If you’ve researched what happens to your health insurance after divorce in New Hampshire, you’ve likely come across RSA 415:18, VII-b — the state law that can allow a former spouse to remain covered under an ex-spouse’s group health insurance policy for as long as three years after the divorce decree. It can be an important protection. But there is a critical wrinkle that catches many divorcing spouses off guard: the statute generally applies to insured health policies, not self-funded employer health plans. If your spouse’s plan is self-funded, your options may look very different.
What’s the Difference Between Fully Insured and Self-Insured Plans?
The distinction isn’t obvious from your insurance card, but it can matter enormously.
Fully insured plans are what most people picture when they think of employer health coverage. The employer purchases a group insurance policy from an insurance company, and the insurance company bears the financial risk of paying covered claims. Because an insurance policy is being issued, state insurance laws such as RSA 415:18 can apply to that policy.
Self-funded (or “self-insured”) plans work differently. Instead of purchasing insurance that bears the claims risk, the employer itself funds employees’ medical claims, frequently hiring an insurance company or third-party administrator to administer the plan. The name on the insurance card therefore does not necessarily tell you whether the plan is insured or self-funded.
For private-sector employee benefit plans governed by ERISA, federal law generally prevents states from applying state insurance mandates directly to a self-funded plan. As a result, New Hampshire’s special post-divorce coverage protection under RSA 415:18, VII-b generally does not apply to those self-funded plans.
Why This Matters in Your Divorce
If your spouse is covered by an insured group policy to which RSA 415:18, VII-b applies, the statute generally allows an eligible former spouse to remain covered after divorce as though the divorce had not occurred, without an additional premium or medical examination.
That protection can continue until the earliest of several events: the three-year anniversary of the divorce or legal-separation decree, the former spouse’s remarriage, the insured member’s remarriage, the insured member’s death, or an earlier date specified in the divorce decree.
That is substantially different from ordinary continuation coverage.
If your spouse’s plan is self-funded and RSA 415:18, VII-b does not apply, other options may include:
- Federal COBRA or another applicable continuation right, which in many divorce situations can permit continuation for as long as 36 months. COBRA coverage can require payment of as much as 102% of the applicable group premium.
- ACA Marketplace coverage, potentially with premium assistance depending upon income and eligibility.
- Coverage through your own employer, if available, because divorce and loss of other coverage will often create a special enrollment opportunity.
Which options actually apply depends upon the employer, the type of health plan, and the circumstances of the divorce.
Continued Coverage and Who Pays for It Are Different Questions
Another important distinction is between the right to remain covered and which former spouse ultimately bears the cost of health insurance.
RSA 415:18 is primarily an insurance statute. It tells insurers when certain continuation and former-spouse coverage rights must be made available. It does not, by itself, resolve every financial issue between the divorcing spouses.
For COBRA and certain other continuation coverage, RSA 458:18-a specifically recognizes that the premium may be paid by the employee-spouse, the former spouse, or both of them, as they agree or as the divorce court orders.
The special three-year protection under RSA 415:18, VII-b is somewhat different. That statute says that an eligible former spouse remains covered under the group policy “without additional premium,” and RSA 458:18-a expressly provides that its continuation-premium allocation provision does not affect or limit rights under VII-b.
The practical point is that couples and their attorneys should not assume that identifying the available insurance coverage automatically answers every question about health-insurance costs between them. The divorce agreement or court order should address any insurance expense that does need to be allocated between the parties, including COBRA or replacement coverage where applicable.
How to Find Out Which Type of Plan You’re On
Don’t assume — verify.
A useful starting point for an employer-sponsored plan is the plan’s Summary Plan Description (SPD) and other plan documents available from the employer or plan administrator. Those materials will ordinarily identify who funds the benefits and can help determine whether the arrangement is insured or self-funded.
Your attorney can also seek the relevant plan information during the divorce process if necessary.
This is not a detail to leave until after the divorce is finalized. Whether RSA 415:18, VII-b applies, what continuation coverage will be available afterward, and who will bear any resulting premium expense can materially affect settlement negotiations and post-divorce budgeting.
Plan Ahead, Not Around It
Health insurance can be one of the largest ongoing expenses a divorcing spouse needs to plan for, and the insured/self-funded distinction can make a major difference.
Knowing what kind of plan your spouse actually has — early in the process — allows you and your attorney to evaluate the available coverage and negotiate realistic financial terms. Depending upon the circumstances, that may include allocating COBRA premiums, accounting for the cost of replacement insurance in the parties’ overall financial arrangements, or coordinating the timing of other available coverage.
At Cohen & Winters, we help clients think through these practical, often overlooked issues as part of a comprehensive divorce strategy — not just the headline questions, but the details that actually determine your financial stability afterward. If you’re facing divorce and have questions about your health insurance options, contact our office today for a free consultation.