Losing a spouse has a significant impact on your household finances. Perhaps you lost a substantial source of income or the ability to grow your spouse’s retirement plan. One financial ramification that requires your immediate attention concerns health insurance.
If you received coverage under your spouse’s health insurance plan, you need to take steps to continue the coverage or search for an alternative source of coverage. If your health insurance policy covered your spouse, you might have to make a few changes to the policy.
What you need to do after the death of your spouse depends on the type of health insurance plan.
Employer-Sponsored Health Insurance Policy
Spouses and children up to 26 years of age receive health insurance coverage under an employer’s plan. When your spouse died, you lost dependent coverage after a designated grace period that allows you to make the transition to another policy. You should contact the human resources department where your spouse worked to determine how much longer you receive health insurance under your deceased spouse’s policy.
For most plans sponsored by an employer, dependents can purchase health insurance through a policy created by the Consolidated Omnibus Budget Reconciliation Act (COBRA). COBRA allows you to purchase health insurance for up to 36 months, which gives you three years to transition to another health insurance plan. You usually have 60 days after the day your spouse passed away to sign up for COBRA health insurance coverage.
A COBRA plan can be expensive because you pay the full cost of the premium, which includes the portion of the premium paid by your spouse’s employer.
Marketplace Plan Created by the Affordable Care Act
The Affordable Care Act (ACA) provides Americans with a window of about six weeks every year to buy health insurance on the marketplace exchange. From November 1 to December 15, you can buy a new policy, makes changes to your current policy, or request that you want to end your exchanged-base health insurance plan.
If your spouse died outside of the six-week open enrollment period for health insurance, you might qualify for a Special Enrollment Period (SEP). An approved SEP must involve a Qualifying Life Event (QLE), which is a formal way of saying a major life event. Getting married, having a child, and the death of a loved one typically qualifies Americans for a QLE.
The establishment of a SEP for the loss of your spouse starts a period of 60 days when you apply and receive coverage for health insurance. You need to verify your eligibility that in the case of the death of your spouse, requires you to submit a copy of your spouse’s death certificate and possibly certain medical records.
Medicaid Health Insurance
To become eligible for Medicaid, you must fall under the income limit established by the program. One effective tool that allows you to qualify for Medicaid with a higher income than the limit imposed by the program is called a Medicaid Asset Protection Trust (MATP). A MATP allows you to shelter assets in a trust that does not count toward the income limit imposed by Medicaid. You also receive protection from creditors and legal judgments.
Every state creates and manages its own Medicaid program, which includes establishing the types of services provided by the health insurance initiative. Federal law mandates all Medicaid programs to cover a minimum number of mandatory benefits, such as x-rays, outpatient hospital services, and nursing home services. Other mandatory benefits offered by Medicaid health insurance include physicians services, home health services, and freestanding birth center services.
What Happens When Your Health Insurance Covered a Deceased Spouse?
If your health insurance policy covered your deceased spouse, you should let your employer’s human resources department know about the life event as quickly as possible. The amount of your monthly premium, as well as other costs, might change because of the loss of a dependent. If you covered your spouse with an exchange-based health insurance policy, then you might be eligible to participate in a Special Enrollment Period.
What Do Retirees Have to Consider?
Because there is not any health insurance coverage for dependents under Medicaid and Medigap, you need to inform both federally run programs about the death of your spouse. Both programs should stop billing you for healthcare services. If you received health insurance coverage as part of your spouse’s retirement package, the death of your spouse might impact your coverage. The health insurance plan given to your spouse for retirement should establish guidelines for the coverage of a surviving spouse.
The Bottom Line: Get Help From Insurance Broker Hub
The death of a spouse is one of the most devastating life events. Do not allow the passing of your spouse to devastate your finances. Be proactive when it comes to managing your personal finances, especially when it comes to health insurance.
If you’re looking for advice and options for health insurance after the death of a spouse, look no further than Insurance Broker Hub. Our free service gives you access to an independent network of national brokers who have the experience and expertise to design a plan around your needs and budget. Ready to get started? Simply request a no obligation health insurance quote here.