As winter approaches, so does open enrollment, the annual window to sign up for, renew, or change your health insurance plan. In 2025, open enrollment runs from November 1 to January 16, 2026. If you’re navigating coverage for the first time after a divorce or simply reassessing your options, this article is designed to help.
A change in marital status, such as divorce, is considered a “qualifying event,” which opens a special window to enroll in or adjust your health insurance plan. For those without a qualifying event, open enrollment is the time to make changes. Whether you’re newly independent from a former spouse or just exploring alternatives, understanding your choices is key, especially if you’re not yet eligible for Medicare. If you’re nearing or past age 65, you will be eligible for Medicare. There are dedicated resources available to help you understand and evaluate your Medicare coverage options and it is important to note that the Medicare open enrollment window differs slightly from the open enrollment that will be discussed below.
To make the insurance conversation a little easier to understand, let’s start by considering what it has in common with a winter jacket. With both, you are looking for a competitive price, appropriate protection, and a comfortable fit. After a divorce, you may find yourself without the familiar warmth of your former spouse’s health insurance. It is like losing a jacket you have worn for years. You, and potentially your children, now need health coverage. This could feel overwhelming, but there are options.
Option 1: COBRA
The first option you are likely presented with post-divorce is referred to as ‘COBRA’ (pronounced like the snake), short for the Consolidated Omnibus Budget Reconciliation Act. It is like a metaphorical coat rack that lets you rent a jacket. It allows you to continue an existing employer-sponsored health insurance coverage temporarily. While not a permanent solution, it can keep you covered while you find a new policy that suits your unique needs.
Here are a few key elements to know:
· Eligibility: COBRA is a federal law requiring employers with 20 or more employees on their group health insurance to provide the option to continue current coverage for a certain amount of time. If your former spouse worked for a larger employer, you likely qualify for COBRA, and you may not be required to find new coverage immediately.
· Duration: In the event of divorce, coverage can be kept by the former spouse and their children who are under the age of 26 for up to 36 months It is important to monitor when your COBRA is set to expire so you have ample time to plan for obtaining new coverage. Generally speaking, consider looking for new health insurance coverage at least a few months before the 36 month term is over.
· Coverage: COBRA gives you the same health plan you had before the divorce—same benefits, doctors, and prescriptions. The only change is who pays the bill.
· Cost: COBRA is like renting an expensive jacket. You will often pay 100% of the premium plus a 2% administrative fee. If your former spouse’s employer subsidized the cost of insurance, paying the full price may be something that you need to incorporate into your budget.
· Enrollment: You typically have 60 days from the date of your final divorce decree to elect COBRA.
While COBRA may be the right option for your family temporarily, timing matters. Once your divorce is finalized and COBRA is elected, any future changes to your coverage typically must wait until the annual open enrollment period, which usually occurs at the end of the year.
Let’s say your divorce is finalized in June. You’ll be eligible to continue COBRA coverage for up to 36 months, which means your plan would expire in June of the third year. This could lead to a gap in coverage if you are not proactive in finding a new health insurance plan. Additionally, when your coverage ends and you transition to a new plan, your deductible typically resets to $0 on the new plan. As a result, you may end up needing to meet more than one deductible in a calendar year. To avoid a coverage gap and potentially higher out of pocket costs, it could be helpful to enroll in a new plan during an open enrollment window before or during your last year of COBRA eligibility.
Option 2: Spousal Continuation Coverage
In addition to COBRA, some states offer spousal continuation coverage, a form of extended health insurance for former spouses. These provisions vary significantly by state, both in terms of eligibility and duration. For example, in Illinois, Illinois Spousal Continuation Coverage (ILSC) covers former spouses under the age of 55 for up to two years, and for those over age 55, ILSC may apply until age 65, Medicare eligibility.
To understand your state’s version of spousal continuation coverage, contact the insurance carrier for your existing group plan. Not all HR departments are familiar with these provisions, so reaching out directly can help clarify your options.
Option 3: ACA Marketplace
If your three-year COBRA term is over or you simply want to make a change to your health insurance, the Affordable Care Act (ACA) Marketplace, otherwise known as the “exchange”, could be an option for you.
The ACA requires every state to operate a health insurance marketplace or use the federal one. How you apply for coverage will depend on whether your state has their own state-run marketplace. If not, you will use the federal exchange at HealthCare.gov. Given the number of options and complexity of the healthcare landscape, it may be helpful to seek guidance from an unbiased, expert health insurance agent.
Additionally, while it is wise to start researching coverage options and costs ahead of time, keep in mind that plan details are updated annually and typically aren’t available before the first day of open enrollment. So, although early preparation can be helpful, spending too much time evaluating plans before that date may not be productive. Please note, some states have differing open enrollment timelines, so if you are using a state specific exchange, be mindful of these unique deadlines.
Impact of the One Big Beautiful Bill Act
Lastly, we’ll cover potential changes to healthcare coverage and cost under the One Big Beautiful Bill Act (OBBBA or the Act). Health Savings Accounts (HSA) are tax-advantaged vehicles that can be used for qualified medical expenses. Beginning in 2026, HSAs will be deemed compatible with bronze-level plans available in the ACA Marketplace giving more individuals the potential to benefit from these accounts. If you are unsure if you qualify, it could make sense to discuss with a financial professional. Two items that remain the same after the passage of the Act include that you can’t contribute to an HSA past age 65, and the contribution limits have not been increased aside from standard inflation adjustments.
The OBBBA also introduces significant changes to the Affordable Care Act (ACA) Marketplace, particularly affecting Premium Tax Credits. Under the Act, the enhanced tax credits, originally expanded during the COVID-19 pandemic, are set to expire at the end of 2025. This reinstates the previous eligibility rule: households must have a Modified Adjusted Gross Income (MAGI) below 400% of the Federal Poverty Level (FPL) to qualify for tax credits. For a household of two, this threshold is $84,600 in 2025. As a result, many individuals will see a substantial reduction in their tax credits, while others may lose them entirely. Combined with rising healthcare costs, this could lead to significantly higher premiums – potentially more than doubling for some enrollees. When planning for your next chapter, it is crucial to incorporate rising health care costs and understand how you will fund this potentially significant expense.
Navigating health insurance after a divorce can feel like weathering a storm, but with the right timing and knowledge, you are one step closer to finding coverage. Whether you choose COBRA for continuity, explore spousal continuation coverage in your state, or shop for a new plan through the ACA Marketplace, the key is timing and terms.
Just like choosing a winter jacket, your health insurance should offer the protection you need, at a price that makes sense, and with the flexibility to move forward confidently. If you’re unsure which path is right for you, consider speaking with a financial advisor who can help tailor your coverage to your unique situation.
Remember: Outside of qualifying events, open enrollment is your opportunity to make changes, and it only comes once a year. Mark your calendar, review your options, and take the steps needed to ensure you and your family are covered for whatever the seasons bring.