why wouldn't you live together or get married. It seems like that would have saved a tremendous amount of trouble. he would have never needed high cobra benefits and you would have had only the one housing cost instead of 2.
$900 for 3 kids is pretty cheap for a skilled worker job. What state and county are you in? What were the grounds for dismissal.
Has he tried filling for disability are state aid. With a household of 8 I would think you would qualify for some type of assistance.