Health Insurance Coverage After Your Divorce
One of the biggest worries people have when getting divorced is how they will get health insurance once they are single. Despite the Arizona Legislature’s attempts to promote it, one of the most unknown health insurance solutions is that a spouse has the option to stay on their former spouse’s employer-provided health plan for up to eighteen (18) months after the divorce decree is signed.
The Legislature wants people to know about this option—in fact, they require that the person filing for divorce fill out and provide the other spouse with a Notice that informs both spouses of this option. See A.R.S. § 20-1377(K). This is generally referred to as a Notice to Convert Health Insurance, though the current document has a much lengthier title: “Notice of Your Rights about Health Insurance Coverage When a Petition for Dissolution (Divorce) is Filed.” The Notice is prepared, and regularly updated by the state government’s director of insurance. The full Notice is available here.
Despite the fact the very first thing stated on the Notice is “Warning: This is an important legal notice”, hardly anyone bothers to read it. But everyone getting divorced in Arizona is required to get the Notice. To those who take the time to read it, the Notice answers some important questions.
Frequently Asked Questions about A.R.S. § 20-1377(K)
Can I stay on my spouse’s employer-provided insurance after the divorce?
For most people, the answer is yes, you can. (We will discuss the exceptions below.) The Notice says, “Arizona law allows the dependent spouse and/or children to continue to be covered, but you must take some steps to protect your rights.”
How do I take the correct steps to protect my rights? Should I notify my former spouse’s employer that I wish to continue on the health insurance plan.
Confirm in writing to your spouse’s employer that you would like to continue your coverage on the health insurance plan and keep the evidence that you made the request. Under A.R.S. § 20-2330(C), if your spouse’s employer has less than 20 employees, and you use the state’s form, and fill it out correctly, you have completed this requirement.
You can find that form here.
Is my spouse’s employer required to contact me about this option?
The Notice itself does not mention this, but A.R.S. § 20-2330(B) requires an employer to notify you in writing within “forty-four days” of a qualifying event of your right to continue coverage (divorce is a qualifying event).
So why doesn’t the Notice state that? That’s a good question. Our guess is the director wants the person waiting on coverage to be proactive and not be waiting around to get a notice from their former spouse’s employer. Some employers might not send the notice, some might drag their feet in enrolling in it; some might not even be aware that the law requires them to do this. If you want to maintain your health insurance, you need to get going on it as soon as possible.
Here’s what the Notice does state, “If you are covered by your spouse’s health insurance, and you want to continue to be covered after the divorce is final, you must contact the insurance company as soon as possible.”
Can children stay on the same policy?
Yes, they can. Generally, the Court as part of a child-support plan will order one of the parents to provide the child(ren)’s health insurance. For children who are not covered by that order, either because of their age or another circumstance, the Notice says, “If you choose to continue coverage as a dependent spouse, you can also choose to continue coverage for your dependent children if you are responsible for their care or support.”
Who pays for my insurance—me, my former spouse, or my former spouse’s employer?
You do. You are electing to stay on the same plan, but neither your former spouse nor their employer is required to pay your premiums. In fact, your failure to pay the premiums permits the employer to cancel your coverage. See A.R.S. § 20-1377(I)(1).
When is my first payment due?
The Notice says, “[Y]ou must start to pay the monthly insurance premium within 31 days of the date the insurance would otherwise stop.”
Will I be on the same plan I was previously?
Maybe. Here, the insurance company is given a choice—they can continue your coverage or change your policy into a new policy. Here’s what the Notice says, “If you decide you want to be covered, the insurer can choose whether to continue coverage under the current policy, or to change the policy to your name. If the policy is changed to your name, it is called a “converted” policy. If the policy is converted by the insurer, the insurer must provide you the same or the most similar level of coverage available, unless you ask for a lower level of coverage.”
Can the insurer consider pre-existing conditions in deciding whether to offer me a new policy?
How long can I stay on this COBRA plan?
For up to eighteen (18) months, with some exceptions, such as if you become Medicare-eligible or when you obtain any other health care coverage. A.R.S. § 20-2330(H). What is hoped is that sometime within the 18 months, the insured spouse will be hired at a job that provides health insurance benefits.
What are the exceptions to my former spouse’s employer continuing to provide my health insurance?
There are two exceptions: First, if you are Medicare-eligible, they do not need to insure you. The Notice says, “You may not be entitled to continued or converted coverage if you are eligible for Medicare or for coverage by other similar types of insurance which together with the continued coverage would make you over-insured.”
Second, your spouse may work for an employer who does not qualify to provide this insurance. That seems unlikely, though, because federal law (COBRA) requires employers of 20 or more employees to provide this coverage, and state law (mini-COBRA) requires small employers to do the same. See 29 U.S.C. § 1161-1169, A.R.S. § 20-2330, and A.R.S. § 20-1408(A). The state defines a small employer as “an employer that employs an average of at least one but fewer than twenty eligible employees during the preceding calendar year.” A.R.S. § 20-2330(N).