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


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