COBRA And Divorce

Arizona group health insurance coverage ends for the dependent spouse once divorced.

The divorce is a qualifying event, meaning the spouse may enroll in COBRA or an individual ACA plan within 60 days of the divorce. Enrolling in a short-term health insurance policy during this time disqualifies the spouse from COBRA benefits. COBRA benefits may last for up to three years. If the spouse is employed, they may enroll in their employer’s plan during the special enrollment period of 60 days.

Dependents and children may also enroll in COBRA or an Arizona individual ACA health insurance plan due to divorce. The cost of COBRA coverage is identical to the premium amount the employer was paying on the employee’s behalf, plus a small administration fee. Many are shocked when first learning the premium costs involved, never realizing just how much the employer was spending each month to cover the employee and family.

It is important that the divorced spouse take it upon themselves to contact their insurer or spouse’s employer within the 60-day window to obtain COBRA coverage or enroll in an individual ACA policy. Divorced individuals may not remain on employer group coverage as a dependent. If the divorced spouse or dependents are in reasonably good health an Arizona short term health insurance policy lasting up to three years should be considered. Arizona short-term policies costs less than half that of an ACA plan (assuming the applicant does not qualify for a federal subsidy) or COBRA.

COBRA regulations are a bit confusing. It would seem, based on the regulations, that a spouse’s group coverage should end once a legal separation is documented. Many employers do not recognize a legal separation as grounds for COBRA though, instead insisting on a formal divorce decree.