Making Insurance Changes After Divorce in Chicago
By M. Scott Gordon
When you are in the process of filing for divorce in Chicago, or the surrounding area, you probably are not thinking a lot about various insurance issues that may be impacted by the dissolution of your marriage. Although divorce can be extremely difficult emotionally and financially in the short term, it is also important to pay attention to financial matters that could have a significant impact years later. According to a recent article in Forbes Magazine, not enough divorcing spouses consider insurance changes they will need to make once the divorce is finalized. However, purchasing insurance now, or changing the beneficiary on your policy in the near future, can help to save money and prevent financial difficulties later on.
What insurance changes will you need to make once your divorce is finalized? The Forbes article discusses some of the following matters that are likely to require your attention.
Negotiating the Health Insurance Marketplace
If you were on your spouse’s health insurance plan as a dependent during your marriage, you will need to make an immediate change once the divorce is finalized. Indeed, without changing the way you are listed on your soon-to-be ex-spouse’s insurance plan can result in you losing coverage. You have a few good options.
First, the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) permits “family members who lose group health insurance because of divorce and other life changes [to] buy the coverage for up to 36 months.” It is important to note that COBRA coverage is only applicable if your spouse works for a state or local government, or for a private company that has at least 20 employees. To obtain COBRA coverage, you will need to contact the provider for your health insurance plan and let the provider know that you are getting divorced. The provider can give you instructions for making sure that you are covered. In addition to COBRA coverage, you can also select healthcare coverage from your own employer. Even if you are outside the open enrollment period, do not worry. In the event of divorce, you can select a plan outside that open enrollment period.
And if you are not working and cannot obtain COBRA coverage, you can look to the Illinois healthcare marketplace to find coverage that fits your needs and your budget.
Purchasing Insurance to Cover Spousal and Child Support Obligations
As part of some divorce agreements, spouses responsible for spousal support and/or child support will need to purchase life insurance and/or disability insurance. In the event of a disabling injury or death, these types of insurance policies can help to ensure that you can continue to meet your support obligations. Typically, divorce agreements will require you to list your ex-spouse as the beneficiary on the policy so that she or he can receive support payments if a claim is made.
These types of insurance come with different options for plan lengths, ranging from five years to 30 years. As such, if you know you will only have support obligations for a specific period of time, you can select the plan that fits your needs.
Contact a Chicago Divorce Lawyer
If you have questions about filing for divorce or handling insurance issues once your divorce is finalized, an experienced Chicago divorce attorney can help. Contact Gordon & Perlut, LLC to learn more about our services.