COBRA Qualifying Event for HDHP

[Guest Ira Hayes]

A covered dependent spouse is divorced by the employee spouse who promptly quits and obtains immediate non HDHP coverage elsewhere. What is the least the annual deductible applicable to the divorced spouse can be assuming no claims had been applied toward the family deductible in place prior to the divorce?

[J Simmons]

I think $1,100.

In the absence of IRS guidance--and I know of none--it would seem that someone that goes from family to individual status mid-deductible year ought to go to the individual rules ($1,100) with any deductible use by that individual to the date of change, albeit in the family configuration, ought to be allowed.

[jstorch]

After this initial thread was posted, IRS released Notice 2008-59, which says that if an individual switches from a family HDHP to a self-only HDHP (e.g., in a divorce), that the self-only HDHP may use "any reasonable method to allocate the covered expenses incurred during the period of family coverage for the purpose of satisfying the deductible for self-only coverage."

See Q/A 12.