Rules regarding health insurance

Colorado state law provides a few helpful rules on health insurance after a divorce. The law has a prohibition on an insured spouse who is going through a divorce from changing or canceling a family insurance policy without advance notice and consent of the other party.

If you carry the insurance for your family, be aware that you can’t drop your former spouse without his or her consent. You should also be aware that changes you make to your insurance plan could affect your coverage or any coverage you have for your children.

Absent a separate agreement, health insurance that you have through your ex-spouse will generally be cancelled at the end of month following a divorce. If your spouse provided the insurance, it may be possible to get temporary coverage through your former spouse’s employer using COBRA. If you do need to use COBRA coverage, you will likely be responsible for the payments, but your insurance plan will remain intact.

If you have questions about what may or may not happen to your health insurance coverage, contact your attorney.

How will divorce affect your health insurance?

Many married couples share health insurance policies through a primary spouse’s employer. After a divorce, that coverage will likely terminate for the secondary spouse and possibly for the children. If you’re worried about what will happen to your health insurance, here are a few ways to ensure you can maintain coverage:

1.     Review your health care plan with your attorney: Learn the ins and outs of your coverage in case you need to find a new plan. You may also want to talk to your health insurance agent to discuss the implications of divorce on the existing plan.

2.     Consult your attorney about whether it makes sense to obtain a Legal Separation, rather than a Divorce, if maintaining your current health insurance policy is a priority.  Some families continue to exist on a plan even after a Legal Separation, if it works best for all parties, and if the insurance company will allow it.

3.     Discuss alternative plans with your attorney. If children are involved, be sure that you understand who will be responsible for insuring the kids, who will pay for co-pays, medications, etc. Be as specific as possible so that in case of an emergency, you won’t have to fight over insurance details.

4.     Be prepared to find new coverage. Even if your divorce is not finalized during an open enrollment period, the new health care law (the Affordable Care Act) provides for a special enrollment period through the health care exchange when there is a qualifying event, like a divorce. However, there is a limited time to secure coverage in this way, and a change must be made within 30 days before the date of divorce or 60 days after the divorce.

Reporting Maintenance On Your Taxes: Avoid an IRS Headache

Tax season may have come and gone for this year, but don’t put your taxes too far down on your list of priorities just yet. The IRS recently revealed that it is going to start looking more closely at tax returns for divorced couples where maintenance, or alimony, is involved.

The news comes on the heels of a new study that revealed a gross discrepancy between what ex-spouses should be reporting on their tax returns and what they’re actually claiming.

Under the tax code, a spouse who is paying maintenance can deduct those payments each year, while the spouse who is receiving payments must claim that money as income. While payments for child support aren’t considered income and can’t be deducted, alimony payments must be.

A recent report by an IRS watchdog revealed that nearly half of the tax returns from ex-spouses contained discrepancies regarding alimony paid and income reported. The report estimated that over a five-year period, those errors could amount to $1.7 billion dollars. In light of that news, the IRS plans to change its audit filters to catch some of these suspicious returns.

To avoid a potential audit, it’s important to ensure you know what’s required. Here’s a helpful blog regarding how to file a return after a divorce. And it may be helpful to seek out an accountant or someone with specialized experience with these types of returns. 

Read the full IRS story from the Wall Street Journal here.

Mandatory Mediation In Divorce — Why It's Working Abroad

A recent change in English law will make mediation mandatory for all couples who are seeking divorce in England. The change comes as English lawmakers hoped to speed up the divorce process as well as help lighten the case load for English courts that are bogged down with family law disputes. The new law, which went into effect in April, requires that all couples take part in a mediation session before going to court to resolve their differences.

Lawmakers hope that the mandatory mediation may help many couples use a tool they might not have known about before, which may also help them find alternatives to resolving their family issues before a judge. As one solicitor put it, “Their core message of keeping families away from the negative effects of court battles is surely a positive step.”

To learn more about how England is changing the family law process, read this or this.

And to learn more about how you and your family might benefit from mediation, read this.