For a variety of reasons, older Americans may choose to divorce. While there are several considerations that the now-ex-partners should be aware of, sorting out health insurance may be near the top of the list. If you or your spouse is losing coverage as the result of a divorce, there are several paths for each of you to consider.
If you have health insurance through your employer, not much will change for you. Depending on what comes next for your ex, though, you may have to do some paperwork to remove your ex from the policy. You might also need to give a copy of your divorce decree to your benefit administrator. That will help him or her know when to offer required COBRA continuation coverage. More on that in a moment.
A divorce is a qualifying life event under HIPAA rules. Any coverage your employer offers will be available to you through a 30-day special enrollment period. You’ll need to bring a copy of your divorce decree to your employer to provide evidence of your eligibility, but your benefits administrator will be able to help you enroll.
If your spouse’s group plan covered more than 20 employees, you may be eligible for COBRA continuation coverage. Effectively, this means you can remain enrolled in the same benefits for up to 36 months after the divorce. However, the cost will likely be much higher, since the employer is no longer obligated to pay a portion of the premium. Most people opt to seek coverage elsewhere, but this could be a good fit if the benefits make sense to you.
If you’re under age 65, you may be eligible for coverage through the Health Insurance Marketplace. What’s more, depending on your income, you could also qualify for premium tax credits or cost-sharing reductions. These two programs help lessen your monthly premiums and out-of-pocket expenses, respectively.
There are a lot of variables to consider here, though, especially if an offer of employer coverage is on the table. A licensed health insurance agent can help you determine whether you’re eligible for the Marketplace, and if so, they can provide no-cost guidance in selecting a plan.
Medicare is built for three main audiences: those who are 65 or older, those with certain disabilities, and those with end-stage renal disease. If you belong to any of these groups but did not enroll in Medicare Part A or B because you were on your spouse’s plan, it may be time to get started.
Just as it does if you are under 65, losing employer-sponsored coverage makes you eligible for a special enrollment period. But here’s where things get tricky.
If your marriage was ten years or longer, and you or your ex-spouse paid Medicare taxes for a total of 40 quarters throughout your careers, you may be eligible for premium-free Part A. You could also be eligible based on your own work history of 40 or more quarters.
If you weren’t married for 10 years or don’t have enough credits from your work history, you may be forced to pay a monthly premium for Part A. This premium is subject to change each year.
If you remarry, you will no longer be able to qualify for premium-free Part A based on your ex’s work history, but you may be able to do so with your new spouse.
For Medicare Part B, you have an eight-month window after the loss of employer coverage to enroll without penalty. You’ll likely be responsible for a monthly premium, but that premium could be higher if you miss this special opportunity.
And, for Medicare Part D, which covers prescription drugs, you only have a 63-day window to secure other drug coverage before facing a lifetime financial penalty.
Given all of these variables, here’s the most important thing you can do: If you’re eligible for Medicare and your employer-sponsored coverage is ending, you’ll need to contact your local Social Security office to begin the enrollment process. A licensed health insurance agent can also help you evaluate your next steps in this case.
After a divorce, one of the biggest issues you’ll have to tackle is securing health coverage. However, there are no fewer than five paths you might take on that journey. Our team of experts will take time to understand your unique circumstances and chart the best-fitting path forward. In what could be a turbulent time, you need the peace of mind our 35 years of experience can offer.