Divorce Mediation Blog

Post-Divorce Health Insurance in Massachusetts: Time to Close the Self-Insurance Loophole?

Wednesday, June 05, 2013

Many years after Massachusetts created significant rights for divorcing families beyond the federal "COBRA" benefits for coverage of ex-spouses, an important loophole remains that undermines objectives of those statutes. In this entry, we will consider one of the exclusion of "self-insured" company medical plans from the scope of these enumerated rights.

In simple terms, our law states that medical insurers cannot exclude unmarried ex-spouses from an employee's family plan coverage post-divorce; and even if the employee-spouse remarries, the insurer must extend "rider" coverage to the unmarried former husband or wife. The insurance carrier may charge for rider coverage, but it may not surcharge. These benefits significantly exceed the so-called "COBRA” coverage provided by federal statute (36 months of maximum coverage at surcharged rates).

Yet, these benefits are not available to everyone with employment medical coverage in the Commonwealth. That is because these statutes do not apply to so-called “self-insured” medical plans (where the employer assumes the risks of employee medical costs, rather than an insurer), leaving their divorcing employees and their families to the lesser federal COBRA benefits. (Worse still, as we will discuss in a later entry, same sex divorcees have no protection at all, since they do not qualify for COBRA at this time.)

The reason for this unfortunate loophole is that these laws are insurance-based. They fall within the insurance statutes, regulating that industry; and the legislature did not extend these substantive family law rights beyond the insurance statutes. Further, what looks like an insurance plan may not be one. Self-insurers often hire insurance companies to serve as “administrators” of the plan, while the risk of loss remains the employer’s. Thus, while the employee may have what looks like an insurer’s coverage card, the law does not apply.

Meanwhile, since the 2006 Health Reform law here, the policy of the Commonwealth is that all residents have medical insurance. Next year, that will be effective federal law, too. The self-insured loophole is certainly inconsistent with these state and federal policies. Moreover, is it not unreasonable to disproportionately burden divorced persons who are unlucky enough to have a self-insured employer? Under current law, they can obtain private coverage, but it is routinely more expensive and/or less comprehensive than group employment coverage.

If the intent of the insurance laws and health coverage reform is to assist divided families, and to protect taxpayers from funding the insurable medical expenses of split dependents, is there any sustainable policy basis for maintaining this gap in the law? As divorce mediators, we grapple with the impact of the self-insured loophole.

Isn't a legislative fix long overdue?

Get e-mail notifications of new blog posts! Enter email address below.:

Delivered by FeedBurner

other articles

recent posts


MLB labor agreement divorced Massachusetts lawyers Child Support Guidelines Massachusetts med/arb Divorce Agreements IRC §2704 arbitration Baseball mediations alimony orders rehabilitative alimony self-adjusting alimony Self-adjusting alimony orders divorce and family law Massachusetts Alimony Reform Act arbitrator separation divorce arbitrators how baseball arbitration works General term alimony lawyer COLA Major League Baseball Arbitration divorce mediations alimony law mediation divorce mediator Massachusetts divorce mediators Act Reforming Alimony in the Commonwealth private dispute resolution Same Sex Marriage dispute resolution LDRC The Seven Sins of Alimony alimony reform legislation Chouteau Levine divorce and family law mediators DOMA mediator Levine Dispute Resolution Center disputes annulment divorce judgment family mediation Boston divorce mediators Levine Dispute Resolutions divorce litigation Levine Dispute Resolution divorce process medical benefits child support med-arb Massachusetts divorce lawyers health coverage alimony Matrimonial Arbitration Defense of Marriage Act high-risk methodology pre-ARA alimony divorce arbitrator support orders resolve disputes lawyers Uniform Arbitration Act divorce arbitration family law arbitrators family law mediation special master Alimony Reform Act divorce lawyers Massachusetts alimony and child support family law arbitrator mediators divorce mediation litigation Baseball Players Massachusetts Lawyers Weekly traditional negotiations Cohabitation conciliation SJC family support Divorce arbitrators fraud Baseball Arbitration divorce agreement health insurance Levine Dispute Resolution Center LLC facilitated negotiations Obamacare Family Law Arbitration Massachusetts alimony lawyer-attended mediation alimony statute family law family and probate law disputes