Getting Back on Track

Making Decisions on Your Health Plan

According to leading financial expert and author, Neale Godfrey, 85 percent of women make their financial decisions in times of crisis. Significant life changes like a separation or divorce typically bring about a period of personal and financial reassessment. Protecting your health insurance is an important part of any financial plan.

All too often, divorce can result in the loss of health insurance. Because women more frequently depend on their spouses for coverage, they are usually at a higher risk for losing health insurance. In times of transition, reviewing your coverage needs is essential. According to a Plan for Your Health^SM survey of women ages 24-44, recently separated, divorced or widowed women actually spent less time reviewing their health plan options than other women. Only eight percent of women experiencing this type of life change in the past year said they spent two or more hours researching health plans.

Here are some tips on ways to consider your choices:

• Whether or not you choose to continue on your ex-spouse's plan, it is important to have medical coverage in place quickly, without interruption.
• Many divorced parents list their children as dependents on each individual plan, one plan serving as "primary" and the other as "secondary." Primary pays the cost of the claims first; secondary takes care of the remaining costs.
  • If your children are covered through both of your group plans (not always the best idea because of the double cost), primary coverage is through the spouse with the earliest birthday, or a group plan takes precedence over an individual plan.
  • Getting a "Qualified Medical Child Support Order" can help you deal directly with the insurance plan for claims instead of through your spouse.

• You may be eligible to purchase non-group insurance, COBRA, or the right to temporarily continue health coverage at the previous group rate.
• Typically, you are able to continue coverage for up to 36 months; however, the individual is responsible for the full cost of COBRA premiums without help from their previous employer.

Here are some other financial and insurance tips to consider with a divorce:

• Spouses who will be paying child support should have enough life insurance for themselves in order to secure court-ordered obligations. The key here is for the other spouse to make sure the insured doesn't change beneficiaries or simply drop the policy without notice (don't forget policies at the workplace).

• Many divorce experts recommend that the person providing child support payments have enough disability coverage in order to continue payments in the event of a temporary or permanent disability. And, the person taking care of the children also should have coverage, assuming he or she works. Review the policy to see whether you need to increase the amount.

• If you are not a "named insured" on your homeowner's insurance policy, your personal possessions won't be covered once you divorce. And if you move out of the house before the divorce, generally insurers will limit coverage of your personal possessions to only 10% of their covered value, even if you are a named insured.

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