Divorce and Health Insurance: Things to Remember

Given the costs of healthcare in the United States, it is no wonder that almost all people are concerned about having adequate health insurance coverage. In many situations, one spouse provides insurance coverage for the other spouse and for the rest of the family, if the couple has children. Accordingly, when it comes to separation/divorce, spouses typically find themselves at odds, because they have competing interests. The insuring spouse wants to terminate the other spouse’s coverage as soon as possible, to avoid paying for the additional cost associated with insuring the other spouse. The insured spouse wants to make sure that he or she has coverage for as long as possible, especially if he or she is unemployed or working for an employer who does not provide subsidized insurance coverage.

Thankfully, there is statutory guidance on the issue of health insurance, and it is important to be aware of it to avoid running afoul of the law and risking financial exposure. Provided the insurance is available to the insuring spouse at a “reasonable cost,” which has been defined as no more than 5% of the insuring spouse’s net monthly income, the insuring spouse will have to maintain coverage for the other spouse, until entry of the Divorce Decree. If the insuring spouse does not maintain coverage voluntarily, the court is almost certain to order that coverage be maintained, thereby leading to the same end result. Once the Divorce Decree is entered, the insuring spouse cannot provide coverage for the other spouse any longer, because the spousal relationship is no longer in place, which is a prerequisite for the coverage being available. Of course there may be exceptions to the default scenario. For instance, if the insured spouse can secure better, less expensive coverage through his or her employment or through some other means, then it may make more sense to switch coverage in advance of the Divorce Decree being entered. If there is a spousal support or alimony pendente lite order, then the cost of the insurance coverage will be considered, with some differences depending on whether spousal support or alimony pendente lite is at issue.

With regard to the parties’ children, the obligation to provide insurance coverage does not terminate upon entry of the Divorce Decree and continues until each child’s “emancipation,” which has been defined in Pennsylvania as the later of the child’s turning 18 or graduating high school, absent extenuating circumstances. While the defendant in a child support action usually is the one ordered to provide insurance coverage for the children, the plaintiff may be ordered to provide it instead, if the defendant cannot do so at a reasonable cost. Either way, the party providing coverage will receive credit for the cost, when the support guideline calculation is prepared.

Importantly, being obligated to provide insurance coverage does not mean being obligated to pay for all unreimbursed medical expenses. Responsibility for unreimbursed medical expenses may be allocated between the parties, or they may not be allocated between the parties, depending on the circumstances. When there is a spousal support order in place, responsibility for the recipient spouse’s unreimbursed medical expenses is divided between the parties proportionately to their respective incomes, once the recipient spouse pays the first $250.00 per year; the payor spouse, on the other hand, is solely responsible for his or her unreimbursed medical expenses. However, when there is an alimony pendente lite order in place, the recipient spouse may be solely responsible for all of his or her unreimbursed medical expenses. With regard to child support, responsibility for the children’s unreimbursed medical expenses is divided between the parties proportionately to their respective incomes, once the recipient parent pays the first $250.00 per child, per year. Regardless of whose unreimbursed medical expenses are at issue, it is important to make sure that they have been properly processed through insurance, and that they fall under the statutory definition of a reasonable expense, or the party incurring the expense may be on the hook for the total cost.