Health Insurance, Divorce and the Affordable Care Act

One of the biggest concerns for people going through divorce is losing health insurance. The Affordable Care Act (aka “Obamacare”) significantly changed the way health insurance is dealt with in divorce. In short, the Affordable Care Act makes it much easier to obtain health insurance coverage after you go through divorce. Here are the basics that you need to know:

Open Enrollment. Open Enrollment is the period of time when you have to apply for health insurance unless an exception applies (called a “special enrollment period”). The open enrollment period for 2016 is November 1, 2015 through January 31, 2016.

Special Enrollment Period. You can apply for health insurance during a “special enrollment period” if you have 1) a qualifying life event or 2) other complicated situation.

Qualifying Life Event. There are many different qualifying events. The one that most commonly applies in a family law situation is divorce. Other qualifying life events that may occur during the divorce process include loss of job, loss of health insurance coverage or significant reduction in income. If you do not qualify under one of these scenarios, you should determine if there are other qualifying life events that may apply in your situation. If you are not eligible under a qualifying life event, then you should determine whether you can apply as a “complicated situation.”

Complicated Situation. If you have a particularly complicated situation but do not have a “qualifying life event”, you should discuss your circumstances with a health insurance broker or other HealthCare.gov worker. Your circumstances may still qualify you for a special enrollment period. Domestic abuse and spousal abandonment are two situations which may qualify as a complicated situation. There are potentially other situations which may qualify you as well.

COBRA. COBRA is a federal law which was the basis for maintaining health insurance after divorce prior to the passage of the Affordable Care Act. COBRA allows you to maintain the same health insurance plan you have had for up to 36 months. However, COBRA is often expensive and does not apply in all situations (e.g., the employer must have at least 20 employees). COBRA may still be a good option if you need to maintain your specific health insurance plan.

Tip: You may be eligible for COBRA through your soon-to-be-ex’s employer and a private policy through the Affordable Care Act. You should check to see how much COBRA costs and compare it to the cost of a plan through the Affordable Care Act. Cost is obviously a significant consideration, but you should also compare the level of coverage and whether your preferred healthcare providers are covered under the new plan.

Tip: You can apply for health insurance through Healthcare.gov on your own or you can work with a health insurance broker (some states run their own individual exchanges although Oregon no longer does). You do not pay a health insurance broker for their services. Health insurance brokers get paid by the insurance companies. It may make sense to work with a broker since there is no additional cost to you and they know how to navigate the health insurance system. One health insurance broker you may consider using is Portland, Oregon based Century Benefits.

End of Prior Coverage. Generally speaking you will continue to be covered under your ex-spouse’s health insurance through his or her employer through the end of the month in which the divorce is final. However, some employers will terminate coverage for a now-former spouse immediately upon learning about the divorce. It is important for the employed spouse to check with the employer before the divorce is final to learn when the ex-spouse will be removed from coverage. This information should be shared with the spouse who will be losing coverage.

Legal Separation. It is fairly common for people to get a legal separation rather than a divorce so that the former spouse can continue health insurance benefits. If you are considering a legal separation for health insurance reasons it is necessary that you check with your employer to determine whether the employer treats legally separated spouses as married or as divorced. Your employer’s HR department should be able to provide you with this information.

Summary. It is much easier to obtain health insurance after a divorce than it used to be. However, there are specific timelines that may apply to your situation. It is important that you obtain information about health insurance before you get divorced so that you have a plan for insurance once the divorce is final. You can obtain more information through OregonHealthCare.gov or HealthCare.gov.

This is only an overview. You should discuss the specifics of your situation with a health insurance broker or other health insurance professional.

Obtaining Certified Copies of Your Divorce Judgment

A “certified” copy of a judgment contains a certificate or seal from the court which proves that the judgment is an accurate copy which came from the courthouse.  Most of the time a non-certified copy of your judgment will be sufficient for whatever you may need it for.  However, there are a number of reasons you may need a certified copy of your judgment.  The court does not automatically send you a copy of your judgment so you, your mediator or your attorney will need to arrange to obtain a copy and pay the applicable fee.

Here are some of the most common reasons you would need a certified copy of you divorce judgment in Oregon:

  • Name change
  • If one person has PERS, even if the account is not being divided
  • Registering your judgment in a different state
  • Life insurance

Cost of Certified Copies.  In Oregon a certified copy of your judgment costs $5 plus $.25 per page.  For example, if you have a 20 page judgment, the fee will be $10 (.25 x 20 pages = $5; plus $5 for certification = $10).

Obtaining Certified Copies.  Certified copies need to be obtained directly from the courthouse where the case exists.  You can obtain the copies in person or order them via mail.  If you go in person you can usually obtain the document immediately.  It usually takes the court several days after the judge signs the judgment for your judgment to be available.  If your judgment was signed recently you should call the courthouse to see if it is available before going there.  If you order it via mail it could take 2 to 4 weeks or longer.  You may need to provide a pre-paid, self-addressed envelope depending on the county your case is in (Multnomah county does not require this).

Here are the addresses for the three main courthouses in the Portland-metro area:

Washington County Courthouse
150 N 1st Ave.
Hillsboro, OR 97124

Clackamas County Courthouse
807 Main St.
Oregon City, OR 97045

Multnomah County Courthouse
1021 SW 4th Ave.
Portland, OR 97204

QDRO’s.  Certain types of retirement accounts require something called a Qualified Domestic Relations Order (QDRO) in order to divide the account.  Your attorney or mediator will help you identify whether you need a QDRO.  If your case requires a QDRO, you will need a certified copy of it in order to divide the retirement account.  The process for obtaining a certified copy of a QDRO is the same process as obtaining a certified copy of your divorce judgment.

 

Modifying Your Oregon Divorce Judgment

A divorce (or custody case) is a major life event which is based on the circumstances that exist at the time your judgment is finalized. What happens if things change several months or even several years after your judgment has been signed? Here is a basic guide to modifying your divorce or custody judgment in Oregon. This is only an overview and is not intended to be legal advice – you should discuss the specifics of your situation with your mediator or attorney.

Overview. Generally speaking, child related issues and spousal support are subject to modification. Property division, on the other hand, is final. A property division can only be reopened if you discover that an asset or liability was omitted (either accidentally or intentionally) from your original judgment. ORS 107.452 is the statute that applies if an asset was overlooked in the original divorce.

Child Support. Child support can be modified when 1) there has been a substantial change of financial circumstances; 2) every three years even if there is no change of circumstances; or 3) if both parents agree to the change. It is important to note that a change to child support must be put into a new judgment which gets signed by a judge. It is not sufficient to have a “handshake” deal regarding child support.

In Oregon child support can be paid up until age 21 if the child qualifies as a “child attending school” under ORS 107.108. What this means (oddly enough) is that your child is a party to your divorce between the ages of 18 and 21 and that he or she can file a motion to modify your divorce judgment to seek child support from either or both parents.
Parenting Plan. The legal standard for modifying a parenting plan is simply a “best interest of the child” standard. In other words, if someone thinks it is in the child’s best interest to change the plan, they can make a formal request to change it either by filing a motion with the court or proposing to go through the mediation process.

Like child support, a parenting plan can be modified anytime both parents agree. One-time change do not need to be put into a new parenting plan. However, if you are going to make a permanent change to the parenting plan then you should submit a new parenting plan to the court (using a Stipulated Supplemental Judgment) and get it signed by a judge. You should be aware that a new parenting plan is not enforceable unless it is in a new judgment that is signed by a judge.

There is a common misconception in Oregon that there is a certain age at which children are allowed to pick where they live. That is not true. However, based on the circumstances of your situation (e.g., child’s age, maturity level, etc.), a child’s preference may be taken into account in developing the parenting plan. In certain situations parents will sometimes include their teenage children in the mediation process when developing a parenting plan so that the children’s preference can be considered.

Decision Making (Custody). The decision-making provision of your judgment (i.e., legal custody) is subject to modification as long as your children are under 18. Joint custody can essentially be modified whenever one parent decides that joint custody is no longer working well and files a motion to sever joint custody. At that point the court has to award sole custody to one parent or the other since there can be no joint custody in Oregon unless both parents agree. Sole custody can only be modified when there has been a substantial and unanticipated change of circumstances that goes to the ability of one parent or the other to care for the children.

Spousal Support. Spousal support (alimony) can be modified any time that both parties agree to it. If there is no agreement, then applicable legal standard is that there must be an “unanticipated and substantial change of circumstances” to change support, i.e., a major life event. Just because there has been a major life change does not necessarily mean that support will be modified; it only means that someone can request a modification. Whether or not there is a modification will depend on the facts and circumstances at the time that the request is made.

Common reasons for modifying spousal support include retirement of the payor, the payor losing his or her job, the recipient getting remarried or the recipient changing careers and significant increasing his or her own earnings. Again, just because one of these things happens does not automatically mean that a spousal support modification will be granted.

As with child support, a new spousal support agreement must be put into a new judgment which gets signed by a judge. Failure to put the modified support arrangement into new judgment will make the agreement ineffective and can lead to some very serious negative consequences for one or both parties.

Spousal support can only be modified as long as there is a spousal support order in place. Additionally, spousal support cannot be ordered later on if there was never a spousal support order in the first place. Lastly, if your spousal support order has ended it cannot be reinstated. There is an exception to this rule which is that if spousal support had been terminated early and the reason for termination has ended the spousal support can be reinstated if you are still within the timeframe of the original support award.

Misc. Issues. There are a number of other smaller issues that are subject to modification, although they are typically only addressed if one of the major issues above is also being modified.

Some of those smaller issues include:
• Who will provide health insurance for the children;
• How the children’s unreimbursed medical expenses will be paid;
• How non-medical expenses for the children will be paid;
• The amount of life insurance that needs to be maintained; and
• Who will claim the children on their taxes.

Mediation tends to be a very efficient process for dealing with modifications. Usually a modification can be mediated in just one or two mediation appointments. Once an agreement is reached, Forrest can prepare all of the necessary documents and file them on your behalf. There is a $150 filing fee that gets paid directly to the court each time you file a modification.

What to Do Now That Your Judgment is Signed

During the divorce process you are spending time figuring out what is going to happen after the divorce judgment is signed. Generally speaking, the things that need to happen after the divorce do not happen automatically, i.e., you have to take steps to carry out the various provisions of the judgment.

Here are several things to keep in mind for after your divorce judgment is signed. This is not a complete list, but it does include the things that come up most frequently.

Signing Deeds. If you have a home and it was awarded to someone, the judgment probably requires that the person leaving the home signs a Bargain and Sale Deed transferring their interest in the home. Once the Deed is signed, it needs to be recorded with the county recorder’s office in the county where the property is located. The recording fee is usually $40 to $50.

IRS Form 8822. If you have moved or changed your name as a result of the divorce, you need to fill out IRS Form 8822 to notify the IRS of the change.

IRS Form 8332. Not to confused with IRS Form 8822, IRS Form 8332 needs to be filled out when you are releasing the right to claim a child for the dependency exemption. This can be filled out to release the exemption for a single year or for multiple years.

Closing Joint Credit Cards. Judgments usually provide that all joint credit cards will be closed. You can make sure this happens by calling the credit card company and filling out their applicable forms. One way to check and see if there are any joint credit accounts that are still open is to check your credit report. You can get one free credit report from each of the three major credit bureaus one time per year. There are many websites that will allow you to do this, but many of them will charge you. The government sponsors a website called www.annualcreditreport.com which allows you to get these reports free of charge.

Child Support. If your judgment requires that child support (or spousal support, for that matter) is to be paid by wage-withholding, you can speed up the process by filing an application for services with the Oregon Department of Justice. You can find a link to the application here. If you file this application it will speed the process up and you will begin receiving support sooner.

Life Insurance. If someone owes child support or spousal support, the judgment usually requires that they also maintain life insurance for as long as they owe support (including past-owed support). The basic idea is that if someone is relying on child support or spousal support and the person paying support dies, the person receiving support will be severely impacted financially. This concern is addressed by requiring the person paying support to maintain life insurance naming the support recipient as beneficiary (sometimes a trust is named as the beneficiary).

The person who is supposed to maintain the life insurance has to provide the other person with a copy of the policy. The person who is receiving support – and therefore is the beneficiary of the life insurance – has to send a certified copy of the judgment to the applicable life insurance company. The life insurance company must be instructed to provide notice to the beneficiary if the insured ever misses a payment or makes changes to the policy. There are very specific rules and requirements, so it is a good idea to talk to your attorney or review the applicable statutes before doing this (your attorney may do this for you).

Name Change. A divorce judgment can be used to change your name back to a name that you previously had (usually a maiden name). Your name is legally changed once the judge signs the divorce judgment. However, nobody other than you knows about it! It is your responsibility to inform all of the various institutions and entities that you are affiliated with that your name is now changed. These include, but are not limited to: the DMV, the IRS, the Social Security office, your employer, your bank, your gym, any financial company you work with, your utility companies, etc. Most of these places will accept a conformed copy of the judgment; some of these places may require a certified copy of the judgment. The Social Security office requires a certified copy of the judgment.

Transferring Retirement. Many divorce judgments require that retirement accounts be transferred either completely or partially from one person to the other. Since the retirement is being split pursuant to a divorce there will be no taxes and no 10% penalty at the time of the division as long as it is done correctly. It is important that you work with a qualified pension attorney to prepare a Qualified Domestic Relations Order (QDRO). QDROs are required to divide most types of accounts, including pensions, 401(k)s, 403(b)s, etc. A pension attorney will usually charge between $500 and $800 to prepare a QDRO and see the process through until the account is actually divided. This process can take several months or more. IRA’s do not require QDRO’s. You should be able to transfer retirement from an IRA by filling out the applicable form and providing a copy of your judgment. Note: Do not actually withdraw funds and give them to the other person. You have to follow the QDRO or IRA division process.

Health Insurance. A now-former spouse can only remain on a spouse’s health insurance through the end of the month in which the divorce is final. For example, if the judgment is signed on March 3rd, then the former spouse will usually be covered through the end of March. Note: Some employers will terminate coverage immediately so it is important to check with the employer before hand to determine if that is the case). If you are the person who was providing the insurance through your employer, you have to tell your employer as soon as the judgment has been signed. If you are the person who will be losing insurance, you need to decide what you are going to do about health insurance going forward. Depending on the situation, you may have the option to continue with the same health insurance company that you previously had for a period of time. There are different rules that will apply depending on the size of the company and your age at the time of the divorce. Further, there are very strict timelines associated with electing to continue to receive health insurance through a former spouse’s health insurer. Tip: You should try to determine how you are going to handle health insurance after you are divorced before the divorce is actually final.

Satisfaction of Judgment. If someone owes money to someone else, usually this shows up as a judgment lien against the person owing the money (there may be exceptions depending on how your judgment is structured). It is important for the person who owed the money that they are able to prove that they have paid the money owed. Once all of the money owed has been owed, the person who paid the money can request that they person who received the money signs a Satisfaction of Judgment. The Satisfaction of Judgment then gets filed at the applicable courthouse. The Satisfaction of Judgment serves as proof that payment has been made.

These are the most common things that need to be addressed following your divorce, but it is not an exhaustive list. Be sure that you review and understand the terms of your judgment. If you have questions about enacting the terms of your judgment, be sure to ask your lawyer or mediator.