Continuation of health insurance is a major point of concern for many people when they are going through a divorce. Generally, spouses are listed together on one spouse’s health insurance policy. After a divorce, one party may be forced to find new insurance, which may more expensive or less robust than the policy they were on with their former spouse.
Fortunately, divorcing spouses of current or retired federal employees can continue their health insurance coverage through a system known as spouse equity. The spouse equity system allows former spouses of government employees to continue their coverage as long as they pay the required premium associated with the insurance.
Eligibility requirements for spouse equity
Not all former spouses qualify for the coverage. There are a few requirements that both the former spouse and the federal employee must meet, as follows:
- The divorce occurred while the worker was a federal employee or while the worker was receiving an annuity as part of his or her federal retirement package.
- The spouse was covered under the Federal Employees Health Benefits Program for at least one day in the 18 months preceding the divorce.
- The spouse is entitled to a portion of the employee’s annuity or to a survivor annuity;
- The former spouse did not remarry before age 55.
Assuming the spouse meets those criteria, then he or she is eligible for continuation of FEHB health insurance coverage.
The spouse equity enrollment process
Although establishing eligibility isn’t difficult, the approval process can be lengthy. It’s important for a former spouse to understand the process in order to make contingency plans for temporary coverage.
The enrollment process begins with a written application to the appropriate government agency. The application must be submitted within either 60 days of the termination of the marriage or 60 days from the time notification was given that the spouse is entitled to a portion of the employee’s retirement annuity. If the application isn’t submitted in person, the review board will use the postmark to determine the date of submission.
The application must include:
- Any forms required by that specific agency.
- A certified copy of the divorce decree, settlement or order.
- The employee’s Social Security number, age, name and last employing agency.
After an application is submitted, it is reviewed by the U.S. Office of Personnel Management. The agency sends written notification for both approvals and rejections.
During the review, the OPM will first confirm that the employee either retired from a government agency or was employed at an agency at the time of the divorce. Next, it reviews all of the spouse-specific criteria to make sure the former spouse is eligible.
Once a spouse receives an approval letter, the spouse is free to enroll. The spouse can either enroll immediately or delay the enrollment indefinitely. The spouse must also sign a certification stating that the spouse will notify the OPM within 31 days should they experience anything that would change their eligibility. This is usually a remarriage before the age of 55.
Many former spouses ask what they should do for coverage while OMB is reviewing their application. To cover any gaps, former spouses of government employees may apply for a 31-day extension of coverage that begins immediately after the divorce. Spouse equity approvals often take longer than 31 days to complete, so the spouse usually has to find other temporary coverage options.
Alternatively, the spouse could take advantage of the Temporary Continuation of Coverage provision, which allows certain individuals to continue their insurance coverage for a limited period of time. Former spouses of government employees can continue coverage under this provision for up to 36 months. During that time, they must pay the full premium plus a small administrative charge.
The main distinction between TCC and spouse equity is that the latter is permanent, while TCC can only be kept for up to 36 months. The TCC provision may be effective as a bridge to permanent coverage, but spouses may not want to think of it as a long-term solution.