Health Insurance After Divorce in California: COBRA Options

When a California divorce becomes final, a spouse covered as a dependent on the other spouse's employer health plan may lose that coverage. The options to look at include continuation coverage through federal COBRA or California's Cal-COBRA, individual coverage through Covered California, and Medi-Cal.

Most people facing this question have had health insurance quietly handled for years through a husband's or wife's job, and now, in the middle of a divorce, they are realizing that the card in their wallet is tied to a marriage that is ending. Some are the covered spouse, worried about a gap in care for a prescription, a pregnancy, or an ongoing condition. Others are the employee who holds the plan, wondering what they are allowed to change and what they owe the other person. Both are trying to sort out the same thing: what the rules actually say, and when each choice has to be made.

This article walks through what divorce does to a group health plan, how each coverage option works, how health insurance shows up inside a California divorce case, and where cases from Carlsbad are heard.

What Divorce Does to an Employer-Sponsored Health Plan in California

Divorce or legal separation of the covered employee from the employee's spouse is a "qualifying event" under federal COBRA, meaning an event that can end a spouse's coverage under the group plan and gives that spouse the right to elect continuation coverage. It is the doorway to the options described below.

Which continuation option applies depends on the size of the employer. Under 29 U.S.C. § 1161(b), federal COBRA does not apply to a group health plan if all employers maintaining it normally employed fewer than 20 employees. California Insurance Code section 10128.50(b) states the Legislature's intent that continued access to coverage be provided, under Cal-COBRA, to employees and their dependents of employers with 2 to 19 eligible employees who are not currently offered continuation coverage under federal COBRA.

The practical point is timing. Federal COBRA gives a qualified beneficiary an election period of at least 60 days, and the windows that apply are gathered in one place later in this article.

Federal COBRA: How the 36-Month Extension Works

Federal COBRA, codified at 29 U.S.C. § 1161 and the sections that follow, allows qualified beneficiaries to continue their existing group coverage for a set period after an event that would otherwise end it. It applies when the employer has 20 or more employees.

A spouse who loses coverage because of divorce or legal separation is a "qualified beneficiary," the term COBRA uses for someone entitled to continue coverage. The divorce or separation is the triggering event. The coverage must extend for at least 36 months after the qualifying event.

The process runs through the plan administrator, the person or office that manages the plan for the employer. Under 29 U.S.C. § 1166(a)(3), the covered employee or qualified beneficiary is responsible for notifying the administrator of a divorce or legal separation within 60 days after the date of the qualifying event. The administrator's notification to qualified beneficiaries must be made within 14 days of the date the administrator is notified (§ 1166(c)). The election period runs at least 60 days and ends not earlier than 60 days after the later of the date coverage terminates or the date of the notice (§ 1165(a)(1)).

COBRA coverage must be identical to the coverage the plan provides to similarly situated beneficiaries who have not had a qualifying event (29 U.S.C. § 1162(1)). What changes is who pays: the plan may require a premium of up to 102 percent of the applicable premium for the period (§ 1162(3)). The "applicable premium" is the cost to the plan of the coverage for similarly situated beneficiaries who have not had a qualifying event, "without regard to whether such cost is paid by the employer or employee" (§ 1164(1)), so the premium is not limited to the share the employee used to pay.

Cal-COBRA: California's Continuation Coverage for Smaller Employers

California Insurance Code section 10128.50 names the law the "California Continuation Benefits Replacement Act," or Cal-COBRA. The statute states the Legislature's intent plainly: to give continued access to health coverage to employees, and their dependents, of employers with 2 to 19 eligible employees who are not offered continuation coverage under federal COBRA.

Section 10128.54 requires an insurer's evidence of coverage to state that a qualified beneficiary who wants to continue coverage must request it in writing within the 60-day period that follows the later of the date coverage ends because of a qualifying event or the date the insured was sent notice of the ability to continue coverage. Other sections of that article answer the remaining questions. Section 10128.51(d)(3) lists "the divorce or legal separation of the covered employee from the covered employee's spouse" as a qualifying event, and section 10128.51(c)(1) defines a qualified beneficiary as an individual covered under a group benefit plan offered by a disability insurer, so the article speaks to insured group plans. Federal COBRA's definition of a "group health plan" is worded more broadly: an employee welfare benefit plan providing medical care "directly or through insurance, reimbursement, or otherwise" (29 U.S.C. § 1167(1)). Section 10128.57(a) provides that continuation coverage ends at the first of several listed events, one of which is the date 36 months after the date the qualified beneficiary's benefits under the contract would otherwise have terminated because of a qualifying event. Section 10128.56 provides that a qualified beneficiary electing continuation coverage pays "not more than 110 percent" of the applicable rate charged for a covered employee or, for dependent coverage, of the applicable rate charged to a similarly situated individual under the group benefit plan being continued. Under section 10128.52(c), the article's requirements do not apply to individuals who are covered, become covered, or are eligible for federal COBRA coverage. The insurer or employer administering the plan can confirm the details for a particular plan.

Covered California

Covered California is the state's health insurance marketplace, where individual health plans are offered. Information about plans, eligibility and enrollment is at coveredca.com.

Covered California lists getting divorced or legally separated among the major life changes, also called qualifying life events, that let a person enroll in a plan outside the regular open enrollment period. This is known as a special enrollment period. Its guidance for marriage, divorce, domestic partnership, or a death in the household is to act within 60 days of the event, and it says coverage typically starts the first of the month after a plan is chosen. Details are on its major life changes page.

Financial help through Covered California depends on household size and income. Covered California counts a household as you, your spouse, and anyone you claim as a tax dependent, so a divorce can change the household size and income it looks at. One application covers both Covered California and Medi-Cal. Its financial help page describes the types of help.

Medi-Cal

Medi-Cal is California's Medicaid program. According to Covered California, it gives no-cost or low-cost health insurance to Californians with limited incomes, and eligibility can depend on income, household size, age, pregnancy, disability and other factors. Because household size and income matter, a change in household can change the result. Medi-Cal can be applied for any time of year, through the same application used for Covered California or through a county Medi-Cal office. It is run by the California Department of Health Care Services, not by Covered California.

How Health Insurance Fits Into a California Divorce Case

Inside the case, the automatic temporary restraining orders in the summons also reach health coverage. Under Family Code section 2040, the summons contains an order restraining both parties from "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 parties and their child or children for whom support may be ordered." Under section 233(a), the order is in effect upon the filing of the petition and issuance of the summons and upon personal service on the respondent or waiver and acceptance of service, until the final judgment is entered, the petition is dismissed, or the court orders otherwise. Under section 233(c), a willful and knowing violation of the orders in the summons other than the order on removing a child from the state is punishable as provided in Penal Code section 273.6.

California law also gives the parties a way to tell the insurer. Under Family Code section 2050, upon filing or at any time during the case, a party may send, or the court may order sent, a notice to a health, life, or disability insurance carrier or plan. The notice reads in part:

"YOU ARE HEREBY INSTRUCTED TO MAINTAIN THE NAMED BENEFICIARIES OR COVERED DEPENDENTS UNDER THE POLICY, UNLESS THE TERMS OF THE POLICY OR OTHER PROVISIONS OF LAW REQUIRE OTHERWISE, OR UNTIL RECEIPT OF A COURT ORDER, JUDGMENT, OR STIPULATION BETWEEN THE PARTIES PROVIDING OTHER INSTRUCTIONS."

To make that possible, Family Code section 2053 requires the insured spouse to give the other party the name, title, and address of the insurer or its agent for service of process. Once a court orders a party to keep coverage in place for a spouse or children, Family Code section 2051 allows a copy of that order to be sent to the insurer with a notice telling it to treat those people as irrevocable beneficiaries or covered dependents.

Spousal support is a separate question. In setting it, Family Code section 4320 directs the court to consider circumstances that include "the needs of each party based on the standard of living established during the marriage" and the supporting party's ability to pay.

Health insurance for children is addressed in child support orders. Under Family Code section 3751(a)(2), when an amount is set for current support, the court shall require that health insurance coverage for a supported child be maintained by either or both parents if that insurance is available at no cost or at a reasonable cost to the parent.

Finally, an order or judgment in the case can require a party to maintain existing health insurance coverage for a spouse or children, which is the situation Family Code section 2051 addresses. The contested divorce page covers contested cases, and questions about who keeps which assets are a separate subject, covered in the article on property division in Carlsbad.

Timing: Windows That Matter After a California Divorce

Three windows are described in this article, and they run on their own clocks:

• Federal COBRA: an election period of at least 60 days, ending not earlier than 60 days after the later of the date coverage terminates or the date of the election notice.
• Cal-COBRA: a 60-day period to request continuation in writing under section 10128.54; the insurer or employer administering the plan can confirm the exact dates for a particular plan.
• Covered California special enrollment: Covered California's guidance for a divorce or legal separation is to act within 60 days of the event.

Outside open enrollment, Covered California enrollment depends on a special enrollment period like the one above. Medi-Cal, by contrast, can be applied for at any time of year.

California also has a waiting period before a divorce is final. Under Family Code section 2339, no judgment ending a marriage is final "until six months have expired from the date of service of a copy of summons and petition or the date of appearance of the respondent, whichever occurs first." The clock does not start on the filing date, and the court may extend the period for good cause. The overview of divorce in Carlsbad explains the waiting period alongside the rest of the process.

Where Cases from Carlsbad Are Filed and Heard

Family law cases from Carlsbad are generally heard at the Superior Court of California, County of San Diego, North County Regional Center, 325 South Melrose Drive, Vista, CA 92081. The California Courts self-help center has general information on how family law cases move forward.

The same rules apply whether the family lives in Carlsbad Village, La Costa, or Rancho Carrillo. The firm serves people in Carlsbad and in the nearby North County communities of Oceanside, Vista, San Marcos, Encinitas, Solana Beach, Del Mar, and Rancho Santa Fe. The firm practices California family law only. A broader look at how these issues connect is in the overview of family law in Carlsbad.

If You'd Like to Talk Through Your Coverage and Your Case

Health insurance in a divorce sits where two systems meet: the plan's rules and deadlines on one side, and the court's orders on support, children, and the judgment on the other. A consultation is a place to raise those questions.

To talk with the firm about health insurance and divorce, call Carlsbad Family Law Advocates at (760) 840-5102 for a confidential consultation.