How to handle health insurance after the death of a spouse

It’s hard to think about much of anything when you’re grieving. But if you were covered by a loved one’s health insurance plan, you may want to start thinking about alternative health insurance options quickly.

In many cases, you will need to find a new plan just 60 days after the death of a loved one to be sure you stayed covered. "So, you need to look for another private insurance plan, COBRA, or an Affordable Care ACT (ACA) Marketplace plan during this period.¹

“Unfortunately, those 60 days go by quickly. So the earlier you can organize, the better,” says Caitlin Donovan, a spokesperson for the National Patient Advocate Foundation.

Here are some steps you may want to take to keep yourself and any dependents insured. And what to do if your loved one was covered under your insurance plan.

When a loved one dies, that’s considered a qualifying life event in the insurance world. It gives you a chance to change your existing insurance policy or enroll in a new one.

If you were covered by your spouse’s insurance plan, either through their work or a private plan, call the company HR department or the plan’s insurer as soon as possible. Ask how long you’ll be covered by the plan and what options are available to you.

If the plan is through a company with more than 20 employees, the company is required to offer COBRA insurance coverage. Named after the Consolidated Omnibus Budget Reconciliation Act, COBRA allows you and any dependents to keep the same insurance benefits for up to 36 months.²

Here’s the downside: COBRA plans can be expensive. That’s because your spouse’s employer will most likely stop contributing toward the premium. That means you’ll be responsible for 100% of the cost.³ In 2021, the average yearly cost of employer-sponsored health insurance was $7,739. That means you would pay roughly $645 per month for an individual, according to the Kaiser Family Foundation.⁴ For a family, the estimated monthly cost would be $1,852. Those estimates don’t include the 2% monthly administrative fee.

A COBRA plan might make sense in the short term if you’re close to — or have already hit — the plan’s annual deductible or out-of-pocket maximum, Donovan says.

If you’re employed and your company offers employer-sponsored health insurance, check it out as soon as you can. It’ll likely be your most affordable option. 

“See if the cost of the lowest-price plan for you alone is less than 8.17% of your income. If so, you should enroll in employer-offered coverage,” says Marina Kurakin, a senior legal advocate and health insurance specialist for Legal Council for Health Justice, a Chicago-based organization that works to decrease health disparities in underserved communities.

That number will creep up a bit in 2023. According to healthcare.gov, a job-based health plan is considered “affordable” if your share of the monthly premium in the lowest-cost plan offered by the employer is less than 9.12% of your household income (that’s based on the premium for self-only — individual — coverage).⁵ If you’re offered employer-based coverage through a household member’s job, affordability is based on the premium amount to cover everyone in the household (total household income includes earnings from everybody in the household who’s required to file a tax return).

If employer-offered coverage isn’t a possibility, consider shopping around for private plans through insurance brokers. These plans are often cheaper than COBRA. But it’s not always guaranteed that they’ll cover your needs, Kurakin adds.

If employee-sponsored insurance isn’t an option or is too expensive, and you don’t qualify for Medicaid or Medicare (more on that below), your best bet may be an ACA Marketplace insurance plan, Kurakin says.

As with employer-sponsored insurance, the loss of a loved one triggers a special 60-day enrollment period, when you can sign up for a plan through the ACA Marketplace. (See UnitedHealthcare Individual and Family ACA Marketplace plan options.)

The cost of your monthly premium will depend on factors such as your age, projected household taxable income and location. “Generally, the older you are, or the higher your household income, the higher your premiums,” Kurakin says. ACA plans should be less expensive than COBRA insurance because of the subsidies (tax credits based on your income level). And there’s a cap of 8% of your income going toward premiums, Donovan says.

If you and your spouse had a family marketplace plan, update the marketplace about your loved one’s death and any changes in your financial situation. Your income determines the size of the tax credits you get toward your marketplace insurance premiums, Kurakin says.

Medicaid is a joint federal-state health insurance program for people with low incomes. Even if you didn’t qualify for Medicaid in the past, you might now with the death of your spouse. See if you qualify.

Medicare is available to adults age 65 or older of any income level who have paid Medicare taxes for at least 10 years (or whose spouse did).⁶ Get help navigating Medicare plans.

If your loved one was on your insurance plan — whether it’s work-sponsored, private, marketplace, Medicare or Medicaid — let the HR department or the insurer know of their death. That might change your monthly premium.

Seek out the help of an expert to navigate your options. That could include:

• An HR representative at your company or your spouse’s company
• Your state’s Department of Human Services 
• A health benefits broker
• A local nonprofit that helps people with insurance issues

“Trying to understand your health insurance options under normal circumstances is hard enough. It’s even more difficult when you’re grieving the passing of a loved one,” Kurakin says. “An expert can help you determine which health insurance system you belong in. They can also lay out how to report your household changes and make sure you sign up on time.”