What’s the interplay between divorce and health insurance? What do you need to know about divorce and health insurance? A working spouse usually covers the insurance of the non-working spouse. What happens if you lose coverage because of the divorce?
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Insurance companies usually end the health coverage of the beneficiary spouse after a divorce. There’s a law allowing non-working spouses to be covered by the working spouse’s insurance. This coverage is usually effective for a certain period. Your ex-spouse has the option to pay the extra premium. Or find a better insurance plan with lower premiums.
You’re going through a divorce (or legal separation). You reflected on major concerns like child support, property division, and child custody. There’s a distinct possibility you have forgotten to consider your health insurance. Your divorce can have an impact on health insurance. The more you understand about health insurance, the better prepared you will be.
What do you need to know about health insurance in Michigan?
The Patient Protection and Affordable Care Act (PPACA) established the Healthy Michigan Plan. PPACA or Public Act 107 of 2013 went into effect on April 1, 2014. The act defined the benefits under the Healthy Michigan Plan or HMP. The HMP benefit structure guarantees beneficiaries access to high-quality medical care. It encourages the use of high-value services. HMP also supports the adoption of healthy lifestyle habits.
HMP made health care benefits available through the plan. Governor Rick Snyder signed the Michigan Public Act 107 of 2013 that created the plan. Governor Snyder signed the state law on September 16, 2013.
The Healthy Michigan Plan
Eligibility under the HMP health care coverage is for individuals who:
[ 1 ] Are 19-64 years of age.
[ 2 ] Have income at or below 133% of the federal poverty level. (The Modified Adjusted Gross Income methodology establishes the federal poverty level.)
[ 3 ] Are not qualified for Medicare.
[ 4 ] Are not qualified for other Medicaid programs.
[ 5 ] Are not pregnant at the time of application.
[ 6 ] Are residents of the State of Michigan
It’s not unusual for people to continue to be without health insurance after a divorce. This reality in health insurance can be true, especially for women.
The methodology for Modified Adjusted Gross Income determines eligibility for the plan. The Department of Human Services rolls out the implementation of the plan. Applications must meet the criteria for Modified Adjusted Gross Income eligibility.
Citizens of the State of Michigan can avail of services under the Healthy Michigan Plan. They can receive these essential health benefits:
[ a ] Hospitalization
[ b ] Maternity and newborn care
[ c ] Treatment of mental health and substance use disorder treatment services. (It also includes behavioral health treatment).
[ d ] Ambulatory patient services
[ e ] Emergency services
[ f ] Prescription drugs
[ g ] Habilitative and rehabilitative services and devices
[ h ] Laboratory services
[ i ] Wellness and preventive services
[ j ] Chronic disease management
[ k ] Pediatric services, covering vision and oral care
The Healthy Michigan Plan covers other medical services when appropriate. There can be cases where participants may be subject to cost-sharing obligations.
Data on Health Care Coverage in Michigan
Three percent of Michigan’s entire population lacked health insurance in 2021. Statista revealed the majority of Michigan’s citizens have health insurance through their jobs. Statista is a research organization for market and consumer data.
Around 115,000 women lose their private healthcare insurance yearly because of divorce. A study by the University of Michigan in 2012 revealed this finding. Furthermore, 65,000 women continue to go uninsured for extended periods. Twenty-five percent% of women are often without coverage six months after their divorce. These are women who had relied on their partners’ insurance policies.
Many women struggle to keep their private insurance coverage. They are no longer considered dependents under their husbands’ policies. They struggle to afford the premiums for other private insurance options. And many divorced women do not qualify for Medicaid or other public insurance. This is despite the frequent financial difficulty they endure.
Women with employer-based insurance are less likely to lose health insurance. This is in comparison with other women (11 percent versus 17 percent). They are not completely protected from health care expenses. The financial losses associated with divorce make it harder to pay regular expenses. Such expenses include their share of employer-sponsored health insurance.
The University of Michigan study looked into women from the ages of 26 to 64 who divorced between 1996 and 2007. The study included women with modest incomes with ages between 50 and 64. It revealed women are more at risk of losing their healthcare coverage.
What is the impact of divorce on health insurance coverage? Can you lose insurance coverage while the divorce process is ongoing?
A divorce dissolves your status as dependent on a spouse’s health insurance. You will no longer qualify for your ex-spouse’s health insurance plan.
A legal separation judgment and a marriage dissolution decree are both treated equally. The majority of health insurance companies will end ex-spouses’ coverage. You could continue as a dependent on your husband or partner’s health insurance. A government plan can make it possible. Confirm this with the provider of the government health insurance plan.
While the divorce process is ongoing, there are a set of orders preventing the loss of insurance coverage.
You have filed for divorce or legal separation. You have been served with a Petition and Summons for divorce or legal separation. Specific orders go into effect. These orders restrain you and your spouse or partner from taking certain actions. These orders are called ATROs. It’s an acronym for Automatic Temporary Restraining Orders. Find the ATROs on the second page of the family law Summons. ATROs prohibit you and your spouse or partner from altering any insurance coverage. ATROs include but are not limited to, canceling existing health insurance benefits. Or ending the status of the other spouse or partner as a beneficiary.
The ATROs stay in effect during the process of divorce until the final judgment. Or the Petition is dismissed, or until further order of the court, whichever occurs first.
The final judgment may oblige your ex-spouse or partner to continue paying insurance. If this has been arranged and agreed upon. If it does, you should send the insurer or plan a copy of your judgment. Together with it is a notice informing them you are a covered dependent under the policy. The insurer must give notice of any cancellation, lapse, or change under the policy. The notice includes instructions for maintaining your current coverage as specified in the judgment.
What alternatives do you have if you lose health insurance because of divorce?
If you do lose health insurance coverage, what are your options? Protection is embedded in federal and state laws. Certain federal and state laws offer options for health insurance.
Certain statutes require group plans to provide a beneficiary with ongoing protection. It protects those who lose eligibility due to a divorce from a covered employee. The coverage provides three years of ongoing group health coverage. And then an option for conversion.
Employer-sponsored group health insurance in the United States covers employees and their families. Employees as per statutes have the right to continue their coverage. It is critical if insurance coverage were to end due to a change in their immediate family or a job loss. The Federal COBRA Act applies to companies with 20 or more employees. It provides certain benefits to employees when insurance coverage ends. COBRA protects this privilege.
Consolidated Omnibus Budget Reconciliation Act more popularly known as COBRA. It is group health, dental, and vision coverage. It offers an option to cover insurance that might otherwise expire. The termination of the coverage is due to a specific qualifying event. The coverage is then temporarily extended.
The employer has 14 days after the divorce to give the documents needed to keep your insurance. The decision to accept the continuous coverage is then yours to make for 45 days. Your insurance coverage will immediately expire. You have to take action within those 45 days. A former spouse has up to 60 days after divorce to respond. You have to confirm if you want to continue receiving insurance through the employer. If you do not, you lose your opportunity to receive insurance via your ex-spouse’s employer.
You cannot always maintain your insurance coverage through the employer of your ex-spouse. It provides only a 36-month extension of your insurance.
Coverage could end early if any of the following scenarios occur:
[ 1 ] You cease payment of the premium;
[ 2 ] The spouse’s employer no longer subscribes to group insurance;
[ 3 ] The spouse’s employer ends or goes out of business;
[ 4 ] You enroll in another group plan. The new plan does not place restrictions on coverage for pre-existing conditions; or
[ 5 ] Your current status becomes eligible for Medicare.
This COBRA extension of your ex-spouse’s employer’s benefits will cost you a lot of money. The COBRA plan has the authority to charge you up to 100% of the premium cost. It will also charge a 2% administrative fee. It is likely to cost hundreds of dollars each month to maintain the same insurance. If you’re unemployed, you might not be able or willing to cover this cost right away after your divorce.
The cost of COBRA insurance renewals is also high. It is 84% of your average monthly unemployment payment.
Michigan does not have a Mini-COBRA Law. It does have one applicable to businesses with 19 or fewer employees. Employees do have the choice to switch to another group health plan. They can switch from a group to an individual self-pay marketplace plan.
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Goldman & Associates Law Firm is here to with information about Child Custody and Divorce in the State of Michigan.