What happens to my health insurance when the divorce is final?

While the case is open: the restraining order in the summons

Family Code section 2040(a) requires the summons in every divorce to contain a temporary restraining order, and paragraph (3) of that subdivision covers insurance. It restrains both spouses from, among other things, cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of insurance or other coverage, including life, health, automobile, and disability, held for the benefit of the spouses and any child for whom support may be ordered.

In plain terms, a spouse who carries the other on a health plan is restrained from canceling that coverage or changing its beneficiaries while the order is in place. The Judicial Council's self-help page on joint petitions describes the same protection for couples who file together: the basic rules start right away and stop either spouse from, among other things, changing insurance.

The restraining order protects coverage during the case. Section 2040 does not say what happens to that coverage after the judgment. For coverage through an employer's group plan, the continuation coverage laws described below address that later point.

Notices the Family Code lets a spouse send to the insurer

Family Code sections 2050 to 2053 provide a way to put the insurer on notice. Under section 2050, when the petition is filed or at any time during the case, a spouse may send, or the court may order sent, a notice to a health, life or disability insurance carrier or plan. The statute sets out the wording. The notice tells the carrier that a case is pending, that ownership of or benefits under the policy are or may be at issue, and that it is instructed to maintain the named beneficiaries or covered dependents under the policy unless the policy terms or other law require otherwise, or until it receives a court order, judgment or stipulation with other instructions. It also instructs the carrier to notify the beneficiaries, covered dependents or other specified people if the coverage is canceled, lapses or changes.

Section 2052 provides that notice under these sections may be sent by first-class mail, postage prepaid, to the last known address of the covered dependents, named beneficiaries or other specified persons who have asked to receive it. Section 2053 makes the spouse who holds the policy responsible for giving the other spouse the name, title and address of the insurer or the insurer's agent for service of process, so that the other spouse knows where a notice goes.

When the judgment orders coverage kept in place

Section 2051 applies when an order or judgment in the case requires a spouse to maintain existing health, life or disability insurance coverage for a spouse or children. Once the insurer's name, title and address, or the name of the plan's trustee, administrator or agent for service of process, is known, a spouse may send, or the court may order sent, a copy of the order or judgment endorsed by the court with a notice whose wording the statute supplies.

That notice tells the insurer that its insured has been ordered to keep the coverage in force for the named beneficiaries or covered dependents and that it must administer the coverage accordingly, until the date stated in the order or judgment, if there is one, or until it receives a court order, judgment or stipulation with other instructions. Like the notice in section 2050, it instructs the insurer to tell the named people if the coverage is canceled, lapses or changes.

Section 2051 applies only once such an order or judgment exists. It does not say when a court makes one, and the sources read for this post do not say whether a particular plan allows a former spouse to stay covered.

Federal COBRA: divorce is a qualifying event

For an employer group health plan covered by the federal continuation coverage rules, the Employee Retirement Income Security Act sets out what happens at divorce. 29 U.S.C. section 1163 defines a qualifying event as an event that, but for continuation coverage, would result in the loss of coverage of a qualified beneficiary, and paragraph (3) lists the divorce or legal separation of the covered employee from the employee's spouse. Section 1167(3)(A) defines a qualified beneficiary to include anyone who, on the day before the qualifying event, is a beneficiary under the plan as the spouse of the covered employee.

Section 1161(a) requires the plan to let each qualified beneficiary who would lose coverage because of a qualifying event elect continuation coverage under the plan. Section 1162 describes that coverage:

• It must be identical to the coverage the plan provides to similarly situated beneficiaries who have not had a qualifying event (section 1162(1)).
• For a qualifying event such as divorce, it must last at least until 36 months after the date of the qualifying event, unless an earlier ending event applies (section 1162(2)(A)(iv)).
• It can end earlier if the employer stops providing any group health plan to any employee, if a premium is not paid on time, or if the beneficiary later becomes covered under another group health plan or, in some cases, becomes entitled to Medicare (section 1162(2)(B) to (D)).
• The plan may require a premium, which the statute limits to 102 percent of the applicable premium for the period, payable in monthly installments if the payor chooses (section 1162(3)).
• It may not be conditioned on evidence of insurability (section 1162(4)).

The 60-day notice and the election period

The federal rules split the job of giving notice. Under section 1166(a)(1), the plan gives written notice of these rights to the covered employee and the employee's spouse when coverage begins. For a divorce, section 1166(a)(3) places the next step on the family: each covered employee or qualified beneficiary is responsible for notifying the plan administrator of a divorce or legal separation within 60 days after the date of the qualifying event. The employer's own duty to notify the administrator, in section 1166(a)(2), covers other qualifying events, such as the employee's death or loss of employment, and not divorce.

When the covered employee notifies the administrator of the divorce, section 1166(a)(4)(B) and (c) require the administrator to notify the qualified beneficiary of the right to continuation coverage within 14 days, or a longer period for a multiemployer plan if the plan's terms allow. Section 1165(a)(1) then gives the qualified beneficiary an election period that lasts at least 60 days and ends no earlier than 60 days after the later of the date coverage ends or the date of that notice.

The statute does not say whether, for a divorce, the date of the qualifying event is the date the judgment is entered or the date the marriage ends. The self-help page on steps after the divorce is final lists telling your employer so that it can update your health insurance among the steps to take once the divorce is final.

Small employers: California Cal-COBRA

Federal COBRA does not reach every employer. Section 1161(b) says the requirement does not apply to a group health plan for any calendar year if all employers maintaining it normally employed fewer than 20 employees on a typical business day during the preceding calendar year.

California fills part of that gap. Health and Safety Code section 1366.20 names its article the California Continuation Benefits Replacement Act, or Cal-COBRA, and states the Legislature's intent that continued access to health coverage be provided to employees, and their dependents, of employers with 2 to 19 eligible employees who are not offered continuation coverage under federal COBRA. Section 1366.21(e) defines the employer it covers as one that meets the small employer definition, had 2 to 19 eligible employees on at least half its working days in the preceding calendar year, has contracted for coverage through a group benefit plan offered by a health care service plan, and is not subject to federal COBRA.

Section 1366.21(d)(3) lists the divorce or legal separation of the covered employee from the covered employee's spouse as a qualifying event, and section 1366.21(c)(1) defines a qualified beneficiary as an individual who, on the day before the qualifying event, is enrolled in a group benefit plan offered by a health care service plan and has a qualifying event. Continuation coverage, under section 1366.21(a), means extended coverage under the group benefit plan in which the employee or dependent is enrolled. The notice and election rules for Cal-COBRA are in other sections of the same article, which this post does not cover.

What the statutes do not answer, and where this fits

None of these statutes says what a particular plan provides, how much its coverage costs, or whether a former spouse should elect continuation coverage or choose something else. A plan that is neither subject to federal COBRA nor covered by Cal-COBRA is not addressed by either law. Coverage for children is outside this post, and a divorce with minor children is outside the flat fee.

When spouses settle everything by agreement, Law Offices of Rozsa Gyene prepares and reviews the whole set of divorce documents at a single flat fee, and the representation is limited in scope as rule 5.425 of the California Rules of Court provides. It extends to one spouse alone. That spouse handles the filing, carrying written instructions for it that the attorney has gone over. No filing, no service of papers, no court appearance, no notary and no deed, whether prepared or recorded, comes from the office. Rozsa Gyene, State Bar of California No. 208356, 3500 W. Olive Ave., Suite 300, Burbank, CA 91505.