Speaking from experience, I can tell you divorce is one of the most painful things you can go through... if there are children involved. If there's no kids, wow, much smoother sailing.
I wrote a page on Divorce and COBRA, many copies ended up on the net! So I decided to put together a slideshow with some updated info. I got many emails and posts on my Divorce and COBRA forum about estranged spouses dropping their exes from the health plan.
I can understand some naked hatred for your ex and why you would not want money taken out of your paycheck for their health insurance. But dropping your kids? Also you could ask your ex to pay for their portion, and have the employer contribution to match IF you can keep a secret and not tell everyone at work you are getting divorced. If the employer finds out the coverage was dropped in anticipation of divorce, they should send the COBRA enrollment paperwork.
And if you hate your ex enough to cancel their health insurance, at least inform the plan administrator about the divorce, when they get the bill for COBRA that will be sweet revenge! But I still don't get the kids part, why un enroll your own children? You are still at least partly responsible for their medical care.
Employer subsidized coverage is one of the cheapest ways to insure your kids. Don't let your hatred for your ex cost you more money that it already will!
Divorce lawyers don't come cheap, and if you are the employee and cancel their health plan, and the administrator wants a subpoena to release health plan info, that could cost you 5 figures, just to get the info you could volunteer. And remember, legal fees are shared based on the ability to pay. So if you are the main income earner, do not play games with the health insurance. The courts may make you pay the legal fees for the gamesmanship in the end.
I wanted to spend some time talking about the legal fees because often, exes will send their lawyers into battle, and spend much much more one legal expenses that if they had just worked together. It's really insane, and it happened to me, but not over health insurance.
Now with many companies switching to greater cost sharing health policies like high deductible, catastrophic and medical indemnity plans, don't forget to discuss with you ex who will pay for the uncovered portion of the children's medical care. It can be substantial.
The general notice is something everyone gets usually annually, sometimes even twice a year after open enrollment. Very few companies negate sending this out.
The 60 day rule
You have 60 days from the time the health benefits peeps send you the notice to return the paperwork. And 45 days after that to pay. People lose those notices all the time. I have the emails to prove it!
COBRA Back Premiums
Another region of COBRA hell is paying the back premiums. People want to find a work around, there actually is one but it takes some finesse: Send in the waiver of COBRA coverage, then re enroll before the 60 day enrollment period ends. It will only save you 2 months of premiums in the long run, but could cost you your coverage if you don't re enroll in time. Most short term short sighted plans don't work out.
Gay (Financial) Pain
If you have a domestic partner, I feel your pain. Because some companies still do not cover domestic partnerships. As of this writing (8/19/2011), domestic partners have no legal rights to continued health care coverage under COBRA.
Days to Notify
Once your employer notifies the health plan admin, they have 14 days to send you the cobra enrollment papers. This also does not happen. The employer doesn't notify benefits, or benefits loses your info. It happens often. It's a huge liability for the company with big fines, so it's no wonder they will un enroll you the moment you don't meet the paperwork or payment requirements. Make sure the
benefits people have your correct address, and you'll stay on their radar. Of course, if you are getting divorced and moving, get a PO Box.
Excise Taxes & Fines
What if the admin has your correct address, knows you are divorced, you qualify for COBRA, and have lost your insurance. If they do not send you the cobra papers that is bad for them. I've detailed how bad in COBRA fines and penalties page.
If you still don't get the required docs after complaining to the benefits peeps, call the DOL and IRS. They usually will contact the company and request information. And that should scare the Jehosephat out of those stiff suits.
And after complaining to the company, the DOL and IRS, if you still do not have your notice, hire a benefits lawyer. Most of them, okay all of them I have heard do not work on contingency, which means you'll have to put up a retainer, anywhere from $2,000-$5,000. The good news is you probably have an excellent case, barring some certain circumstances. But that's for another slideshare.
After you get the enrollment paperwork, even though you have 60 days to send back the paperwork don't wait until the last day. What if the post office loses your enrollment?
Legal Separation
COBRA is a federal law, but the states define "legal separation" so if you are only separated in Delaware, Florida, Georgia, Mississippi, Pennsylvania, and Texas, you might be SOL until your divorce goes through.
COBRA Costs
Because your group plan usually covers everyone and the health insurance plan must make a profit, the price is really high. No surprise there, but some mystery, since most employees have no clue about what their plans actually costs. And comprehensive insurance has a tendency to increase in price faster, since more people use them for every sniffle and fever.
Summary: Divorce can be a complex and expensive process. Consult a lawyer, they usually do not charge for an hour to discuss your case. And healthcare is a big ticket item now, so if you have a chronic medical condition, get on COBRA. If you are healthy, shop rates at the top of the page, visit my sponsors and I'll keep jamming.
Craig Casey is an Writer, Coach, Blogger, Husband, and Former Health Insurance Agent helping people on the web since 1999 with their health insurance problems.
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