Medical Insurance Blues

Many divorcing couples do not realize that when the marriage is over the nonworking spouse (usually the stay-at-home mother) needs to obtain medical insurance. Two-career professional couples may be better positioned to face the insurance problem because each has the option of employer-paid insurance.

Uninterrupted medical insurance for children should always be negotiated. Normally the noncustodial parent (usually the father) receives this benefit as part of his employee group insurance plan.

Divorcing couples often negotiate health and dental insurance for dependent children as part of their separation agreement. They reach agreement so that dependents have continued and uninterrupted medical insurance coverage as a part of the final decree in a divorce. Sometimes this takes the form a Qualified Medical Child Support Order (QMCSO).

When children are insured by a noncustodial parent, the custodial parent should secure a plan description. A QMCSO must identify the participant, who is the employee spouse, and the name of those covered, who are the children; describe the coverage provided and the duration of the coverage; and state the name of each plan to which the order applies.

Some employers have forms by which a QMCSO can be executed. If not, a lawyer can draft one.

Like a QDRO, a QMCSO is incorporated into the marital settlement agreement, and it has the force of court order.

In some cases, this qualified order can be part of COBRA coverage that also protects the former wife. A nonemployee spouse in a terminated marriage is entitled to COBRA coverage at his or her own cost for up to thirty-six months. This is not easy for many divorcing couples. COBRA — Consolidated Omnibus Budget Reconciliation Act, a federal law that guarantees that all individuals who are covered by medical insurance have the right to continue coverage for a monthly fee if employment or marital status changes — is very expensive, and the time line for signing up must be religiously observed. The employee spouse must inform the health plan administrator within 60 days of the final judgment of the divorce for the nonemployee spouse to be covered. This notice sets in motion other steps, the time limits of which must be carefully observed. COBRA protects ex-spouses even after one of them remarries, for a fixed period of time, as well as employees who lose their positions.

Divorcing couples should realize they may be locked out of medical coverage if they are order or have pre-existing conditions.

It is best to negotiate a settlement that covers the premium, or at the least be prepared to make drastic reductions in the standard of living to cover the cost of private insurance, which is astronomical.

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