Affordable Care Act and Divorce

 Posted on April 15, 2016 in Divorce

Before the Affordable Care Act, also known as “Obamacare”, came into effect, many couples would put off divorce because employer provided health insurance would no longer cover one of the spouses. One study found that before the Affordable Care Act was enacted, about 65,000 women would lose health insurance coverage after a divorce each year.

Now, many people are able to access health care even after a divorce when their spouse’s employer provided coverage during the marriage. In Illinois, like many other states, a state marketplace provides Affordable Care Act coverage.

Preexisting Conditions

One of the biggest changes that the Affordable Care Act made to health care even affects those who have employer provided coverage, and that is mandating insurance companies to cover preexisting conditions. In the past couples may have been worried about getting new coverage after divorce when one part of the couple developed a health condition during the marriage. Now that people can access new coverage for long standing conditions, couples can make the decisions that work for them without having to worry about illnesses going untreated due to lack of coverage.

“Qualifying Life Event”

While typically there are specific enrollment periods throughout the year where people need to sign up for insurance in order to receive subsidies, “qualifying life events” can allow you to sign up for or change coverage outside of these windows. Divorce, as well as birth, death of a spouse, and other big events count as a “qualifying life event,” and therefore you can get divorced on your schedule without having to worry about open enrollment.

Tax Consequences

If you purchase health insurance through the health insurance marketplace, you may be eligible for tax credits that offset the cost of premiums. Divorce will often have many tax consequences and Affordable Care Act tax credits are no exception. The Affordable Care Act also mandates coverage for individuals and families or they may be subject to a penalty, and this penalty should be planned for as well in the divorce if it is applicable. When you are thinking about or planning a divorce, it is important to talk with a divorce attorney who is knowledgeable about the tax consequences of divorce.

Spousal Support

Courts will sometimes award spousal support, formerly called alimony, to the lower earning half of the couple. This support is intended to help the spouses get on their feet and have their basic needs met. Before the Affordable Care Act, spouses often were awarded support in part to help cover the high costs of COBRA or other private health insurance. Now, if both spouses were covered by employer provided insurance before the divorce, the spouse without health insurance will likely have less expensive options, which means the need for less spousal support from the higher earning part of the couple.

DuPage County Divorce Attorneys

Divorce has several intended and unintended consequences to couples, and health insurance is just one of many. It is crucial that you have a skilled divorce lawyer working with you to assure the best outcomes. Contact our skilled DuPage County divorce attorneys at Davi Law Group, LLC today for assistance with your case.

Sources:

http://www.hhs.gov/healthcare/

http://home.isr.umich.edu/sampler/divorce-costs-thousands-of-women-health-insurance-coverage-every-year/

https://getcovered.illinois.gov/en

https://www.healthcare.gov/glossary/qualifying-life-event/