A new law (Assembly bill A08273A) was recently enacted that requires parties in an action for divorce to be made aware of the potential loss of their health care coverage obtained through their spouse’s health insurance.
The law requires that any agreement between parties in a divorce action contain the following language:
I fully understand that upon the entrance of this divorce agreement, I may no longer be allowed to receive health coverage under my former spouse’s health insurance plan. I may be entitled to purchase health insurance on my own through a COBRA option, if available, other-wise I may be required to secure my own health insurance.
The judgment of divorce will reiterate that the parties understand and have acknowledged the potential loss of medical coverage.
According to the legislative memo the justification for the bill is as follows:
Divorce settlements can be a long, arduous process for all parties involved, therefore it is important to ensure that throughout the course of the negotiations, parties are aware of all issues relating to an individual’s well-being once a settlement is reached. Whether or not a party to a divorce action has health insurance coverage once a settlement is reached is of crucial importance, and explicit provisions addressing these facts should be included in any rendered judgment. This legislation ensures that parties who receive health coverage under their spouse’s plan are made aware of their loss of health insurance coverage upon the issuance of a divorce.
Although I am unaware of any cases in which a party to a divorce, represented by counsel, entered into an agreement under the false impression that he/she would remain covered by their spouse’s medical insurance, it is certainly wiser to err on the side of requiring full and complete disclosure of all relevant facts.