Continuation of medical insurance after a divorce is a major concern, especially when one party has been covered under an employment benefit of the other party. In 1986, Congress passed the Consolidated Omnibus Budget Reconciliation Act, which is commonly referred to as “COBRA”.
COBRA, among other things, as it pertains to family law, allows former spouses to continue receiving benefits after a judgment of divorce or separate maintenance is entered so long as the plan meets specified criteria for continued health plan coverage. Typically, COBRA benefits covers health plans maintained by private-sector employers with 20 or more employees, employee organizations, or state or local governments.
COBRA does not, unlike other federal statutes such as the Family and Medical Leave Act (FMLA), require the employer to pay for the cost of providing continuation coverage; instead it allows employees and their dependents, or the beneficiary, to maintain coverage at their own expense by paying the full cost of the premium the employer previously paid, plus up to a 2% administrative charge. While this is supposed to be less expensive than individual health care coverage, this is not always the case.
A covered employee’s spouse who would otherwise lose their coverage due to a divorce may elect to continue coverage under the plan for a maximum of 36 months. A qualified beneficiary must notify the plan administrator of a qualifying event within 60 days after divorce or legal separation. After being notified of a divorce, the plan administrator must give notice, generally within 14 days, to the qualified beneficiary of the right to elect COBRA continuation coverage, and what will be required of them. You should try to inform the health plan administrator, in writing, as soon as your Judgment of Divorce or Separate Maintenance is entered. If you miss any of the required deadlines, your ability to elect COBRA benefits could be forever lost.
Health care benefits are a very important issues and it is important the coverage remain continuous. Our Plymouth, MI family law office will thoroughly discuss your health care options for you and assist you in determining whether or not COBRA is right for you.