Hello Peace. I'll precede my remarks by saying this is an exceptionally difficult area of the law and I could not find any real legal references to it. Most references , including Gov't ones, say talk to a lawyer. So what follows is more what I think or I've heard from others, than what is the law. Your best bet may be the web sites that I've listed at the bottom.
To deal with the kids first. To use my wife's plan as an example. My wife's plan charges about $60 per mth for single and $120 for dependent coverage, whether it's just me or me and 5 kids. If my wife and I had separated when we had children living with us it would only make sense for her to continue coverage for the children no matter who they lived with. However a judge may order me to make payment to her for part of that coverage as we have a joint responsibility to raise the children. In reality I might not be ordered to pay part of the cost, but the cost would be included in figuring out the exact mount of child support involved. All plans have a cost to them, either the employee pays the costs or if the employer pays part or all of it , then it becomes a taxable benefit.
I can't speak for all plans, but I do know that a lot of them provide spousal coverage after separation. To start with there is usually no need to inform the insurance company that you are separated.
Whether a spouse is entitled to medical benefits or not will depend on whether the spouse is entitled to spousal support and that depends on a lot of things including how long you've been married, what your income will be, what your likely hood of returning to work is, how old you are and may include a host of other things
I also know a few guys who cancelled their ex wives benefit plans out of spite and got court ordered to pay all of the ex-wife's medical expenses for a certain number of years.
Where it can get really messy is if the the person with the plan gets remarried and wants to add the new spouse to the plan. Which is all the more reason to have a professional help with the plan.
In another post you asked where you could get some free legal help. Legal aid Ontario does provide some help. Their website advises that anyone can get 20 min advice on an area of summary family law over the phone.
http://www.legalaid.on.ca/en/getting/summarylegaladvice_family.asp At the very bottom of the page it says: "There is no financial eligibility test for general information and referrals." I am guessing that they might be able to answer your question in this area, but that is only a guess.
On another page they talk about separation agreements etc and say:
"LAO covers the cost of up to 10 hours with a family lawyer to help financially eligible clients draw up a separation agreement. The spouse of a financially eligible client may also be eligible if the spouse earns up to a maximum of $50,000.
http://www.legalaid.on.ca/en/getting/separationagreement_certificates.asp "
But I cannot find out what they consider a "financially eligible client" . However you may have better luck going through the website and/or calling them. Good Luck and Take Care. paul m