What You Need to Know in New Jersey About Post-Divorce Health Insurance Coverage

Divorce changes everything, including your health insurance. Learn what steps to take in New Jersey to secure coverage for yourself and your family post-divorce.

Did you know that each year, around 115,000 women lose their private health insurance due to divorce, with more than half remaining uninsured? This issue is especially pertinent in New Jersey, as a divorce nullifies an ex-spouse’s coverage under an employer-sponsored plan. Whether you’re finalizing a divorce or planning for the future, understanding your options for post-divorce health insurance is a must, not a maybe.

How Divorce Affects Health Insurance Coverage in New Jersey

When a divorce is finalized in New Jersey, the spouse, who’s included as a dependent on their partner’s health insurance plan, loses coverage. This leaves the dependent spouse responsible for finding new coverage. However, until the divorce is legally complete, you can remain on your spouse’s policy. 

If children are part of the marriage, their insurance coverage remains intact as they depend on both spouses. The parent maintaining the child’s health insurance coverage should only drop it during the divorce proceedings if there’s an agreement to transfer coverage to another plan. 

Impact of Divorce on Employer-Sponsored Health Plans

New Jersey law protects both spouses from any immediate changes in health insurance coverage when divorce proceedings begin. Once a Summons for Dissolution of Marriage is filed, both spouses can only remove the other from an employer-sponsored plan with court approval. The court issues a Certification of Insurance Coverage and an Automatic Temporary Restraining Order (ATRO) to ensure coverage remains in place during the divorce process. 

Once the divorce is finalized, the dependent spouse is no longer eligible to stay on the employer-sponsored health insurance plan. That’s why it’s important to begin exploring alternative health insurance options as early as possible during the divorce process.

Legal Requirements for Spousal Coverage Post-Divorce

New Jersey’s legal framework doesn’t allow a former spouse to remain on a health insurance policy after divorce. However, federal law under the Consolidated Omnibus Budget Reconciliation Act (COBRA) permits continued access to the same plan for up to 36 months. You must pay the entire premium costs, including the portion previously covered by the employer. 

During divorce settlement negotiations, you may request that COBRA costs be factored into the financial arrangement. COBRA is a popular option for those needing temporary coverage while exploring other health insurance plans. Just request COBRA coverage within 60 days of your final divorce decree to avoid complications. 

Children’s Health Coverage After Divorce

Children’s health insurance coverage generally continues through the spouse providing it. If the custodial parent decides to move or switch jobs, alternate arrangements may need to be made. 

New Jersey law mandates that children remain insured, and coverage options play a role in child support obligations. Courts may require the noncustodial parent to maintain a health plan for the child or allocate the premium cost between both parents. A Qualified Medical Child Support Order (QMCSO) can also grant the custodial parent access to the noncustodial parent’s employer-sponsored health plan for the children. 

No matter who provides the plan, ensuring the child’s coverage continuity is a priority. 

Health Insurance Options After Divorce in New Jersey

If you’re navigating health insurance options following divorce, here are the primary choices available to you in New Jersey:

Employer Coverage

If you’re employed and eligible for your company’s health insurance, confirm the enrollment periods with your HR team. This option is often the most seamless, given the pre-negotiated rates and comprehensive coverage. 

COBRA Coverage

COBRA lets you continue using your spouse’s health insurance plan for up to three years. While convenient, it tends to be expensive since you bear the full cost of the premium. It’s worth negotiating its inclusion in your divorce settlement to minimize financial strain.    

Marketplace Coverage via the Affordable Care Act (ACA) 

New Jersey’s ACA marketplace, Get Covered NJ, offers diverse health insurance plans. You can tailor your plan to suit your financial and medical needs, from basic to extensive coverage. Visit GetCoveredNJ to compare policies and explore subsidies, which make many plans affordable. 

The Healthcare.gov website is an additional resource for any questions you may have about the plans on the ACA marketplace. These options provide flexibility depending on your employment, budget, and coverage needs.

What to Do if You’re the Custodial Parent (With Children) After Divorce

Custodial parents typically retain health insurance for their children under their current plan. If this isn’t feasible, the children may transition to the other parent’s policy or a new plan altogether. 

The cost of insuring children will be incorporated into financial arrangements within the divorce agreement, following the New Jersey Child Support Guidelines. While private plans are most common, state-mandated options like Medicaid may be available for those who qualify. 

Regardless of the decision, children can only be left with adequate coverage. Their health needs must be met irrespective of custodial outcomes. 

Common Mistakes to Avoid When Handling Health Insurance After Divorce 

Failing to Act Quickly 

Timelines matter when transitioning to a new health insurance plan. Missing COBRA or ACA marketplace deadlines can leave you without coverage, leading to potential financial and medical risks. 

Assuming You Can Keep the Same Benefits 

Once divorced, you can’t legally stay on your former spouse’s insurance plan beyond temporary COBRA coverage. Plan for new coverage that suits your individual needs. 

Not Exploring All Plan Options 

Take the time to compare plans available through the ACA marketplace, Medicaid (if eligible), or private insurers. The best plan will consider both affordability and comprehensive coverage. 

By avoiding these mistakes, you can prevent unnecessary gaps in coverage and unexpected costs.

Contact the Compassionate Family Law Attorneys at Smedley Law Group, P.C. in Woodbury, NJ 

If you’re facing divorce, you’ll also most likely be dealing with another matter like child custody, child support, or division of assets, so you’ll need to speak with a qualified attorney. The New Jersey family law attorneys at Smedley Law Group, P.C. represent clients throughout the state, including West Deptford, Woodbury Heights, Runnemede, and Westville. 

We understand how challenging this time can be for you, so we’ll fight hard to protect your interests and those of your loved ones throughout the legal process. Call us at (856) 251-0800 or fill out our confidential contact form to schedule a consultation. Our office is conveniently located at 750 Cooper Street, Woodbury, NJ 08096.

The articles on this blog are for informative purposes only and are no substitute for legal advice or an attorney-client relationship. If you are seeking legal advice, please contact our law firm directly.