Health Policy Planning Pays Off

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January 21, 2011

Dr. Thomas Fuller maintained that “Health is not valued until sickness comes.” Despite the fact that too many Americans still are without adequate health insurance, a growing number are anticipating and preparing for their health care needs. Typically, health care plans renew at the start of the calendar year, making November and December the best time to assess one’s health insurance provisions for the upcoming year.

Divorce can cause changes in health care coverage for the non-policy holding spouse. The policy holder should inform his or her employer or health plan administrator of the change and complete a change of enrollment form. The administrator will require proof of divorce, such as a notarized divorce certificate, before any adjustments are made.

The non-policy holding spouse is eligible for COBRA coverage. Such coverage is usually more expensive; however, it can buy up to 36 months worth of health coverage through an ex-spouse’s plan. The COBRA election is an option for a limited period of time and new health care applications can take four to six weeks to process.

Health care insurance change often involves provisions for children as well as spouses. Your child(ren) can be covered by either your or your ex-spouse’s insurance provider. If your children are on both parties’ policies, the birthday rule may apply. Here the insurance of the party with the earliest birthday will be considered first in the event of a claim. This rule changes, however, if you and your ex-spouse have different types of health care policies. For example, if one party has a group policy and the other an individual or a COBRA policy, then the group policy will be applied first.

In addition, parties should consider whether it makes good sense to have dependent children on two different policies and incur duplicate costs and duplicate deductibles for similar coverage. Another point to consider is whether HMO coverage specific to a particular geographic reason makes good sense.

All of these issues point to the importance of good communication between the parties. Generally speaking, an insurance company will only notify the main policy holder of changes in benefits and rules so that party should be sure to keep the other abreast of new developments.

Thomas Jefferson once said that “Health is more important than learning.” Of course, both are essential to living a prosperous and satisfying life. Providing for your well being and that of your children is a worthwhile addition to your November calendar.