Obamacare The Affordable Care Act and Michigan divorce: According to the University of Michigan, a divorce results in about 115,000 women losing their private health insurance every year.
Many rely on the Consolidated Omnibus Business Reconciliation Act (COBRA) to provide relief. If a former spouse is employed by a company that offers health insurance (and meets other technical requirements), they must offer COBRA. The cost of COBRA is directly related to the cost paid by an employer. If they negotiated a good deal, you get the benefit of the bargain, however, COBRA is often expensive. In addition, COBRA coverage can only last 36 months.
Under Obamacare, many people will be eligible for a government tax credit toward insurance coverage. The availability of the government tax credit entitlement will likely effect both alimony and property considerations in a divorce.
When we consider alimony, primary considerations include the difference of the parties incomes and the parties expenses. Therefore, the cost of health insurance will often effect an alimony award. After all, there is only so much money to go around when parties divorce. However, the Obamacare government tax credits may be seen as a form of income, similar to Social Security.
Court’s have spoken on Social Security but are silent on Obamacare.
It is well settled law that Social Security benefits are not divisible in a divorce. However, it remains to be seen if Obamacare government tax credits will be. Even if they are not, the entitlement will certainly change the negotiation landscape in a divorce.
This is what the discussion may look like: “Why should my client pay for COBRA when your client has an Obamacare government tax credit?” or even “My client wants 1/2 of the Obamacare tax credit”?
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By: Daniel Findling
The Divorce Guy, Michigan Divorce Attorneys and Specialists