While there are several ramifications that can follow as a result of getting a divorce, losing your health insurance is a result that many people don’t consider. Because health insurance is such a valuable necessity, especially when one spouse has a serious health condition, some couples try to avoid divorce and opt for a legal separation. Couples contemplating either divorce or separation need to notify their insurance companies within a specific amount of time. Failure to provide notification of a divorce or separation may be considered insurance fraud. In the event of a divorce, women have a higher chance of losing health insurance coverage and then remaining uninsured for years after the divorce.
Provisions for health insurance are governed by federal and state law, as well as the parties’ settlement agreement. Under a settlement agreement, one spouse may be required to cover the other’s health insurance costs. The agreement may specify a time limit, or may indicate coverage for the spouse’s entire life. Settlement agreements also state who will pay for insurance coverage for any children. The parties may decide the children will be covered under a parent’s employee group plan, or that one parent will get private insurance. The parents may agree that one will cover 100 percent of the cost, or they may share costs in proportion to their incomes.
If both parents are covered by group insurance plans, one plan can be considered “primary” and the other “secondary.” The secondary plan would cover costs that are not covered by the primary plan. Insurance companies can provide guidance in this area. Parents should consider not only insurance premiums for their children, but also co-payments, deductibles, and out-of-pocket medical expenses.
If there is a pre-existing medical condition, it may be especially important to avoid the need to switch plans for the child. Unfortunately, former spouses do not always honor the agreements made on insurance and other issues. Parents can create a contract with the children’s doctor, specifying which parent is responsible for what costs. For example, the parents may agree to divide bills 75/25. The parents would then each be billed separately.
North Carolina courts can order parents to pay a child’s medical expenses as a type of child support, including medical, dental, and hospital costs. Under North Carolina law, the court must order a parent to provide health and dental insurance for a child when it is available at a reasonable cost. Employment-based and other group health insurance policies are deemed “reasonable.”
The court can order a parent to provide medical support for the child, or the parties may enter into a written agreement. An order or agreement for medical support may compel one or both parents to pay medical, hospital, dental, or other health-care-related expenses.
The parent ordered or under agreement to provide health insurance must provide written notice of changes in the applicable insurance coverage to the other parent. The employer or insurer of the party required to provide health, hospital, and dental insurance must release upon request to the other party any information on a child’s insurance coverage that the employer or insurer may release to the party required to provide insurance.
Under a court order or agreement for health insurance, the signature of either parent is valid authorization to the insurer to process an insurance claim on behalf of the minor child. If the parent who is required to provide health insurance fails to maintain coverage for the minor child, the parent will be liable for any health, hospital, or dental expenses incurred from the date of the court order or agreement that would have been covered by insurance. When a noncustodial parent ordered to provide insurance changes jobs and health insurance coverage is available through the new employer, the new employer will enroll the child in the employer’s plan.
Overall, it’s important for couples to understand the health insurance rights and options for themselves and their children when getting a divorce. Spouses should research the best way to obtain insurance. If a spouse fails to consider his or her options prior to separation, they could be stuck paying a higher cost or even risk losing insurance coverage.