have the same insurance coverage as existed during the marriage. All other property rights are extinguished as a result of Divorce from Bed and Board. Either party at any time can move for a Final Judgment of Divorce without the approval of the other party eliminating the rights and insurance coverage allowable with Divorce from Bed and Board.
Tanya Helfand is the founder of Helfand & Associates. A New Jersey law firm in Whippany, New Jersey. At Helfand & Associates, they believe mediation or negotiation should be used first to avoid costly litigation but are willing to go to trial to protect your interest. Tanya is a Certified Attorney through the Supreme Court of New Jersey.