Divorce FAQ

Going through the divorce process can put a lot of strain on your life. Dealing with divorce can be a struggle on a lot of aspects in your life. Even your insurance coverage and health coverage can be affected by it. It's a good thing that the Consolidated Omnibus Budget Reconciliation Act (COBRA) may help you out with this issue.

The COBRA requires certain employees to provide their employees and qualified family members with health insurance (at group rates) at the onset of qualifying events. Such qualifying events include divorce and separation.

Are all employers required to follow COBRA health care provisions?
No. Only employers that have 20 employees or more are required to cover their employees under COBRA's provisions, and this does not include employers of federal government or church-related organizations.

What policies are covered by COBRA?
COBRA applies to group health care insurance plans which also cover dental, eye care prescription, and prescription drugs. COBRA does not apply to life insurance policies.

What exactly does the COBRA health care provisions entail?
In a nutshell, the provisions of COBRA allows the covered employees as well as their qualifying dependents to temporarily retain their existing group health care coverage which would otherwise be lost should the employee get divorced or separated (or at the onset of other qualifying events). They will still have to pay the premiums, but since it would be under a group coverage, it would be at a significantly lower rate.

What are these "qualifying events"?
For employees, the "qualifying events" include termination of employment (both voluntary and involuntary, as long as it's not because of a gross misconduct), as well as a reduction of work hours.

For the spouses and children of employees, "qualifying events" would include divorce, legal separation, death of the employee, or when the employee becomes eligible for Medicare coverage.

Can you get COBRA coverage for as long as you want it?
No. In cases of divorce or legal separation, the COBRA coverage from an ex-spouse's employer will only last for three years. In other cases, it would be even shorter than that (terminated employees, for example, only get this coverage for 18 months). This is provided that you pay the COBRA premiums that you need to pay, plus a possible 2% service charge that could be charged by the employer.

Can an employer refuse to grant COBRA coverage?
If the employer refuses to grant COBRA to eligible employees, they may be fined $110 a day per dependent if he/she for failing to comply with the provisions of COBRA. Should the dispute result to litigation, the employer will also end up paying for your attorney fees and other legal fees as well.

If you just recently went through a divorce, it would mean a lot if you can find out whether you can still get COBRA coverage. The employers must give you a notice of eligibility 60 days after your divorce. The financial impact of the divorce can be softened a bit if you have safety nets in place for the times when you will need them most.