How the Affordable Care Act Affects Your Divorce

umbrella graphic - Mundahl Law, PLLC

Some unhappy couples stay together for the sake of the kids. Others do it because of religious beliefs or because they can't afford to live apart. And some married couples have put off divorce to avoid one spouse being removed from the other spouse's employer-sponsored health insurance.

With the advent of the Affordable Care Act (ACA), commonly known as Obamacare, the last item on that list might be changing. The ACA has provided couples with a new option that may affect their divorce in ways they didn't expect. Here are some ways the Affordable Care Act might have an impact on your divorce.

Post-Divorce Health Care Options are Expanded

Prior to the ACA, a person who had been covered under an ex-spouse's employer-sponsored health insurance could maintain that coverage for a period of time through the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA coverage tended to be expensive, though, and the person requiring continued coverage had to bear the cost. For a stay-at-home spouse who may have been unemployed for several years, the expense of COBRA coverage might have been too much to bear. Then, too, there was the issue of what to do when the allotted period of COBRA coverage expired.

After the ACA, ex-spouses have the option of seeking insurance through the health insurance exchanges in their state. Not only does this expand options for coverage, but eligibility for coverage won't expire and insurance may be less expensive.

Pre-Exisiting Conditions are No Longer a Barrier to Divorce

In the past, people with serious or chronic health conditions may have been less likely to file for divorce, or more financially devastated if their spouse filed. It was at best prohibitively expensive, and at worst impossible, to find new health insurance coverage with a pre-existing health condition.

The ACA has changed that. The law prohibits health insurers from refusing coverage, or charging more for it, because someone has a pre-existing condition. Many people don't realize that the law also prevents insurance companies for charging women more than men.

What this means is that if you were putting off a divorce because you were worried you wouldn't qualify for insurance, you can go ahead and file if you want to.

The ACA Can Save You Money in Surprising Ways

As most people are aware, subsidies to purchase health insurance are offered to those who meet income qualifications. However, the way these subsidies are structured are considered by some to penalize those who are married. A single person making $47,080 as of this writing qualifies for a subsidy, as does a household of two with an income of $63,720. That means that if you and your spouse were each earning $35,000 per year as single people living apart, you would both be eligible for a subsidy, but as a married couple in the same household with the same earnings, you would not.

We haven't heard of any couple who was willing to divorce for the sake of receiving a health insurance subsidy, but if you were already considering divorce, this is one financial factor that could nudge you toward filing.

The ACA may also, surprisingly, help spouses who are higher-earning save money on spousal maintenance. Since maintenance is based in part on the receiving spouse's level of need, if a divorced spouse winds up paying less for health insurance through the ACA, and qualifies for a subsidy to boot, the spouse paying maintenance may be able to argue for a lower payment.

To learn more about how the ACA could affect your divorce, contact us for a consultation. To read about other financial issues in divorce, we invite you to check out these articles:

Search The Site

Visit Our Podcast Website

www.fromtheashescast.com
Opens in New Window

 

For More Information

  • This field is for validation purposes and should be left unchanged.

Recent Blog Posts

Jan
6
No-fault divorce has been around in Minnesota since 1974,  and the term is familiar to most people. Yet most people don’t think about what “no-fault” divorce means until they are in the process of seeking a divorce themselves. Let’s talk a l… Read More
Dec
22
There is an old joke that goes, “How much does a good divorce lawyer cost?” The answer: “Far less than a bad one.” The joke is funny because it’s true, but it’s true on more levels than most people realize. The implication of the joke is… Read More
Dec
7
There are two ways to get a divorce in Minnesota: reach a settlement agreement sometimes called a Marital Termination Agreement at some point in the divorce process, or go to trial. Many people enter the divorce process in a state of heightened emoti… Read More

Read More Recent Blog Posts