Spouses and Employer Health Insurance

[Buckeye]

The health insurance provided by my employer allows for spouses and children to be covered. The monthly premium for an entire family is very reasonable for good coverage, especially considering we are a relatively small company.

At some of the larger local companies, we are starting to see them offer their employees up to $5,000 to stop taking health insurance and sign up for coverage on their spouse's policy. Basically, the employer caps its expense at $5,000 for the year and shifts the risk to the spouse's company (i.e the company I work for).

Is this a new phenomenon or has it been around awhile?

 

[youbet]

Is this a new phenomenon or has it been around awhile?

It's been around, in various forms, for some time.

 

[Buckeye]

Do companies try to add restrictions to their plans like "your spouse can't join our plan if they have the opportunity to get health insurance with their employer?" Sounds impossible to police.

 

[youbet]

It is frequently done through pricing. For example, the Megacorp I retired from charges signigicantly more than 2X for a couple vs. a single. Therefore, it's cheaper for us to have DW take a single policy from her former employer and I to be on Megacorp's retiree plan as a single than for me to have us both on Megacorp's plan as a couple. If DW didn't have the alternative of her own insurance, then I'd just have to grin and pay the inflated couple price.

 

[Buckeye]

Your Megacorp's policy is definitely easy to administer. Unfortunately it also sweeps up the folks who can't afford the "penalty" payment and who don't have access to another health plan.

 

[ziggy29]

My employer doesn't do that -- it uses a stick rather than a carrot in that it charges an extra $100 per month to cover a spouse if the spouse is covered by health insurance at their employer. Depending on the difference in the plans, that could be a small price to pay.

What you describe seems more than a bit unfair to employees who don't have spouses who have family health coverage available. Those are likely to be the people who earn less money, too, as they probably have a stay at home spouse or a spouse with a lower-paying or part-time job.