Is COBRA of use to me?

August 21, 2006 7:38 PM

I'm about to be divorced with no insurance.

I have insurance right now through my wife. In other words, I'm on her insurance through her company. Of course, the divorce will change that.

My question is in regards to COBRA. Is is anything that I can use? Or, since it's not my policy, is it of no good to me, in which case I need to go ahead and find a personal policy.

I guess, thought I've read a lot, I still don't have a good grip on COBRA. Thanks in advance.

posted by anonymous to health & fitness (16 comments total)

Yep, you still have the right to continue your coverage through COBRA.
posted by scody at 7:56 PM on August 21, 2006

More from the Department of Labor:

Under COBRA, participants, covered spouses and dependent children may continue their plan coverage for a limited time when they would otherwise lose coverage due to a particular event, such as divorce (or legal separation). A covered employee’s spouse who would lose coverage due to a divorce may elect continuation 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.

Divorced spouses may call their plan administrator or the EBSA Toll-Free Employee & Employer Hotline number, 1.866.444.EBSA (3272) if they have questions about COBRA continuation coverage or their rights under ERISA.
posted by scody at 8:03 PM on August 21, 2006

COBRA coverage is typically expensive. If you're basically healthy, you're almost certainly better off finding a new plan then paying to continue the one you're on now. On the other hand, if you're certain you'll be included on a new group plan in the next half-year or so, or if you have conditions that will make finding an individual plan prohibitively expensive, it might not be a big deal to just pay to continue on your existing coverage and not go through the hassle of applying for coverage.
posted by mzurer at 8:56 PM on August 21, 2006

I think this depends on the state.

I live in Massachusetts. When I was getting divorced (three years ago), I was a full-time student covered under my husband's insurance through his job. I couldn't afford to pay a COBRA premium each month, and my school's insurance was ludicrously inadequate (my MS medication costs my insurance company about $15,000 a year; my school's prescription drug program would have covered only $1,000 of that).

So we wrote into the divorce agreement that he would continue to cover me under his insurance (not COBRA, just his regular insurance from his job) until I graduated and got my own job with my own benefits.

No one, including the lawyer reading the divorce agreement we'd written, seemed to think this was problematic.

So I'd look into that possibility if you're on amiable-enough terms with your wife that you could set up an arrangement like that.
posted by jesourie at 9:57 PM on August 21, 2006

I think this depends on the state.

No, COBRA is federal law -- it applies nationwide for companies with more than 20 employees.

Of course, if your (soon to be ex-)wife is amenable to continuing to cover you on her policy (as per jesourie's situation), that's of course a great option -- but it seems to me that the final say for that actually depends on the insurance policy and/or the employer. In other words, whether or not your wife is willing to keep you on her policy may be irrelevant -- the insurer and/or the employer may not allow you to continue coverage under her policy once you are no longer her legal spouse.
posted by scody at 10:18 PM on August 21, 2006

I believe that states are allowed to add on to COBRA, but not take off, so no matter what state you're in, you'll get at least that. In some you'll get more. But like jesourie said, the QDRO can dictate other arrangements.
posted by small_ruminant at 11:20 PM on August 21, 2006

Of course, the divorce will change that.

Not "of course". My experience was the same as jesourie's (from the other side). Talk to your lawyer.
posted by Kirth Gerson at 4:17 AM on August 22, 2006

Oh, and the clause in my decree said I had to keep my ex on my job's insurance until I remarried, or she did - so it's not just a student thing. Decrees can include all sorts of things.
posted by Kirth Gerson at 4:19 AM on August 22, 2006

No, COBRA is federal law -- it applies nationwide for companies with more than 20 employees.

But the question is actually two questions: 1) Do I qualify for COBRA continuation coverage? and 2) Can I continue on my spouse's plan?

COBRA, yes, is a federal law, but every state has different dealings when it comes to divorce. In MA, for example, as jesourie helpfully and correctly points out, the judge can rule that health insurance must be provided for the currently covered ex-spouse in perpetuity (or until remarriage). I'd echo Kirth Gerson -- talk to your lawyer.
posted by MarkAnd at 4:59 AM on August 22, 2006

Yeah, see if you can get your wife to continue covering you. You will probably have to pay her the difference between what she would pay for a single-person and what she will pay to cover you, but the coverage can go on until one of you gets re-married, which gives you a bit of time to get your own coverage. (Talk to your lawyer, of course)

If you have to get your own coverage, I had a good experience using the NASE when my COBRA ran out; I chose a plan that didn't cover much, but the premiums were affordable and it prevented me from getting bankrupted if a major accident occurred.
posted by Sprout the Vulgarian at 6:46 AM on August 22, 2006

But the question is actually two questions: 1) Do I qualify for COBRA continuation coverage? and 2) Can I continue on my spouse's plan?

The second question is perfectly legitimate avenue for the OP to pursue, but it's not what the OP asked (to wit: "My question is in regards to COBRA. Is is anything that I can use? Or, since it's not my policy, is it of no good to me, in which case I need to go ahead and find a personal policy."). The first part of jesourie's answer implied that his ability to qualify for COBRA would vary state-by-state, which is what I was responding to.
posted by scody at 8:43 AM on August 22, 2006

Others mentioned COBRA is expensive. Perhaps an unnecessary elaboration, but COBRA is often expensive even when compared to identical coverage from the same provider. It's always worth calling the company directly and asking what the rate would be direct. You should also punch up a tentative quote from insurance.com so you have some idea what the variation is like.
posted by phearlez at 9:48 AM on August 22, 2006

if your (soon to be ex-)wife is amenable to continuing to cover you on her policy . . . it seems to me that the final say for that actually depends on the insurance policy and/or the employer. In other words, whether or not your wife is willing to keep you on her policy may be irrelevant -- the insurer and/or the employer may not allow you to continue coverage under her policy once you are no longer her legal spouse.
Nope. the final say is that if the divorce judge, at least where I live. Neither my employer nor their insurer batted an eye when I told them to keep covering my ex.
posted by Kirth Gerson at 10:36 AM on August 22, 2006

It is actually not legal to continue as a dependant on a policy unless you still meet the definition of a dependant under the policy's language. The judge can direct that the spouse is required to provide coverage but cannot direct the employer/insurance companies in their process of coverage as they are not named in the case.

COBRA is automatically avalible to anyone who becomes ineligible for a group insurance policy in the US, but the coverage is limited to continuation of what is avalible at the time for active employees. If you move, you may not be able to continue coverage if there are geographic restrictions.
posted by slavlin at 11:25 AM on August 22, 2006

It is actually not legal to continue as a dependant on a policy unless you still meet the definition of a dependant under the policy's language. The judge can direct that the spouse is required to provide coverage but cannot direct the employer/insurance companies in their process of coverage as they are not named in the case.

This is true, but in states like MA where judges often order health insurance to continue, the insurer allows the continuation of the coverage (often requiring production of the divorce decree) regardless of the contractual definition of dependent. These exceptions are very common, to the point where one MA insurer when updating their enrollment system now has fields for two different spouses (current and ex-). This is what happens when you elect a governor from Utah.

If I were anonymous, I would now be confused. My email's in my profile -- I'm happy to talk it through a little more (I'm an insurance broker licensed in Massachusetts, not a lawyer).
posted by MarkAnd at 2:06 PM on August 22, 2006

I would contact you about it, but I actually work for an insurance company which does business in MA. I don't know that would be appropriate as, if you have a client handled by my company, I would have to contact the team handling the eligibility for them so they can review for possible terminations. As long as I don't know, I don't have to go looking for it :)

I am sorry to put it that way, but I would rather not face that ethical conflict if I don't have to.

Actually, MA has a pretty unique legislation which requires this to be avalible in some very special and specific cases. I have not seen another state with this requirement. It would not apply to a company that pays their claims from their own funds though. Should you work with a client which is actually in another state or a self-funded client, you will want to review this provision carefully.
posted by slavlin at 4:05 PM on August 28, 2006