Health insurance can be one of the first concerns in an Illinois divorce. One spouse may be insured only through the other spouse’s employer. The children may be covered under that same plan. The coverage may continue while the divorce is pending, yet once the divorce is finalized, the dependent spouse’s coverage can quickly change.
Generally, a divorce prevents a former spouse from staying on the employee-spouse’s health insurance plan as a spouse. Once the judgment of dissolution of marriage is entered, the former spouse is no longer the employee’s legal spouse. So, if the employer’s group health plan only covers current spouses, the former spouse will no longer qualify for coverage as a spouse under that plan.
COBRA may provide that former spouse a temporary way to continue the same group health insurance post-divorce. COBRA is not a new insurance plan, but rather it is continuation coverage. It allows certain individuals who lose group health insurance because of a qualifying event to keep that coverage for a limited time if those individuals properly elect coverage and pay the required premium.
Divorce or legal separation is a COBRA qualifying event. 29 U.S.C. § 1163(3). COBRA coverage may last for up to 36 months for a former spouse or dependent child who loses coverage due to divorce.
COBRA is not automatic. If you are someone who depends on your spouse’s employment-based health insurance, address COBRA before the divorce is final. All parties should know whether COBRA is available, how much it will cost, who will pay for it, and whether other health insurance options make more sense.
Does Divorce End Health Insurance Coverage In Illinois?
Someone may have health insurance only because that person is married to an employee who receives benefits through work. While an Illinois divorce case is pending, the parties are still legally married. The judgment for dissolution of marriage changes the legal relationship.
Once the divorce is final, the dependent spouse is no longer the employee’s spouse. If the group health plan only covers current spouses, the former spouse will no longer qualify for coverage as a spouse under that plan.
The dependent spouse is not completely out of luck, though. COBRA might be an available option. The spouse who depends on the other spouse’s insurance should thus identify the plan administrator, confirm whether the plan is subject to COBRA, and find out what happens to coverage when the judgment is entered.
COBRA Coverage Explained
COBRA is the common acronym for the federal Consolidated Omnibus Budget Reconciliation Act continuation coverage rules. COBRA allows certain individuals to temporarily continue group health insurance coverage after an event that would otherwise cause that person to lose coverage.
Federal law requires COBRA continuation coverage to be “identical to the coverage provided under the plan to similarly situated beneficiaries under the plan with respect to whom a qualifying event has not occurred.” 29 U.S.C. § 1162(1).
Typically, COBRA allows the former spouse to keep the same type of coverage, the same plan, the same benefits, and the same claims process that applied pre-divorce. However, if the employer later changes the plan for similarly situated active employees and spouses, the COBRA coverage changes in the same manner.
The Supreme Court has described COBRA as allowing a qualified beneficiary of an employer’s group health plan “to obtain continued coverage under the plan when he might otherwise lose that benefit” because of certain events. Geissal v. Moore Medical Corp., 524 U.S. 74, 76 (1998).
In Geissal, the Court held that an employer could not deny COBRA continuation coverage to an otherwise eligible beneficiary only because that beneficiary was already covered under another group health plan at the time he elected COBRA coverage. 524 U.S. at 78-87.
The qualifying event in Geissal was termination of employment, not divorce. Regardless, the case is helpful in a divorce context because it shows that COBRA rights are controlled by the statute’s continuation-coverage rules. You should not assume COBRA is unavailable simply because another group health plan was already available at the time of the COBRA election.
Still, COBRA is temporary and often expensive. It may not always be the best health insurance option available.
Is Divorce A COBRA Qualifying Event?
The simple answer is yes. Divorce or legal separation is a COBRA qualifying event when it causes a covered spouse or dependent child to lose coverage under a group health plan.
Federal law defines a qualifying event to include “the divorce or legal separation of the covered employee from the employee’s spouse.” 29 U.S.C. § 1163(3).
A pending divorce is insufficient. The United States Department of Labor states that a court decree of divorce or legal separation is required. Filing for divorce does not, by itself, create COBRA rights. Until the divorce or legal separation becomes final, the spouse can still be covered as a current spouse under the plan.
After the divorce is final, the covered employee or qualified beneficiary must notify the plan administrator. The plan must allow at least 60 days after the divorce or legal separation for that notice to be given. Once the plan receives notice, the plan must send a written election notice explaining the right to elect COBRA continuation coverage.
Who Can Get COBRA After An Illinois Divorce?
The question is not just whether someone was married to the employee. The question is whether that person was covered under the employee’s group health plan at the legally relevant time.
Federal law defines a qualified beneficiary as an individual who, “on the day before the qualifying event,” was covered under the plan as the spouse of the covered employee or as the dependent child of the covered employee. 29 U.S.C. § 1167(3)(A).
Thus, a former spouse usually cannot claim COBRA rights after divorce if that spouse was not actually covered under the employee-spouse’s group health plan before the divorce. Similarly, a child’s COBRA rights depend on whether the child was covered under the plan before the event that caused the loss of coverage.
In a non-Illinois COBRA case, Lincoln General Hospital v. Blue Cross/Blue Shield of Nebraska, the Eighth Circuit explained that, “[a]s the spouse of a covered employee at the time of the divorce,” the wife in the case was a qualified beneficiary under COBRA and was thus entitled to elect COBRA continuation coverage. Lincoln General Hospital v. Blue Cross/Blue Shield of Nebraska, 963 F.2d 1136, 1139 (8th Cir. 1992).
Each qualified beneficiary may make a separate COBRA decision. Although not an Illinois case, McDowell v. Krawchison explains the point clearly: “[a] covered spouse has his or her own rights under COBRA, which are not dependent on the covered employee’s rights.” 125 F.3d 954, 961 (6th Cir. 1997).
Put simply, COBRA should be analyzed person by person. A former spouse might need COBRA, even if the employee-spouse does not. One child might need continuation coverage, whereas another child is covered elsewhere. A marital settlement agreement should identify who is covered, under what plan, for how long, and at whose cost.
How Long Does COBRA Last After Divorce?
The qualifying event that caused the loss of coverage determines the length of COBRA.
When coverage is lost because the covered employee’s employment ends or the employee’s hours are reduced, the COBRA period is typically 18 months. 29 U.S.C. § 1162(2)(A)(i).
When coverage is lost because of a divorce or legal separation, the maximum period is usually 36 months. 29 U.S.C. § 1162(2)(A)(iv).
When a qualifying event does not involve termination of employment, reduction of hours, or certain bankruptcy proceedings, coverage continues until “36 months after the date of the qualifying event.” 29 U.S.C. § 1162(2)(A)(iv).
The timing distinctions matter in settlement drafting. A divorce judgment or marital settlement agreement cannot simply assume that every COBRA period is going to be the same.
Additionally, there is a second-qualifying-event rule. For instance, if the employee first loses employment, the spouse and children may initially be offered COBRA for 18 months. If the couple then divorces during that initial COBRA period, the divorce may extend the spouse’s or dependent children’s maximum COBRA period to 36 months from the original qualifying event.
This rule is meant to protect the spouse or dependent children who experience the second qualifying event.
Still, the 36-month period is only a maximum period. COBRA can end earlier if the employer stops offering any group health plan, premiums are not paid on time, or another early-termination rule applies.
How Do You Elect COBRA After An Illinois Divorce?
COBRA coverage does not continue on its own. A qualified beneficiary has to elect COBRA after receiving the required election notice.
Once the plan administrator receives notice of the divorce or legal separation, the plan must send an election notice that explains the right to continue coverage. The election notice must explain how to elect COBRA, the deadline to elect COBRA, when COBRA coverage will begin, the maximum period of coverage, the monthly premium, when payments are due, and where payments must be sent.
Federal law provides qualified beneficiaries with an election period. The statute defines the election period as a period that “is of at least 60 days’ duration” and ends no earlier than 60 days after the later of the date coverage terminates or the date the COBRA notice is provided. 29 U.S.C. § 1165(1).
The Seventh Circuit has emphasized this election requirement. In Wilczynski v. Kemper National Insurance Companies, the court stated that “[u]nder COBRA, the qualified beneficiary must elect to receive continuation coverage within 60 days of the qualifying event or the date of notice of such event to the beneficiary, whichever is later.” 178 F.3d 933, 940 (7th Cir. 1999).
A former spouse should not wait until the last day to read the election notice. The election notice controls the procedure for electing coverage. If the notice requires a signed form, a particular mailing address, an online election, or other specific steps, the former spouse must follow those instructions.
Wilczynski illustrates why the election procedure is important. The notice in that case required the qualified beneficiary to elect COBRA in writing within the 60-day period. The court held, “a timely written election was the only way Wilczynski could properly notify CobraServ that she was electing coverage.” Id. at 940. Wilczynski was not entitled to COBRA coverage because she did not meet the requirements for election of continuation coverage. Id.
COBRA coverage can also apply back to the date coverage would otherwise have been lost if COBRA is timely elected and paid for. This means there may appear to be a gap between the divorce, the loss of coverage, the COBRA election, and the first payment. If COBRA is timely elected and the required premiums are paid, coverage can apply back to the date coverage would otherwise have been lost.
Each qualified beneficiary may also have separate election choices. Federal law provides, “If there is a choice among types of coverage under the plan, each qualified beneficiary is entitled to make a separate selection among such types of coverage.” 29 U.S.C. § 1165(2). One former spouse may elect COBRA while another qualified beneficiary does not. A child may need coverage even if the former spouse has coverage elsewhere.
For divorce planning, the best approach is to get the COBRA information before the judgment is entered. If you rely on the other spouse’s employer-sponsored plan, you should know where the election notice will be sent, what address the plan administrator has on file, how to elect coverage, and how quickly the first premium should be paid.
The Cost Of COBRA After Divorce
In my experience, COBRA can be expensive because the employer typically no longer subsidizes the former spouse’s coverage.
For example, the employee-spouse may pay only part of the health insurance premium through payroll deductions during the marriage. The employer may pay the rest. Post-divorce, the former spouse who elects COBRA may have to pay the full cost of the coverage, which includes the portion the employer used to pay.
Under federal law, the plan is allowed to require payment of a premium for COBRA continuation coverage. The premium “shall not exceed 102 percent of the applicable premium” for the coverage period. 29 U.S.C. § 1162(3). Most of the time, the extra two percent is described as an administrative charge.
In Trustees of the AFTRA Health Fund v. Biondi, under the parties’ divorce decree, the husband was required to pay COBRA health insurance premiums for his former wife for two years. 303 F.3d 765, 769-70 (7th Cir. 2002). Rather than getting COBRA coverage or notifying the plan of the divorce, the husband left his former wife listed under the existing medical plan as his spouse, even though she was not eligible for dependent-spouse coverage post-divorce. Id. at 770.
Biondi demonstrates why COBRA premium responsibility must be stated in the divorce judgment or marital settlement agreement clearly. COBRA may allow a former spouse to have the right to continue coverage. However, the divorce documents need to specify whether a spouse must pay, reimburse, or contribute to the COBRA premiums.
The statute further states that premiums “may, at the election of the payor, be made in monthly installments.” 29 U.S.C. § 1162(3). The plan must not require the first premium payment before 45 days after the qualified beneficiary makes the initial COBRA election. 29 U.S.C. § 1162(3).
The first payment can be larger than one regular monthly premium. If COBRA coverage is retroactive to the date coverage was lost, the first payment might have to cover multiple months of premiums. Imagine that a former spouse loses coverage when the divorce is finalized and waits several weeks to elect COBRA. Then, that spouse makes the first payment. The first payment may need to include the retroactive coverage period.
If you are a spouse comparing health insurance options, be sure to look at the actual COBRA premium, not just the prior payroll deduction. The prior payroll deduction can often show only what the employee paid during the marriage. The COBRA premium can reflect the full cost of the plan.
Illinois Spousal Continuation Health Care Insurance Coverage After Divorce
After an Illinois divorce, COBRA is not the only possible continuation right. Illinois also provides a separate spousal continuation law.
No group accident or health insurance policy delivered or issued for delivery in Illinois can exclude continuation rights for an employee’s spouse and dependent children who are insured under that group policy, “notwithstanding that the marriage is dissolved by judgment.” 215 ILCS 5/367.2(A).
Illinois spousal continuation coverage is different from federal COBRA. COBRA is a federal continuation coverage law. Illinois spousal continuation is a state-law continuation privilege that applies to specific Illinois group accident or health insurance policies.
The deadlines are also not the same. Under Illinois law, “[w]ithin 30 days of the entry of judgment,” the party seeking continuation coverage must give either the employer or insurer written notice of the dissolution of marriage. 215 ILCS 5/367.2(B). The employer has 15 days after receiving the notice to provide written notice to the insurance company. Id.
Then, within 30 days after receiving notice from the employer, retired employee’s spouse, former spouse, or after the initiation of a new group policy, the insurance company is required to notify the former spouse “by certified mail, return receipt requested” that the policy can be continued for the former spouse and covered dependents. 215 ILCS 5/367.2(C). The notice must include “a form for election to continue the insurance coverage,” “the amount of periodic premiums” for continuation coverage, “the method and place of payment,” and “instructions for returning the election form within 30 days after the date it is received from the insurance company.” Id.
Illinois law states that failure to elect continuation coverage in writing within the 30-day period “shall terminate the continuation of benefits and the right to continuation.” 215 ILCS 5/367.2(C).
For a former spouse under age 55 when continuation coverage begins, Illinois spousal continuation coverage terminates upon the earliest of the following: “[t]he failure to pay premiums when due, including any grace period allowed by the policy,” the date “[w]hen coverage would terminate under the terms of the existing policy if the employee and former spouse were still married to each other,” “the date on which the former spouse first becomes, after the date of election, an insured employee under any other group health plan,” “the date on which the former spouse remarries,” or “the expiration of 2 years from the date continuation coverage began.” 215 ILCS 5/367.2(D).
For a retired employee’s spouse or former spouse who has reached age 55 when continuation coverage begins, Illinois law has different rules. 215 ILCS 5/367.2(E). That continuation coverage terminates upon the earliest of multiple events, including “[t]he failure to pay premiums when due,” the date coverage would otherwise terminate under the policy, the date the retired employee’s spouse or former spouse becomes insured under another group health plan after election, the date the former spouse remarries, or “the date that person reaches the qualifying age or otherwise establishes eligibility under the Medicare Program pursuant to Title XVIII of the federal Social Security Act.” Id.
Do not assume that COBRA and Illinois spousal continuation are interchangeable. Before the divorce is final, you should ask whether federal COBRA, Illinois spousal continuation, or both are available.
Addressing Health Insurance In An Illinois Divorce Judgment
COBRA does not automatically determine who is responsible for paying for coverage in an Illinois divorce.
Health insurance should be addressed in the judgment for dissolution of marriage or marital settlement agreement. It should identify who is covered, when coverage is expected to end, whether COBRA or Illinois spousal continuation is available, who must provide required notices, who is required to complete election forms, who is to pay or reimburse premiums, and when any payment obligation ends.
This is particularly important in cases where one spouse cannot immediately obtain affordable replacement coverage. A spouse who needs assistance in paying for continuation coverage may address that issue in two ways: through temporary relief while the divorce is pending or through maintenance and settlement terms at the end of the case.
Either party may request temporary maintenance or temporary child support under 750 ILCS 5/501(a)(1) during the case. Section 501 also allows “other appropriate temporary relief” at the court’s discretion. 750 ILCS 5/501(a)(3). If the dependent spouse needs coverage before the divorce is final, temporary relief can be implemented to address insurance costs until the final judgment is entered.
Maintenance can also be relevant at the final judgment stage. Illinois maintenance law grants the court the authority to grant maintenance for either spouse “in amounts and for periods of time as the court deems just.” 750 ILCS 5/504(a). The court considers factors like “the income and property of each party,” “the needs of each party,” “the realistic present and future earning capacity of each party,” the standard of living during the marriage, the age and health of the parties, and “any valid agreement of the parties.” Id.
Children’s health insurance should not be addressed with the former spouse’s health insurance. Illinois law permits courts to address child health insurance in child support orders. If a child must be named as a beneficiary of a health insurance plan, the court can consider “the medical needs of the child,” the availability of a plan to meet those needs, and the cost of the plan to the parties. 750 ILCS 5/505.2(b)(1).
Illinois courts view children’s health insurance as part of child support. In In re Marriage of Rash, the Fifth District explained, “[t]he provision of health insurance is another integral element of the parents’ support obligation.” 406 Ill. App. 3d 381, 385 (5th Dist. 2010).
Additionally, the trial court has discretion to order either one or both parents to pay health insurance premiums for a child and to pay uncovered and extraordinary medical expenses for the child. Id. at 385-86.
Section 505.2 also lets Illinois courts address expenses beyond insurance premiums. There is no limit on the court’s authority to provide for payment of deductibles, copayments, and other health expenses in addition to expenses covered by insurance. 750 ILCS 5/505.2(b)(3).
Even if a parent already has coverage for the child, the other parent may still have a health insurance obligation. In In re Parentage of I.I., the First District affirmed an order that required the father to obtain health insurance for the child, even though the mother had health insurance for the child at no cost to her. 2016 IL App (1st) 160071, ¶¶ 68, 70. The court reasoned that the father cited “no authority that would relieve one parent from a health insurance obligation simply because the other parent already has a policy.” Id. ¶ 70. It further stated, “[t]he duty to provide health insurance is an integral part of a parent’s current and future support obligations.” Id. ¶ 70.
A divorce judgment should not simply assert that health insurance will continue. It should state whose insurance will continue, for how long, at what cost, through what plan, what happens if coverage becomes unavailable, who pays the premiums, who pays uncovered expenses, and what proof of coverage must be exchanged.
The Bottom Line About COBRA Coverage And Divorce In Illinois
If you are going through a divorce in Illinois, health insurance should not be an afterthought. A divorce can end a spouse’s eligibility for coverage under the other spouse’s employer-sponsored health insurance plan. Yet, COBRA or Illinois spousal continuation coverage may serve as a temporary way to continue insurance.
Those rights are dependent on deadlines, proper notice, timely election, and payment of premiums. The marital settlement agreement or judgment for dissolution of marriage must clearly address who is covered, who must give notice, who must elect coverage, who pays the premiums, and what happens if continuation coverage is unavailable or ends.
If you are going through an Illinois divorce and are worried about losing health insurance coverage, COBRA, Illinois spousal continuation coverage, or how health insurance will be addressed in your divorce judgment, contact my Illinois family law firm to speak with an experienced Illinois divorce attorney.
Russell Knight has practiced family law for more than 19 years. Russell Knight has handled thousands of divorces and family law cases involving maintenance, child support, health insurance, parenting issues, marital settlement agreements, attorney’s fees, and complex financial issues. As a divorce lawyer licensed in both Illinois and Florida, Russell regularly helps clients evaluate how health insurance, financial dependence, support obligations, and post-divorce coverage issues affect divorce litigation.
CASES AND STATUTES REFERENCED IN THE COBRA COVERAGE AND DIVORCE IN ILLINOIS ARTICLE
29 U.S.C. § 1162 — Continuation Coverage
29 U.S.C. § 1163 — Qualifying Event
29 U.S.C. § 1166 — Notice Requirements
29 U.S.C. § 1167 — Definitions And Special Rules
215 ILCS 5/367.2 — Illinois Spousal Continuation Coverage
750 ILCS 5/501 — Temporary Relief
750 ILCS 5/505.2 — Health Insurance In Child Support Orders
Geissal v. Moore Medical Corp., 524 U.S. 74 (1998)
Lincoln General Hospital v. Blue Cross/Blue Shield of Nebraska, 963 F.2d 1136 (8th Cir. 1992)
McDowell v. Krawchison, 125 F.3d 954 (6th Cir. 1997)
Wilczynski v. Kemper National Insurance Companies, 178 F.3d 933 (7th Cir. 1999)
Trustees of the AFTRA Health Fund v. Biondi, 303 F.3d 765 (7th Cir. 2002)
In re Marriage of Rash, 406 Ill. App. 3d 381 (5th Dist. 2010)
In re Parentage of I.I., 2016 IL App (1st) 160071
FREQUENTLY ASKED QUESTIONS ABOUT COBRA COVERAGE AND DIVORCE IN ILLINOIS
Can I Stay On My Spouse’s Health Insurance After Divorce In Illinois? In most cases, no. You are no longer the employee-spouse’s legal spouse once the judgment for dissolution of marriage is entered. If the employer’s health insurance plan covers current spouses only, you will no longer qualify for coverage as a spouse under that plan. However, COBRA or Illinois spousal continuation coverage may provide a temporary continuation option.
Is Divorce A COBRA Qualifying Event? Yes, divorce or legal separation is a COBRA qualifying event when it causes a spouse or dependent child to lose coverage under a group health plan. COBRA rights will usually arise after the divorce or legal separation becomes final and causes a loss of coverage.
How Long Does COBRA Last After Divorce? COBRA coverage can last for up to 36 months for a former spouse or dependent child who loses coverage due to divorce or legal separation. That is the maximum period. COBRA may end earlier if the employer stops offering a group health plan, if premiums are not paid on time, or if another early-termination rule applies.
Who Pays For COBRA After Divorce In Illinois? COBRA provides a former spouse with the right to continue coverage in certain circumstances. However, COBRA does not automatically determine who pays for that coverage in an Illinois divorce. Either the judgment for dissolution of marriage or the marital settlement agreement should state whether a spouse has to pay, reimburse, or contribute to COBRA premiums.
What Is Illinois Spousal Continuation Coverage? Illinois spousal continuation coverage is a separate state-law continuation right; it is not the same thing as federal COBRA. Illinois spousal continuation applies to certain Illinois group accident or health insurance policies after a marriage is dissolved by judgment.
