Question: My husband and I separated nearly two years ago and have been involved in an on-going battle for more than 18 months. We have two children (11 and 16). Because of a disability connected with the birth of our younger child, I have not worked outside the home for the past 12 years. Although I am a teacher by training, my children and I are completely dependent on my husband financially. He works for a company that provides him with many benefits, including health coverage which is one of my major concerns. My lawyers tell me that my children and I will be entitled to automatically continue our health coverage through my husband’s employer, but no one has told me about the cost or how this works. Is it that easy, or are they missing something, or am I making it too complicated?

Answer: It’s not that easy. They are missing something. You are right to be concerned, especially because of your disability.

Generally speaking, a federal law called “COBRA” requires employers with 20 or more employees (1) to provide continued health insurance coverage to divorcing spouses and dependent children at group rates for a specified period of time and then (2) to make available conversion of that coverage into individual health policies thereafter. Unfortunately, the coverage is not “automatic” as your advisors suggest, and there are technicalities that must be addressed.

“COBRA” (which stands for the federal Consolidated Omnibus Budget Reconciliation Act) applies to group health plans provided by not only private companies, but also state and local governments, but excludes the health plans of some church-related entities, railroad retirement plans, and employers with less than 20 full-time employees. In addition, each state has laws which may affect your rights.

COBRA defines a “group health plan” as an employer plan which supplies medical benefits to employees and their dependents through either traditional health insurance, a trust, an HMO (health maintenance organization), a self-funded or partially self-funded arrangement by which the employer assumes all or part of the risk, a reimbursement plan, or a combination of plans. COBRA does not apply to life insurance.

In order for you and your children to qualify for continued group health benefits, (1) your husband’s employer must have a “group health plan” which is subject to the federal law as we have described above; (2) You and your children must be considered to be “qualified beneficiaries” of an employee who are covered under the plan on the day before the "qualifying event" (as a spouse and dependent children of an employee, you and your children should meet this requirement); (3) A "qualifying event" must occur -- this “event” in your situation would be the filing of a decree of divorce or legal separation between you and your husband who is a covered employee.

According to COBRA, within 60 days after a divorce decree or legal separation is entered, your husband as employee or you as a qualified beneficiary must notify the health plan administrator about the qualifying event. Within 14 days after being notified of the qualifying event, the plan administrator is required to notify all qualified beneficiaries of their rights to elect to take continued coverage. From the date, you and your children have 60 days to make your elections. Either you or your husband may elect COBRA coverage on behalf your dependent children.

Once the election is made, the maximum length of continued coverage for you and your children under the group health plan is 36 months unless 1) you do not pay the premiums on a timely basis, 2) your husband’s employer terminates all group health plans, 3) you or your children secure coverage with another employer group health plan that does not contain limitations regarding pre-existing conditions, or 4) you become entitled to receive Medicare benefits because of your disability. In addition, if your children are no longer dependents, their coverage will terminate earlier.

As qualified beneficiaries, you and your children will be entitled to receive the exact same benefits as were were provided immediately before your qualification for continuation coverage. The cost of this coverage for you and your children cannot exceed 102 percent of the cost to the plan for "similarly situated" beneficiaries, and the initial premium is due within 45 days after your election of continued of COBRA coverage.

Lastly, you – and your children – will be entitled to “conversion rights” when your continuation coverage has ended. Notice of your option to enroll in conversion coverage must be provided to you within 180 days prior to date on which your group continuation coverage will end. The cost of conversion coverage could be – and probably will be – very high.

Health insurance issues must be given the highest priority, and nothing is automatic.