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2011: Are You Eligible for COBRA Benefits in Your San Diego Divorce or Legal Separation?

In San Diego Superior Court, when a divorce judgment is entered, many non employee spouses lose their medical insurance coverage since the company of the employee spouse will not allow continuation of medical insurance coverage post judgment. If the divorced non employee spouse does not have access to other medical coverage through other employment, then obtaining private medical insurance can be extremely costly. There is an option called the Consolidated Omnibus Budget Reconciliation Act of 1985 which is commonly referred to as COBRA. This can allow for group coverage to continue even after a divorce. If your case is legal separation, then the marital status will continue since the judgment of legal separation will not terminate the marital status unlike a divorce judgment however whether the medical coverage will continue is dependent on the individual plan. Some employers do not consider a legal separation as terminating medical insurance group coverage through the employee spouse but the vast majority of employers consider a divorce as terminating medical group coverage. As such, whether a legal separation or divorce, it is crucial to know if medical coverage will continue as during the marriage or whether an alternative needs to be obtained.

COBRA is a federal law which requires that group health insurance continue to be covered in the event that the non employees spouse becomes ineligible for continuation of health care benefits due to a divorce [as well as other factual situations]. The employer provided group health plans are normally plans covering 20 or more employees so check with the human resources and/or insurance plan to determine if COBRA coverage is available.

A qualified beneficiary, for COBRA purposes, includes all individuals who, on the day before the qualifying event {judgment of divorce terminating marital status} was covered as a beneficiary under the health insurance plan. A qualified event can include the following: divorce or legal separation; death of the covered employee; a dependent child ceasing to be a dependent child under the terms and conditions of the plan; the covered employee becoming eligible for Medicare and Medicare benefits; termination of the employee {most circumstances} or reduction of hours or laid off work and a bankruptcy of the employer.

The premium for COBRA coverage cannot exceed 102% of the premium which is applicable for beneficiaries who are similarly situated with respect to whom a qualifying event has not occurred. The payor may elect to make the premium payments monthly. In addition, no qualified beneficiary can be denied coverage due to pre existing conditions and there is no requirement of insurability.

The coverage period for COBRA depends on the qualifying event. For a divorce or legal separation, the period for COBRA coverage can be up to 36 months unless one of the following occurs: the qualified beneficiary obtains coverage under another group health care insurance plan that has no pre existing exclusion, limitation or condition; becomes eligible for Medicare; does not pay the premiums within the grace period allowed or the employer ceases to provide a group health insurance plan. For a termination of employment {again most circumstances} or for reduction of hours, the period for COBRA coverage can be up to 18 months with the same termination of coverage conditions as with a divorce or legal separation as above.

If you have questions regarding your medical coverage in a divorce or legal separation, please contact us for a confidential consultation.

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