Employers Redefining Spousal Health Care Coverage

March 24, 2016

Covering a spouse under an employee’s health insurance plan is getting more expensive as employers seek to manage the rising cost of health benefits.

According to the 2015 Willis Towers Watson/National Business Group on Health (NBGH) Best Practices in Health Care Employer Survey, 56% of employers have increased employee contributions to health care coverage for spouses. An additional 25% plan to do so by 2018.

In addition, when an employee’s spouse has access to his or her own employer-provided coverage, more employers are using spousal surcharges; usage will more than double from 27% to 56% by 2018. These surcharges aren’t inexpensive: the average surcharge for spouses among all employers surveyed is currently $1,200 per year.

In explaining why employers are changing the terms of spousal coverage, Randall K. Abbott, senior health and benefits strategist for Willis Towers Watson, said, “Given the high cost of health care, companies no longer want their plans to be spouse magnets, which may incur thousands of dollars a year in additional health care expenses, when spouses have access to coverage through their own employers.”

Results from the survey showed that total health care cost for an employee, shared between the employer and employee, is expected to rise from $12,041 (as of 2015) nearly 5% to $12,643 (2016).

“Assessing the actual costs for spouses and determining how to best manage them can help create more efficient health care plans and avoid or reduce additional across-the-board increases in employee contributions,” said Abbott.

To read the press release announcing these and other survey results, click here.

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