WILL YOUR HEALTH INSURANCE COVERAGE CONTINUE AFTER THE DIVORCE IS FINAL?
Child related issues, such as custody, support and visitation are usually considered to be the most important, and most litigated issues in a divorce matter. It is also extremely important to correctly address the issue of health and dental insurance coverage for unemancipated children, and both parties. Massachusetts residents are required to maintain health insurance coverage. In most situations, one of the Parties provides the health insurance, and perhaps dental insurance as well, through his/her employer. He/She is the subscriber.
The "family plan" is the plan most employers offer to employees. As long as the Parties are married, there is usually no issue as to coverage, for either the Parties and/or the children, until the children become emancipated, and/or are no longer eligible for coverage under the existing plan.
However, divorce proceedings can, and usually do, affect health and dental insurance coverage. Once divorce proceedings begin, Parties should obtain information regarding their present health and dental insurance coverage, and whether he/she will be eligible for continued coverage at the time the divorce is final. Do not assume your coverage remains intact, and/or that you will automatically have continued coverage. That decision is often not made by the subscriber spouse, but by the health insurance plan terms.
Health plans may be fully insured or self-insured, and divorcing spouses must be aware of what type of plan is providing coverage. Health insurance benefits are provided in one of two ways: Employers purchase health insurance from an insurance company, that is fully insured plans, or they provide health benefits directly to the employees, as self insured plans.
In fully insured plans, the employer pays a per employee premium to an insurance company, and the insurance company provides health coverage for insured events. It is the insurance company who determines the scope of the coverage.
In self-insured plans, the employer acts as its own insurer, and does not purchase health insurance from an insurance company. Self-insured plans often contract with an insurance company or other third party to administer the plan, but it is the employer, not the insurance company or third party that bears the risk. Since the employer is the insurer, the company can determine the scope of coverage, including eligibility status, and non-qualifying events. A non-qualifying event may be a legal separation or divorce, that would or could make one Party ineligible for continued coverage. Most self-insured plan coverage will terminate for the non-subscriber spouse as of the date of the divorce absolute, or date when the divorce is final.
Parties would be wise to obtain information as to whether the spouse providing health insurance is covered by a fully insured or self-insured plan. That information is routinely provided pursuant to Mandatory Disclosure Rule 410. If it is not provided, it should be requested. Once the information and eligibility requirements are disclosed, the Parties will be able to negotiate an appropriate provision for health insurance coverage. Parties are advised to see an attorney to obtain further information regarding this important item.