When it comes to major life events like marriage, divorce or death, people often have a lot of questions about how things will be impacted and whether they can prepare for it ahead of time. In cases of divorce, spouses often have a large chunk of time in order to deal with things like separating their assets, but what about the things that are not so easy to separate like health insurance? What affect can a divorce have on something like this?
Well, there are a couple things that our Texas readers should keep in mind when it comes to health insurance and their marriage. The first has to do with the Affordable Care Act. With the March 31 deadline for enrollment quickly approaching, some soon-to-be divorcees might be wondering how their separation will affect their coverage and whether they could be penalized for not having coverage. Although the program does afford protections to those who have undergone a life-changing event, such as divorce, this could get muddled because everyone might not be on the same page. For some, this might mean lengthy conversations with their providers and potential discussions with legal representation as well before it gets sorted out.
Another thing for people to keep in mind is how penalties could be calculated if you fail to comply to the Affordable Care Act. Because the penalty is based on 1 percent of your annual income, some divorcees might be wondering what happens if they file jointly versus filing separately. As with premium tax credits, it’s possible that the IRS will look at a person’s eligibility based on their own individual income, even if a divorce couple files jointly. That way, if they fail to comply with the health care act, they will not have to pay an enormous fine later on.
Because this is such a new process, chances of mistakes are quite high. Thankfully, for those currently going through divorce, they have access to legal counsel that might be able to help them avoid such mistakes from becoming major problems.
Sources: Fox News Business, “What Deadline? Most Americans Unaware of ObamaCare Deadline,” Kate Rogers, Jan. 27, 2014
Ideastream.org, “How A Divorce Can Boost Health Insurance Subsidies,” Jan. 28, 2014