Tag Archive for: health insurance

Congratulations! Your Divorce is Final! Now What?

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A divorce starts a new chapter of your life. But even after it’s final, your life will not turn on a dime, especially if you share children with your ex-spouse. There will be loose ends to tie up and details to address. Where do you start? 

What’s in Your Divorce Agreement? 

The divorce agreement is part of your divorce order. It will require you and your spouse to do certain things by given dates. Some things are time sensitive, like changing property titles and deeds. 

Compile a list of what needs to be done and when, and calendar each task. You must honor your end of the bargain and keep track of your spouse’s obligations, so if they miss a deadline you’ll know about it.   

If you have a qualified domestic relations order (QDRO), it’s a court order that may require one of you to share your retirement savings with the other. It’s often part of the process that divides spouses’ assets, and their requirements are time-sensitive. 

Will You Need Health Insurance? 

Unless you’re old enough for Medicare, have health insurance from your employer, or already purchased it yourself, you’ll need health coverage. If you got it through your spouse’s employer, you could continue it through the COBRA process for up to three years. This is probably pretty expensive, so you might just want it to be a bridge to more affordable coverage. One option may be an Affordable Care Act (ACA) plan or a policy you buy from an insurance agent. 

If you have kids and your ex-spouse gets medical benefits from work, maintaining that coverage is probably the best option. If not, COBRA or the ACA may be good options. 

What’s Your Credit Score? Is it Getting Better or Worse? 

Protecting your credit score will allow you to borrow money and get lines of credit at the lowest interest rate possible. Here are post-divorce steps you can take, according to AARP: 

  • Close joint accounts: Your ex-spouse may run up debts and be late with payments or not pay at all. Inform creditors of your divorce and that you’re not responsible for further debts. 
  • Get monthly statements: If joint accounts have outstanding balances, these statements will show you’re making timely payments. 
  • If you move, file a change of address notice with the U.S. Postal Service: If you don’t get a bill, you won’t pay it, and that will harm your credit score. If you pay bills online, getting monthly statements or changing your address won’t be issues. 
  • Use credit cards wisely: Don’t engage in binge “retail therapy” shopping if you feel depressed. You’ll only feel worse when you get the bill, and your credit score will suffer if you don’t make payments on time. 
  • Regularly check your credit reports: See if there are any errors or problems caused during your marriage or divorce. Take action if you find them. 
  • Freeze your credit files: Given your spouse knows your Social Security number and other critical information, you may fear they may engage in identity theft. If so, a credit freeze should prevent any new accounts from being opened in your name 

Be proactive because preventing financial problems is easier than unwinding them after they happen. 

Have You Updated Your Estate Planning? 

If you had estate planning done during your marriage, you likely named each other as your primary beneficiaries. You probably don’t want your assets going to your ex now, though you may feel they can handle being a trustee for a trust that benefits your children. Make sure your estate plans accurately reflect your wishes.

Is Your Divorce Over, But You Still Need an Attorney? 

We will fight to protect your interests and work to ensure you’re in the best position possible after your divorce is final. Contact Karen Ann Ulmer, P.C., Attorneys at Law, for a free consultation so we can discuss your situation and how we can help. 

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Healthcare for Children after a Pennsylvania Divorce

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When couples with children divorce, many child custody issues need to be addressed, including who will pay for the children’s health insurance and out-of-pocket medical costs. If parents cannot come to an agreement out of court, the judge will decide for them. In Pennsylvania, certain general standards are followed, which may be adjusted to the family’s particular circumstances.

Who provides health insurance coverage?

The judge will look at factors such as whether one or both parents have access to employer-sponsored health insurance, the relative benefits, costs of each, and which parent is currently providing insurance. Generally, but not always, the parent paying child support and/or having the higher income will be responsible for providing health insurance coverage. In some circumstances, the cost of providing health insurance will be split between the parents, in the amount proportionate to their incomes.

According to PA law, if neither parent is able to provide medical insurance, either because there is no employer-sponsored plan or because the plan exceeds “reasonable cost,” defined as 5% of net monthly income, the court may order that the child be covered under a PA government-sponsored plan.

Within 30 days of the court order, the parent providing coverage must submit written proof to the other parent that insurance has been obtained, including insurance cards and other necessary materials.

Who pays for copays and other out-of-pocket expenses?

Copays and other medical expenses in excess of $250.00 are allocated proportionately to the parents’ income. Medical expenses include surgical, dental, optical, and orthodontics, but not cosmetic, chiropractic, or psychiatric care unless so ordered by the court.

Since doctors and hospitals do not automatically allocate their bills to each parent, contact their billing offices and establish a contract defining what percentage of each bill should be charged to each parent. Both parents should sign the contract. This will avoid having the custodial parent receive the bill and be held responsible for paying it in full, leading to either a struggle to get reimbursement from the other parent or being hounded by bill collectors.

When does the obligation to provide healthcare insurance end?

Unless otherwise stipulated in an agreement or court order, a parent’s responsibility to provide health insurance ends when the child turns 18 or graduates from high school, whichever is later.

Whenever possible, divorcing couples should work to develop an out-of-court agreement, with the help of an experienced divorce lawyer, so that no stone is left unturned and no loophole is missed. By doing so, both parents maintain control over the situation and avoid turning over to a judge the final decisions that will so closely affect their own futures and the futures of their children. Contact us here at Karen A. Ulmer, P.C. to see how we can help you.

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Health Insurance in Divorce

One frequent question in the context of divorce is what will happen to health insurance coverage. Generally, a spouse should not drop the other spouse while a divorce is pending. Health insurance is often addressed in the context of support and spouses are obligated to provide support for each other during the marriage. A support order can mandate a spouse to continue to provide health insurance. The obligation to carry health insurance for the other spouse ends at the entry of the final divorce decree. If you are unable to obtain alternate health insurance on your own right away you can look into COBRA coverage but this can be very expensive. More affordable options may be available on the healthcare marketplace.

If there are children between the parties, the children may remain under the health insurance coverage presently provided. There may be an adjustment to any child support award based on who is paying the premiums on the health insurance for the children. Child support will end when the child is eighteen or graduates high school, whichever is later. After court-ordered child support ends there is no longer a requirement for the parents to share the cost of the child’s health insurance however a parent may elect to continue to provide coverage for the child up until the maximum age of 26. Parties with private agreements can contract to continue to share this cost.

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Post-Divorce Healthcare Options

Once a divorce decree is issued, entitlement to health benefits as a spouse terminates. COBRA was enacted in 1986 and allows temporary healthcare continuation at group rates for ex-spouses. The ex-spouse is responsible for the entire premium. In that regard, it will likely be more expensive than the rate for the employee who is likely receiving an employer contribution toward the premium. Employers with 20 or more employees are required to offer COBRA coverage. The maximum coverage period in the event of divorce or legal separation is 36 months.

A new alternative to COBRA coverage is the healthcare marketplace. Enrollment is generally at the start of the year however, enrollment is possible throughout the year if there is a qualifying event. Losing prior coverage as a result of divorce, having or adopting a baby, and getting married all constitute qualifying events. The marketplace will generate the plans available based on household income, location and tobacco use. There are four plans ranging from bronze plans which cover 60% of expenses to platinum plans which cover 90%. The monthly premium correlates with the percentage of out-of-pocket expenses that will be covered. The lower the monthly payment the higher the out-of-pocket expenses will be. All plans include routine doctors visits and preventative care, prescriptions, hospitalization and maternity care.

Medicaid is also an option. Eligibility for Medicaid coverage is based on adjusted gross income in relation to federal poverty levels.

Click here to read more about support.

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Insurance Policies

Questions regarding insurance policies often come up in the context of a divorce. Married couples may have commingled auto insurance policies, health insurance plans, and/or life insurance policies with their spouse as beneficiary. Technically, there are no rules on maintaining certain policies that existed at the commencement of the divorce in the sense that there is no automatic punishment or sanction for dropping these policies at separation. On the other hand, the courts have the power to order certain policies be maintained through their general equity powers in the period between separation and divorce. Perhaps, the most prudent action is to maintain all policies until finalization of the divorce or other mutual agreement or seek the advice of an attorney first to avoid the potential of additional fees that may be incurred if you are ordered to reinstate any policy and/or be responsible for any liability incurred while the other party was uninsured. Additionally, as it relates to health insurance specifically, it is routinely ordered as part of a support action and unreimbursed medical expenses, which can be substantial if there is a lapse insurance coverage, will also be shared.

Section 3502(d) of the Divorce Code provides that the court can order the continued maintenance and beneficiary designations of certain policies or even the purchase of new policies as part of equitable distribution. For example, life insurance policies may often be utilized as part of an equitable distribution award to ensure the receipt of ongoing support obligations such as alimony. If there is no agreement or Order on life insurance policies post-divorce, the insured should update their policies immediately to reflect their desired beneficiary. Pennsylvania estate law does provide that post-divorce the ex-spouse is no longer entitled to receive payment on the policy even if the beneficiary designation on the policy was never updated. However, this will only be the end result for a private policy. Policies sponsored by an employer are governed by federal law and under ERISA, the proceeds must be paid per the plan documents regardless of the termination of the marriage.

Click here to read more on insurance policy designations.

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Health Insurance for Children

Health insurance for minor children is an issue dealt with in the context of child support. If the children are presently covered under a plan through one of the parents, the children can remain on that plan. The other parent would then contribute to the premium being paid if applicable. This can be achieved by an increase over the guideline support amount if the party receiving support is paying the premium or a decrease if the parent who is receiving support is not the one providing the coverage. A change in which parent provides the coverage may be beneficial if one parent’s coverage is better than the other or less expensive but with similar coverage. Sometimes, the motive in changing plans is for the parent paying support to reduce the support paid directly to the other parent by adding the children to their plan instead.

If the children are receiving health insurance at no cost to either party it does not affect the guideline support amount. This may happen if one of the parents is employed by a company that covers 100% of the premium. This can also occur if the children are insured through a government program such as medical assistance or CHIP (Children’s Health Insurance Program). Health insurance is only to be provided by one of the parents if at a reasonable cost. The court does not go so far as to mandate health insurance regardless of the financial circumstances of the parties. Again, thanks to programs like CHIP it is possible to ensure the children have health insurance even if the parents cannot afford it. However, even parents should reconsider the financial consequence of not having health insurance given the enactment of the Affordable Health Care Act and the penalties of failing to obtain health insurance going forward. Subsidies may be available based on income to ensure health insurance coverage at a reasonable cost.

 

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