Senior Health Benefits and Divorce in Texas
One Detail Seniors Absolutely Should Not Forget When Considering Divorce
Of the many critical concerns and decisions to be made when a couple has decided to end their marriage, health insurance is often overlooked until the end. This can be a problem at any age, but according to a recent study by the Journal of Gerontology, one out of four U.S. divorces involve people over 65. Given the issues and expense of this insurance, couples may need to carefully consider what happens to their coverage (and its cost) if their divorce is finalized.
The least contentious scenario is if both parties are employed full time with benefits. Once divorced, their respective HR departments will notify their insurers of the qualifying change in status, payroll deduction will be adjusted, and coverage will continue for each. However, the family benefits are often being provided by one party. In Texas, a former spouse is not required by law to provide and pay for insurance for the other, but it can be included for a period of time in a mediated or court settlement ONLY if the insurer allows it. Most of the time, they DO NOT except through COBRA. This has to be handled very carefully for the spouse who will be uninsured after the divorce. There are specific time limits and methods for exercising this option, it is expensive (see below) and 18 months is the limit time period. If the primary insured plans to leave his/her job or retire, COBRA benefits are also an option. However, maintaining health insurance through COBRA can be prohibitively expensive (without the employer contribution, you will be paying the entire premium every month). Keep in mind that children can generally be kept on health plans (including those provided through COBRA) until the age of 26.
The Health Insurance Marketplace
If a divorce will result in one or more family members losing coverage, the marketplace (healthcare.gov) is an option. Keep in mind that these plans are available to all (including older applicants) without health questions or screening for pre-existing conditions – a great benefit for seniors who might have lost some spring from their steps. Using the marketplace also unlocks government subsidies, which are based on your stated income and phase out the more you earn. A divorce is considered a qualifying life event, so coverage could be obtained outside of normal open enrollment periods. With plans available at the bronze, silver, and gold levels (from least to most comprehensive), the marketplace can be a valuable resource. Dental and vision coverage is also available for applicants of all ages. These concerns should be addressed early on in the divorce process, as obtaining coverage takes time.
The Question of Medicare
If one spouse is already enrolled (or eligible to enroll) in Medicare, divorce can jump start additional discussions. Planning is sometimes aided by knowing when existing coverage will end. Anyone 65 or older is guaranteed acceptance into Medicare, and losing employer-provided coverage is an event that provides applicants with a special enrollment period. It is important to avoid delay if applying for Medicare. The process can take time and you want to avoid a lapse in coverage. Benefits known as “Part A” are free (other optional coverage tiers are usually deducted from social security benefits or billed directly). Anyone working (and paying Medicare taxes) for 10 years is eligible for free Part A coverage (which includes inpatient hospital care, nursing, home health and hospice services). If a spouse does not qualify on his/her own work history, they can qualify on the history of the ex-spouse. As long as they were married ten years or longer, free Part A coverage could begin at the age of 62. If a spouse remarries, he/she can obtain Medicare through the work history of the current spouse under the same age rules. Keep in mind that these are Federal plans and the divorce will be granted/heard in a State court. The divorce judge has NO authority regarding Medicare. To know your options, it is advisable to check either with an elder law attorney or call Social Security directly.
Don’t Gamble on Insurance
Yes, medical insurance is expensive, and couples involved in divorce proceedings may feel they have bigger issues to resolve. Don’t put it off. When you consider that a simple appendectomy can add up to $50,000 or more in hospital, anesthesia, surgical, drug and other charges, it’s not a risk worth taking. Medical and other insurance for ex-spouses and family members should be discussed during settlement negotiations due to its cost and importance. If you have any questions on how to address medical insurance during a divorce, or would like more information, please feel free to contact the Essex Law Firm for an in-person or virtual consultation.