Health Insurance After the Death of a Spouse, Parent or Other Plan Member

After the death of a family member: What you need to know about health insurance

The death of a spouse or other family member can have a substantial effect on the future of your health insurance coverage.  If you are covered under your loved one’s plan, you’ll need to take steps to ensure continued coverage or obtain alternative coverage. If your loved one was covered under your plan, you may also need to make some alterations.

What you need to do depends on what type of insurance you have. Here’s a look at the common scenarios people face in this situation.

When you are covered by your loved one’s insurance

Employer-sponsored insurance

Often spouses, partners and children up to 26 years old are covered on a health care plan administered by an employer.  When the employee dies, dependent coverage will end, usually after some type of grace period. It’s important to contact the human resources department of your loved one’s employer to determine how long your coverage will continue under the plan and what options you may have.

With most employer-sponsored plans, surviving dependents have the option of COBRA coverage.¹ This program, which gets its name from The Consolidated Omnibus Budget Reconciliation Act, allows dependents covered under the employer-sponsored health plan  to extend current coverage for up to 36 months. Most employers with 20 or more full-time employees offer COBRA for spouses and dependent children covered under the employer plan. You typically have 60 days from the day your loved one died to sign up.

But COBRA is expensive. You’ll be paying the full premium cost, including the portion of the premium the employer was paying. Considering most employers pay about 80% of the $7,440 average annual premium for individuals, according to data from the Kaiser Family Foundation, you’ll likely see a dramatic increase in premium costs. Plus you may be responsible for an additional 2% of the total premium, which represents administrative costs the employer previously paid.

That said, some family members may find they can’t afford not to pay for the high cost of COBRA. That’s because coverage will remain the same as it was when the employee was alive. People who are in the middle of an expensive course of treatment and have already satisfied their deductible or who need to keep their existing network of providers may find COBRA is the best choice.  

ACA Exchange-based plans

The loss of a spouse is a qualifying event that can trigger the special enrollment period for exchange-based plans² under the Affordable Care Act. Losing employer-sponsored insurance from your spouse allows you to sign up for an exchange plan within 60 days without having to wait for the annual open enrollment period at the end of the year.

The special enrollment period also applies if you already have an exchange-based plan. You may find with the loss of your loved one, you will want different coverage under an alternate ACA plan. Or, if your loss also includes a reduction in family income, you may qualify for government-sponsored premium subsidies or cost-sharing programs available for exchange plan members. You can find your state’s exchange options and if you are eligible for cost assistance at Healthcare.gov.

When your plan covers a deceased family member

If your loved one was covered on your employer-sponsored insurance or another private insurance plan, you’ll want to notify your employer’s human resources department or your health insurer, respectively, as soon as possible. Your premium and other costs may change as a result of losing a dependent on the plan.

If you included your loved one on an exchanged-based plan, you are also eligible for the special enrollment period to change plans if necessary. As discussed above, you may find if you are experiencing a loss of family income you may qualify for government-sponsored cost assistance.³

Considerations for retirees

If your loved one was covered by Medicare you’re likely already aware that each Medicare recipient has individual coverage through the program. There is no dependent coverage. The same is true with Medigap coverage. You’ll want to inform both of your loss, however, so premium and other billing for coverage stops.

If you received health care benefits as part of your spouse’s retirement package from a former employer, your coverage may be affected. It is up to the plan to set guidelines for coverage of surviving spouses. Check with the plan administrator for details.