Insurance coverage

Should spouses have separate health insurance coverage?

When it comes to choosing health care plans during benefits registration open, most dual-income couples probably don’t give it much thought. They could – and I mean could – spend a few moments comparing the quality and costs of their respective plans, then opt for the best plan for both of their coverages. Or they could fall back on their due diligence from years ago, just going back to whatever plan seemed best at the time.

But while covering both partners under one plan is often the path of least resistance for many couples – and can also be more cost-effective than getting separate coverage – it’s not always the right line. driving.

Some employers, especially very small ones, may not offer spousal coverage at all, especially if that spouse is eligible for coverage through their own employer. Some companies may provide coverage to spouses of married employees, but may not extend coverage to unmarried domestic partners. In either of these cases, each partner will have no choice but to fend for health insurance on their own.

Even employers who offer spousal coverage can levy “spouse surcharges” to insure spouses who also have access to their own plans. This means the cost may be lower for each partner to obtain coverage individually; alternatively, the couple can opt for coverage under the scheme which does not charge a supplement.

The health care needs of each partner may also figure into the choice, especially if one spouse has higher health care utilization than the other. The partner who has higher utilization may qualify for coverage under a gold-plated plan even though they have higher premiums which may result in lower overall expenses than opting for a plan with premiums less expensive but no more reimbursable costs. If children also have high healthcare utilization, the higher quality plan is likely to suit them as well. Meanwhile, the spouse with low healthcare spending could opt for a cheaper, leaner plan, reducing the family’s total healthcare spending.

What kind of health insurance coverage should you get during open enrollment?

If you are part of a married couple or a family going through registration open in 2022, here are some of the key questions to keep in mind when deciding whether to opt for coverage for employees only, for employees plus one or for family.

1) Compare costs between plans.

2) Understand your health care needs and the use of your health insurance policy.

3) Determine if double coverage makes sense for you and your spouse.

Compare the Costs of Health Insurance Coverage Under Different Plans: Is a Traditional PPO or HDHP Right for You?

Comparing costs between plans is a key starting point for deciding which spousal plan is best and whether to choose coverage for employee only, employee plus one, or family coverage. A complicating factor is that employers often have multiple coverage options, with larger companies more likely to offer multiple plan types than smaller ones. Sixty-four percent of workers had access to more than one type of health coverage in 2020, according to a survey by the Kaiser Family Foundation. This means that not only do couples have to compare the costs of employee-only, employee-plus-one, or family coverage in their respective plans, but they may also have to compare the costs of multiple plan types for each employer.

Preferred provider organizations and high-deductible health plans are the top two options at many large employers. Traditional PPOs generally have higher premiums but lower deductibles, while high-deductible plans, as the name suggests, have higher deductibles but lower premiums. To help you weigh the trade-offs, insert details of each plan’s premiums, deductibles, and coinsurance into a calculator designed to facilitate such comparisons.

When comparing the costs of employee-only coverage versus employee-plus-one or family coverage, it’s worth checking to see if the plans levy a spousal surcharge. This is an additional fee charged to employees whose spouses access coverage through their own employer. Imposing such fees may make it more economical for each partner to obtain coverage under their own plan. A quarter of employers collect spousal surcharges, according to a survey by Willis Towers Watson. The details of the supplements – the amount and when they apply – depend on the plan. If the spouse is unemployed or if the income of the covered employee is below a certain threshold, the increase may not apply.

Understand your health care needs and the use of your insurance policy

The next step in deciding which health care coverage to opt for is to consider the health care needs and utilization of each family member, including both spouses as well as children. Start with a rough estimate of each partner’s expected health needs for the coming year. If it is uneven and the heavy health care consumer also has better, albeit more expensive, coverage, that is a good argument for pursuing separate coverage. The person with more health care needs might opt ​​for the more comprehensive and expensive plan, while the spouse with fewer anticipated health care needs might opt ​​for less expensive and more minimal coverage with their own. employer.

Parents who share coverage can use their children’s health care needs to help determine which spousal plan covers the children. If the children have limited health care use, it may be a good idea to get lower-cost coverage through the parent with the least expensive plan. On the other hand, if parents value peace of mind, getting the kids on the best plan may be worth the extra costs.

Does dual health coverage make sense?

So far I have discussed whether spouses should be covered under a partner’s plan or each follow their own plan. But there is a separate hedging setup, called double cover, meaning that both partners purchase coverage for themselves and their spouse under their own employers’ plans. The main advantage is that the coverage is more comprehensive because each member of the family is covered by two plans. Double coverage is more expensive, of course, and that doesn’t mean that every covered person has double coverage. Instead, a single insurer, usually that of the employee Insurance— is considered the primary and the other secondary insurance. However, for people who can afford both sets of premiums, this type of coverage may be wise if very heavy health care expenses are expected in the coming year. Having dual coverage has the potential to reduce total costs in these cases.

A previous version of this article was published on October 20, 2021.