Michigan Divorce - Health Insurance 

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COBRAs effect on Michigan Divorced Spouse's Health Insurance

     Many times in a marriage, the married couple has insurance through only one of the spouses’ employers. When a divorce happens in Michigan, only one party can keep the insurance, the other is left without coverage?
     The Consolidated Omnibus Budget Reconciliation Act (COBRA) has answered this question. It may be possible to still get insurance coverage through your ex-spouse’s employer, even though you are no longer married to an employee of that company. Like you might expect, there are a lot of hoops to jump through if you want to continue your insurance coverage, but for some families who may have trouble obtaining insurance otherwise, this can be an excellent option. Thousands of former spouses remain covered by the same insurance they had while still married. Using COBRA to continue this coverage is a very common practice all through Detroit, Oakland County, Washtenaw County and Macomb County. In fact, because Michigan has a few very large employers, COBRA insurance coverage is commonly discussed in a Judgment of Divorce.

The Law Regarding COBRA

     The first thing to know is that COBRA only applies if the insurance was a group plan through a company that had at least 20 employees the year before the divorce. If there were the requisite number of employees at the company, the employer has 14 days after the divorce to provide you with materials that will allow you to continue insurance coverage through them. You will then have 45 days to choose to accept the continued coverage. If you do nothing during those 45 days, your insurance coverage will be automatically terminated. That means as a former spouse, you have up to 60 days after your divorce to tell the company you would like continued insurance coverage through them or else you will miss your chance to get insurance coverage through your ex-spouse’s employer.
     If you do elect to continue to receive your insurance coverage through your ex-spouse’s employer, you cannot keep it forever. Rather, it is a minimum 36-month extension of your insurance that may terminate early if:
  • you do not pay the premium,
  • the employer no longer offers group insurance,
  • the employer goes out of business,
  • you obtain insurance through another group plan that does not have limits for pre-existing conditions, or
  • you become eligible for Medicare.
     Expect to pay a lot of money for this extension of your ex-spouse’s employer’s insurance benefits under COBRA. The COBRA plan can charge you up to 100% of the cost of the premiums plus another 2% administration fee. Therefore, in order to get the same insurance you had before, it is likely to cost hundreds of dollars each month. This may not be an expense you are willing or able to pay at the time immediately following a divorce in the Lansing area, especially if you are unemployed. One study determined that the average cost for insurance extensions under COBRA equaled about 84% of the average monthly unemployment benefit. Thus, it may not be worth it to get extended insurance coverage through your ex-spouse’s employer under COBRA following a divorce. Many newly-divorced people choose to go without insurance or attempt to buy a cheaper policy on their own. For those former spouses with pre-existing conditions, however, finding insurance is going to be hard and the policies will be costly all through Mid-Michigan. In that case, it might be worth it to pay the high cost of COBRA insurance to keep insurance through an ex-spouse’s employer. This is an important financial decision and should be thoroughly discussed with your attorney, accountant or financial advisor.
   If you would like to have a free consultation with an experienced attorney, kindly contact The Cutler Law Firm at 248-489-8780 or completeTHE CONTACT FORM and an Attorney will promptly respond to your inquiry. 
Health Insurance After The Divorce - Michigan Lawyers - freeconsultation
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