Divorce Federal Style

The belief that one in every two American marriages ends in divorce is apparently another one of those widely circulated urban myths.

According to some studies, the U.S. divorce rate peaked in 1981 and it is now the lowest since 1970. Reasons why it has dropped range from the fact that the average couple gets hitched 5 years later than in the 1970s or that more people are living together without bothering to get married.

But even if the divorce rate is dropping, a lot of people still do it every year. Before that happens, marriage counselors sometime urge each member of the couple to list the other’s best points. One of them may be that their spouse is a federal or postal worker, or a retired civil servant. What’s so great about being a fed?

Well, one of the casualties of divorce can be health insurance coverage. It can be so important that couples may separate but not divorce simply because of the health insurance factor.

For a marriage where one partner is a federal employee, Uncle Sam takes some of the sting out by permitting the nonfederal ex-spouse to stay in the federal health program. In some cases for life.

The good news for that ex-husband or former wife is that they can continue to get coverage under any of the plans in the Federal Employee Health Benefits Program. They can pick an HMO, or one of the plans that provide national coverage. That’s the good news. The bad news is once divorced, they learn how expensive health insurance really is.

In the federal program the government pays about 72 cents of every premium dollar. For postal workers (thanks to their union contracts) the government pays even more. That applies to single or family plans.

But…

Once divorced, the nonfederal spouse can stay within the FEHBP, but they must pay the full premium. There is no federal subsidy for ex-spouses.

So what does that mean?

Check out the premiums for Blue Cross-Blue Shield, the most popular plan in the FEHBP.

For a single federal worker or retiree, the annual premium is around $1020 for the basic plan, and about $1620 for Blue Cross standard. But getting the same coverage as the ex-spouse of a federal worker or retiree, the individual would pay $4070 for Blue Cross basic coverage and $5390 for the Blue Cross standard option.

Coverage for ex-spouses is guaranteed by the Spouse Equity Act provided “certain requirements” are met. To find out what those are you need to contact the federal HR office of your former federal spouse.

If the nonfederal ex-spouse does not qualify for lifetime FEHBP coverage he or she can still get TCC (temporary continuation of coverage). It entitles them to FEHBP coverage up to 18 months and coverage for dependent children (which would require purchasing a family plan) for up to 3 years (36 months). The nonfederal individual must pay the full premium, plus a 2 percent administrative fee. That’s a lot of money, but the alternative is likely to be inferior coverage (if you can get it) at an even higher nongroup rate.

For details on the Spouse Equity Act and how to use it, click here.

Nearly Useless Factoid

Maybe you can save a marriage by knowing CNN’s Six Gas Saving Myths:

• Fill your tank in the morning
• Change your air filter
• Use premium fuel
• Pump up your tires
• To A/C or not A/C
• Bolt-ons and pour-ins (devices and additives)

Remember, these are myths. Not true. They don’t work… I think I’ve figured out how to save money by only driving downhill, but pushing it back up again makes me fell like Sisyphus.

To reach me: mcausey@federalnewsradio.com

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