How Does the Affordable Care Act Affect a Divorce?

When a couple dissolves their marriage, they often have to plan for life without certain benefits they enjoyed because of their marital status. One of these benefits could be health insurance. If you and your children have been covered under your spouse’s employee health plan, the children will retain their coverage, but in most cases, you will lose yours. In that case, the Patient Protection and Affordable Care Act of 2010 (ACA) could impact you for better or for worse.

Your first option is to keep the same benefits temporarily under the Consolidated Omnibus Budget Reconciliation Act (COBRA). The downside to COBRA is its expense: you must pay your premium and the employer’s contribution plus an additional two percent administrative cost to remain with the plan. Since employers often cover as much as 75 percent of the plan cost for their employees, you could be facing a 300 percent increase in your premium.

If you are considering going without health insurance for a transitional period, you need to know that the ACA imposes penalties for failing to buy health insurance. In 2016, the penalty for failing to buy “minimal essential coverage” is the higher of these two amounts:

• 5 percent of annual household income above the tax filing threshold
• $695 per adult

There are exemptions you might qualify for, especially if your income for the year is extremely low. That may also allow you to qualify for a subsidy that will make healthcare coverage more affordable. To learn more about pricing for ACA-approved plans and your eligibility for a subsidy, you can visit healthcare.gov. If your income is too high for an ACA subsidy, you may have to purchase a high-premium, high-deductible policy to avoid the penalty, or you can explore healthcare cooperatives that are exempt from ACA requirements.

The greatest advantage under the ACA goes to newly divorced spouses who would not qualify for medical coverage due to a pre-existing condition. Prior to the ACA’s passage, insurance companies could deny coverage even to people who had been previously insured. Now, even if you are older, have a condition like diabetes, or are a cancer survivor, you can still qualify for coverage.

Because of the potential cost of post-divorce healthcare coverage, spouses should investigate all of their options and make sure the court has all the facts. If you choose divorce mediation, you should present your findings to the mediator so that your healthcare concerns receive appropriate attention when negotiating the division of your marital property and your request for spousal support.

For more information on divorce mediation, call Solutions Divorce Mediation, Inc. at 1.631.683.8172 or contact our Long Island office online.