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Tackling The Issue of Health Insurance

by | Jul 16, 2021 | Firm News |

Often asked questions during divorce proceedings concern the issues of health insurance, continued coverage, when can I drop my spouse from my insurance, how long can one stay on the other party’s insurance, what are the costs, who covers the children, how are payments for premiums allocated, what happens to non-reimbursed medical/dental expenses, must I stay in network in the plan. The list is endless. This article is intended to give some answers and guidance for these myriad issues. 

Typically in these matrimonial proceedings one spouse maintains health insurance coverage for the family. Pursuant to the automatic orders which come about when an action for divorce is commenced, the insured spouse cannot and must not remove the other spouse and/or children as insured dependents under the health insurance plan. Violation of the automatic order concerning insurance will surely land one in court to reinstate the dependent coverage. If the parties are unable to decide between themselves as to how premiums or non-reimbursed medical expenses are paid for then either can seek court intervention to determine the method of and allocation for the payment of these expenses. Medical insurance coverage (and dental insurance if available) continues throughout the divorce proceeding. 

When the matter concludes either through a settlement or after a trial and only AFTER a Court has signed a Judgment of Divorce, can the insured spouse then remove the other spouse from the health insurance plan. The then uninsured spouse must either obtain their own medical insurance through an employer or if not employed, the uninsured spouse may elect to remain insured as a single policy holder through what is called COBRA (Consolidated Omnibus Budget Reduction Act) which act gives workers and families or dependents the right to choose to continue group health benefits due to a divorce. The uninsured spouse will be entitled to remain on the plan for a period of three (3) years and will be required to pay to the employer the cost of insuring that spouse as a single individual plus a small administrative fee, if charged by the employer. 

The cost of the individual policy may be expensive and the uninsured spouse may instead elect to look elsewhere such as the NYS health insurance exchange for a less expensive policy. The uninsured spouse typically has 60 days to elect the COBRA coverage which will be retroactive to the date the spouse was removed from the health insurance plan. Thus it is wise to plan early for this eventuality and to discuss with your attorney how best to investigate your options. The cost of the plan will be built into monthly expenses for the parties to discuss for settlement or for the Court to consider for any support award. 

The costs for the children’s health insurance premiums as well as for non-reimbursed are likewise considered as expenses that are paid by the parties in addition to regular child support payments. Pursuant to New York’s Child Support laws, health insurance and the payment of non-reimbursed medical/dental expenses are mandatory add-ons in addition to child support and are paid on a pro-rata basis figured by calculating each parties’ income as it relates the total combined of the parties. For an example only, if one party’s income is $150,000 and the other party has income of $50,000 then the combined income is $200,000.00 and the costs of medical insurance premiums and non-reimbursed medical expenses are divided 75% to the higher wage earner and 25% to the lower wage earner in addition to regular child support payments. 

In addition to the above, questions are often asked about medical providers and staying “in plan” for medical/dental treatment or whether parties may use out of plan doctors. Most often these issues are resolved by allowing the dependent children to continue to see out of plan providers if they had been using the out of plan providers prior to the divorce action being commenced. In most cases, the parties will agree by way of a settlement agreement to allow for out of plan providers, if and only if, the parties agree in writing to the use of the out of plan provider or if there are no “in plan” providers available to treat the particular medical issue. 

As discussed above, it is best to consult with your attorney early on as to those potential medical questions which may arise concerning yourself and/or the children so as to enable counsel to include a resolution of them in any settlement agreement or for evidence for trial.