Do Separated Couples Have to Be on the Same Insurance?
A legal separation is a method of separating marital assets popular with spouses of deep religious beliefs who wish to avoid a formal divorce. A legal separation carries all the same rules for division of assets, including separation of insurance policies and orders for support.
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Legal Separation Definition
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A legal separation functions in the same way as a divorce according to the laws in a given state with one major exception: the marriage does not legally end. This means spouses cannot legally remarry, but may live apart and conduct affairs separately. The court may also divide property, assign child custody and assess each spouse's finances to establish spousal and child support payments in accordance with the particular state's divorce laws.
Health Insurance Rules
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Because a legal separation is a divorce in legal aspects relating to rights and responsibilities, each spouse must obtain individual health insurance. Current insurers will require each spouse to remove the other from any existing insurance policies, though eligible dependent children from the marriage may remain. If a spouse has health insurance through an employer-provided plan, the spouse's employer must receive notice of the separation to make coverage adjustments per health plan rules. The spouse losing health insurance might be eligible for COBRA-continued insurance coverage for up to 18 months. The spouse losing coverage is responsible for paying 100 percent of the premium for continuing coverage using the federal COBRA program.
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Auto Insurance Requirements
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The spouse receiving possession of automobiles from the marriage must insure the vehicles per auto insurance laws in the state. Because the court legally separates the couple along with all financial responsibilities, each spouse can no longer remain as an eligible driver on unowned vehicles. This is also the case because the couple no longer shares the same address, and insurance companies must adjust monthly premiums based on location and anticipated use of each vehicle. It is the duty of each spouse to inform auto insurance companies of the legal separation so the insurer can make appropriate policy adjustments.
Life Insurance Distribution
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The court presiding over a couple's legal separation can consider a life insurance policy as an asset of the marriage. This means the court may divide the life insurance policy between each spouse in as equitable a manner as possible based on how much each spouse paid into the policy over its life. Alternatively, the court may divide the life insurance policy equally between both spouses with each spouse able to name a beneficiary for half of the policy's total value.
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