One of the major issues couples face when they are ending their marriage is continuation of health insurance coverage. People who receive coverage through their spouse’s employer worry that they will lose that coverage when the marriage ends. While the federal Affordable Care Act has improved access, insurance purchased privately remains expensive.
Wisconsin law and practice on this issue have changed in recent years; as a result, misconceptions abound.
Years ago, most employer-provided health insurance policies provided for termination of a spouse’s coverage upon divorce, but made no mention of legal separation. Since legal separation is identical in most relevant respects to divorce (see Divorce and Legal Separation), many couples retained health insurance for both spouses by opting for legal separation instead of divorce.
Over time, employers began to close the legal-separation loophole by adding legal separation to the list of events triggering termination of spousal coverage.
Then Wisconsin enacted Section 632.897(2)(a) of the Wisconsin Statutes: “No group policy which provides coverage to the spouse of a group member may contain a provision for termination of coverage for the spouse solely as a result of a break in their marital relationship except by reason of the entry of a judgment of divorce or annulment of their marriage.”
In other words, spouses who choose legal separation rather than divorce may once again retain coverage for both.