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ACA insurance plans may affect divorce negotiations

Before the Affordable Care Act was instituted, many people in Texas had trouble getting health insurance through anyone but an employer or a spouse's employer. Preexisting conditions could stop a person from obtaining a new health insurance policy, and for many people, health insurance became an incentive to stay in an unhappy marriage.

In one case, a man who was severely ill had health insurance from his wife's employment. His wife wanted a divorce, but his lawyers were able to negotiate a settlement where his wife agreed to stay married for eight more years, or if she remarried, she agreed to pay for his health insurance. The man's lawyers noted that they had to make major financial concessions in order to obtain the arrangement.

In cases like this one, spouses who wanted to hold onto health insurance could sometimes do so during a divorce, but they often had to concede a percentage of assets or reduction in alimony. Some resorted to staying in troubled marriages for fear of losing insurance.

Spouses have been covered by temporary health insurance extension plan known as COBRA in the past. COBRA generally allows a spouse to keep insurance for a small fee, but it runs out after 36 months. COBRA is still in effect today, but the ACA has given divorcees more options for health insurance after COBRA ends, which may lower the number of individuals who stay in an unhappy marriage for health reasons.

Individuals who are pursuing a divorce may be able to work with a family law lawyer. That lawyer may be able to provide advice throughout the divorce process while still keeping a client's post-divorce lifestyle in mind. In cases where healthcare costs are a concern, the lawyer may be able to develop a deal that provides an extension of the former spouse's coverage or suggest that a client pursue a different plan on the ACA marketplace.

Source: Philly.com, "Insurance no longer may hinder divorce", Robert Calandra, March 03, 2014

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Bruce Turner

In addition to his law degree, Bruce Turner has a master's degree in tax law and is Board Certified in Commercial Real Estate Law by the Texas Board of Legal Specialization.

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