Choosing Health Insurance After Divorce
Health insurance after divorce can feel like shopping for a new winter coat. Here’s how to look for comfort, protection and value this open enrollment season.
As winter approaches, so does the annual window to sign up for, renew or change your health insurance plan. In 2025, open enrollment runs from November 1, 2025, through January 16, 2026. If you are making coverage decisions for the first time after a divorce or simply reassessing your options heading into a new year, this guide is designed to help you do so with clarity.
A change in marital status, such as divorce, is considered a “qualifying life event,” which opens a special window to enroll in or adjust your health insurance plan outside of the standard open enrollment period. If you are not experiencing a qualifying event, open enrollment is your opportunity to review options and make changes. For those nearing age 65, it is also worth noting that Medicare has its own rules and enrollment timelines, and there are dedicated resources available to help evaluate Medicare choices separately.
To make the insurance conversation more tangible, consider the analogy of choosing a winter jacket. You want protection, comfort and value, and when life changes suddenly, losing access to a former spouse’s employer coverage can feel like losing the familiar jacket you have worn for years. Fortunately, there are good options available to help you stay covered.
COBRA: A temporary extension of familiar coverage
For many people, the first option offered after divorce is COBRA, short for the “Consolidated Omnibus Budget Reconciliation Act”. COBRA allows you to continue employer-sponsored coverage temporarily so that you don’t need to rush into an immediate change during an already emotional transition. The key trade-off is cost: While the coverage remains the same, including the same providers, network, and prescription benefits, you typically pay the full premium plus a small administrative fee. If your former spouse’s employer previously subsidized the cost, this difference can be meaningful.
COBRA coverage tied to divorce can generally last up to 36 months, and dependents under age 26 can often be covered as well. You usually have 60 days from the date of your divorce decree to elect COBRA. Timing matters, though. If your divorce is finalized midyear, your COBRA period will also end mid-year three years later, likely requiring you to select new coverage outside your deductible cycle. That can mean restarting a deductible in the same calendar year. To avoid gaps in coverage and unexpected costs, consider beginning your search for a replacement plan during an open enrollment period before COBRA expires.
State spousal continuation coverage
In addition to COBRA, certain states offer spousal continuation coverage, which allows former spouses to remain on group health plans for a period of time. Rules vary significantly by state. For example, Illinois offers coverage for up to two years for former spouses under age 55 and until Medicare eligibility for those over 55. Not all employers are familiar with these rules, so it can be helpful to contact the insurance carrier directly to understand your options.
The ACA Marketplace
Some individuals choose to enroll in health insurance through the Affordable Care Act (ACA) Marketplace, also known as the exchange. Each state either operates its own marketplace or uses the federal exchange at HealthCare.gov. Marketplace plans are updated annually, and while researching in advance is helpful, the specific plan details are typically not available until the first day of open enrollment. Because plan choices and subsidy rules can be complex, many people benefit from working with a knowledgeable and unbiased insurance professional.
Future changes under the “One Big Beautiful Bill Act”
The “One Big Beautiful Bill Act” (OBBBA) introduces several notable changes beginning in 2026. Health Savings Accounts (HSAs) will become compatible with bronze-tier ACA plans, expanding HSA eligibility for individuals who purchase coverage through the Marketplace. Contribution rules remain unchanged aside from typical inflation adjustments, and contributions still cannot be made past age 65.
The Act also affects ACA premium tax credits. Pandemic-era enhanced subsidies are set to expire at the end of 2025, reverting to previous eligibility rules requiring modified adjusted gross income below 400% of the federal poverty level to qualify. For a two-person household, this is $84,600 in 2025. As the enhanced subsidies sunset, many people will see reduced tax credits or lose eligibility entirely, which may result in higher premiums. As you plan for the future, consider incorporating potential increases in healthcare costs into your long-term budget.
Moving forward
Navigating health insurance decisions after divorce can feel like weathering a winter storm. But with clarity, timing and the right support, you can move forward confidently. Whether you continue coverage temporarily through COBRA, rely on state continuation rules, or explore the ACA Marketplace, your goal is the same: reliable protection, at a cost that fits, with the flexibility to support your next chapter.
Just as you would with a winter jacket, choose coverage that fits your needs today and prepares you for tomorrow. If you are unsure where to begin or how to evaluate your choices, a Corient Wealth Advisor can help you review your options, understand costs, and integrate healthcare decisions into your broader financial plan.
ABOUT THE AUTHOR
Baili Roy
Baili is a Wealth Advisor in our Chicago office and a leader of the National Divorce Practice Group (DPG). Her work with the DPG focuses on helping prospects and clients navigate the complexities of divorce, as well as facilitating heathy conversations about money pre and post marriage, with blended families, second marriages, and more. Previously, she served as a senior advisor at legacy firm Balasa Dinverno Foltz. Baili completed her Bachelor of Science at the University of Illinois at Urbana Champaign with a concentration in financial planning. She holds a CERTIFIED FINANCIAL PLANNER® designation and is a Certified Divorce Financial Analyst® professional.
Anna Schermerhorn
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4971445 – November 2025
