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


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