Utah Divorce Code 30-3-5.4: Designation of Primary and Secondary Health, Dental, or Hospital Insurance Coverage.
(1) For purposes of this section, “health, hospital, or dental insurance plan” has the same meaning as “health care insurance” as defined in Section 31A-1-301.
(2) (a) A decree of divorce rendered in accordance with Section 30-3-5, an order for medical expenses rendered in accordance with Section 78B-12-212, and an administrative order under Section 62A-11-326 shall, in accordance with Subsection (2)(b)(ii), designate which parent’s health, hospital, or dental insurance plan is primary coverage and which parent’s health, hospital, or dental insurance plan is secondary coverage for a dependent child.
(b) The provisions of the court order required by Subsection (2)(a) shall:
(i) take effect if at any time a dependent child is covered by both parents’ health, hospital, or dental insurance plans; and
(ii) include the following language:
“If, at any point in time, a dependent child is covered by the health, hospital, or dental insurance plans of both parents, the health, hospital, or dental insurance plan of (Parent’s Name) shall be primary coverage for the dependent child and the health, hospital, or dental insurance plan of (Other Parent’s Name) shall be secondary coverage for the dependent child. If a parent remarries and his or her dependent child is not covered by that parent’s health, hospital, or dental insurance plan but is covered by a step-parent’s plan, the health, hospital, or dental insurance plan of the step-parent shall be treated as if it is the plan of the remarried parent and shall retain the same designation as the primary or secondary plan of the dependent child.”
(c) A decree of divorce or related court order may not modify the language required by Subsection (2)(b)(ii).
(d) Notwithstanding Subsection (2)(c), a court may allocate the payment of medical expenses including co-payments, deductibles, and co-insurance not covered by health insurance between the parents in accordance with Subsections 30-3-5(1)(a) and 78B-12-212(6).
(3) In designating primary coverage pursuant to Subsection (2), a court may take into account:
(a) the birth dates of the parents;
(b) a requirement in a court order, if any, for one of the parents to maintain health insurance coverage for a dependent child;
(c) the parent with physical custody of the dependent child; or
(d) any other factor the court considers relevant.
Insurance Coverage for Former Spouses
Women, in particular, often lose health insurance coverage as a result of divorce. According to a 2012 study, about 115,000 women every year lose their private health insurance after divorce. 65,000 remain uninsured for months or years. One quarter of those who were previously dependent on their husbands’ plans were still uninsured six months after their divorce. Even women who have health insurance through their own employers may find themselves unable to afford coverage after divorce. The study found that 11% of these women became uninsured. The study focused on women ages 26 to 64 during the years 1996 through 2007 and found that moderate-income women and women age 50-64 were most likely to lose their health insurance. The provision of health insurance after divorce is governed by state and federal law as well as by the parties’ settlement agreement. Many employers provide insurance coverage for current spouses. However, coverage for former spouses is available only in limited circumstances, and often at a high cost.
Under COBRA (the Consolidated Omnibus Budget Reconciliation Act), if one former spouse works for a company that employs 20 or more people, the other former spouse is eligible under federal law to apply for continued coverage. Insurance coverage under COBRA costs the entire amount of the premium, plus a surcharge, for a total of 102% of the group rate. This is more than many people can afford. A former spouse must apply for COBRA coverage within 60 days after becoming divorced. Coverage lasts for up to 36 months. If a company has fewer than 20 employees, coverage is available under the North Carolina “mini-COBRA” law. The state mini-COBRA law requires insurance policies to provide continued coverage for 18 months (rather than 36 as with the federal plan). Also, the state law only covers hospital, surgical, and major medical insurance but generally not dental or vision plans. Once coverage ends, under either the COBRA or mini-COBRA statues, a former spouse will need to find new health insurance. If a former spouse becomes ill or injured or acquires a chronic health condition (such as diabetes) while covered by COBRA, he or she may have a difficult time finding an insurer who will provide coverage. However, under the Patient Protection and Affordable Care Act (PPACA), commonly called “Obamacare” or the Affordable Care Act (ACA), as of January 1, 2014 insurers are prohibited from discriminating against applicants or charging them higher rates based on pre-existing medical conditions. Under the ACA, more people will become eligible for Medicaid and for government subsidies to help pay for health insurance. Individuals who were formerly covered by a former spouse’s insurance plan may also seek to become covered by their own employer’s plan. Under federal law, a person who has lost access to other health insurance may enroll in an employer’s plan outside the annual open enrollment period. Self-employed people may be able to obtain group rates for insurance, even if their businesses are very small.
Under the Civil Service Retirement Spouse Equity Act of 1984, certain former spouses of current and former Federal employees may qualify to enroll in a health benefits plan under the Federal Employees Health Benefits (FEHB) Program.
A former spouse is eligible if he or she:
• Was divorced from a Federal employee, or a former Federal employee receiving an annuity, during the period that the Federal employee was employed by the Federal government or receiving the annuity;
• Was covered as a family member under the FEHD at least one day during the 18 months before the marriage ended;
• Is entitled to a portion of the Federal employee’s annuity or to a former spouse survivor annuity; and
• Has not remarried before age 55.
Former spouses must pay the full premium for FEHB coverage (i.e., the former spouse must pay both the employee and government shares of the premium cost).
Separation and Health Insurance
Because health insurance can be such a major expense, especially where one spouse has a serious health condition, some couples opt for legal separation rather than divorce. Some health insurers provide spousal coverage for separated spouses, but some do not. Thus, couples contemplating separation should carefully investigate whether continued coverage is even an option.
Health insurance companies require notification of a divorce (or of a separation that terminates coverage eligibility) within a specified time, and failure to provide this notification may be considered insurance fraud.
Insurance Coverage For Children
Determining who will pay for insurance coverage for children is often part of the settlement agreement process. The parties may agree that the children will be covered under a parent’s employee’s group plan, or that one party will obtain private insurance. The parents may agree that one of them will bear 100 percent of the cost, or they may share costs in proportion to their incomes. If both parents are covered by group insurance plans, then one plan can be designated “primary” and the other “secondary.” The secondary plan would cover most or all costs not covered by the primary plan. Insurance companies can help parents decide which plan should be primary and which secondary, and explain the process for handling claims covered by both plans.
Child’s Healthcare after Divorce
Although each state has its own set of rules unique to the custody and care of children, all states require divorced parents to provide adequate financial support for their children. And although the calculation of what amounts to adequate child support varies by state, both state and federal law require parents to provide healthcare coverage for their dependent children. There are several ways family law courts have historically gone about deciding which parent is responsible for providing healthcare insurance for children. In addition, courts must also decide how to divide out-of-pocket costs. These costs include co-pays and deductibles and healthcare expenses that are not covered by insurance. Certain state and federal laws are in place to make sure children have healthcare coverage. Also, the Patient Protection and Affordable Care Act (ACA), sometimes referred to as Obamacare, has mandates that affect the way parents are required to provide healthcare coverage for their children.
General Requirements For Providing Health Insurance For Children Of Divorce
Family law courts in all states will order parents to pay for the medical and dental expenses of their children. The court order may be based on an agreement the parents put together themselves. If the parents cannot agree on a plan, the court will review their individual financial statements and make orders according to their individual financial capability. The most common court orders involving health insurance coverage include:
• Requiring non-custodial parents who are employed to maintain their children on their employer-provided health insurance plan.
• If the parent is not provided insurance through his or her employer, then an affordable private plan must be purchased that covers the children.
• If neither parent can afford health insurance, the child may qualify for healthcare under a state Medicaid or CHIP program.
• Depending on the financial situation of each parent, one parent may be required to pay all medical expenses, such as co-pays, deductibles and non-covered expenses, in addition to health insurance premiums. The court may also order the expenses to be divided between the parties on a percentage basis based on their income.
• If both parents have health insurance through employment, one plan will be designated as primary and the other secondary. The secondary insurance will pay the amount still outstanding after the primary insurance pays.
• If the parent who has been ordered to provide health insurance fails to do so, that parent will be responsible for paying all healthcare costs that would have been covered under the insurance plan.
Effects Of The ACA On Health Insurance Requirements For Divorced Parents
The ACA that went into effect Jan. 1, 2014, has provisions that affect how divorced parents provide health insurance for their children. The main provisions that may affect parents and courts in the provision of healthcare coverage for their children include:
• The parent who claims the children on his or her income tax return as dependents is the one required to provide proof of health insurance with the return. It is generally the custodial parent who claims the children as dependents and the non-custodial parent who is required to pay for the health insurance. There may be communication problems between the two and if the non-custodial parent has not complied with the order and has failed to provide the insurance, the custodial parent will be the one to pay the penalty.
• The employer may not have the most affordable healthcare plan, in which case the parent may have to use the exchanges to purchase a more affordable plan. The custodial parent may be able to buy a more affordable plan than the parent who is ordered to purchase the insurance. There are laws in place to require employer health plans to comply with any child support court orders regarding health insurance and medical costs. For example, under the Qualified Medical Child Support Order (QMCSO), the employer of a parent who has a court order requiring that parent to provide health insurance must follow certain rules. For example, the employer must communicate any change in benefits to the custodial parent and be certain that parent knows how to file claims. If insurance is purchased on the exchange, QMCSOs will not apply.
• The ACA requires the insurance purchased to be “affordable.” Most states also have a definition for “affordable” in relation to the purchase of health insurance for children of divorce. There may be a conflict in the two definitions. There seems to be a conflict in whether the term applies to the custodial parent or the parent who is ordered to purchase the insurance.
• All insurance companies must now cover pre-existing conditions. In the past, if a child had a pre-existing condition that was covered under an effective health insurance plan, courts would order that plan to be maintained. This avoided the risk of the child’s not being accepted for coverage by a different plan. This is no longer a concern because coverage cannot be denied on the basis of a pre-existing condition. State laws, the federal mandate and the best interest of their children require parents to provide health insurance for their offspring. To do this in the most efficient and economical way, parents need to get as much information as they can about the law and the best plans available. If parents can communicate about this issue, they can minimize their risk for incurring tax penalties and maximize the well-being of their children.
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