Employers are placing greater limits on how two-income families get health coverage through their jobs. It's still common for spouses to shop their respective employers' health-care plans and choose coverage through the one they find more generous.
Employers are placing greater limits on how two-income families get health coverage through their jobs.
It’s still common for spouses to shop their respective employers’ health-care plans and choose coverage through the one they find more generous. But, increasingly, employers in the private and public sectors are eliminating those options, saying spouses must get coverage through their respective employers if it’s offered.
United Parcel Service Inc. confirmed recent reports that it will no longer allow spouses of nonunion employees on the company’s health plan if those spouses can obtain coverage through their own employer. It will not increase premiums in 2014.
The package-delivery company declined to comment further, but Kaiser Health News and USA Today said last month that they obtained a UPS memo to employees that partially attributed the new policy to health-care reform, commonly called Obamacare.
About 15,000 spouses will lose UPS coverage for themselves as a result. In other cases, employees must pay a surcharge to include spouses on their health plans if those spouses can obtain coverage through their own jobs.
A survey of employers this year by Towers Watson and the National Business Group on Health found that 20 percent of respondents levy a penalty for covering the spouses of workers when other coverage for them is available, charging about $100 per month. And an additional 13 percent of respondents signaled plans to do so in 2014.
Though employers have used surcharges to defray health-care expenses for several years, interest in such fees among employers seems to be spiking, said Chrissy Knott, health and benefits practice leader in Columbus for employee-benefits consultant Mercer. In part, she said, that’s because employers are preparing for an Affordable Care Act-related fee that begins in 2014.
The fee is meant to help insurance companies pay for high-cost patients covered through the private individual insurance marketplace.
The fee is $63 per member in 2014, though it is expected to go down in 2015 and 2016 and end thereafter. “Members” include spouses in addition to employees, Knott said. That is prompting some employers to discourage spouses from staying on their health plan.
These types of changes are becoming more common in the public sector, too. This year, 34 percent of public employers in Ohio have some type of stipulation for employees whose spouses have other means of medical coverage, according to survey results reported last month by the State Employment Relations Board. That compares with 26 percent five years ago.
Most Ohio public employers who have spousal restrictions require that employee spouses use their own employer insurance as their primary form of coverage, if available, the survey found. In Perry County southeast of Columbus, county commissioners approved a policy last year barring their employees’ spouses from being on the county’s health plan if those spouses can obtain coverage through their own employers.
Spouses already on the county health plan were grandfathered in when the policy took effect in May 2012.
Of 266 Perry County employees who have health-care coverage through the county, 168 have their spouses enrolled, said Randy Ayers, who consulted with county commissioners on the policy. The county offers very good health benefits, Ayers said. Given the uncertainty associated with health-care reform, “we thought we needed to protect the plan.”
The state of Ohio charges its employees $12.50 per month if they include a spouse on the state’s health plan, regardless of whether the spouse has the option of getting coverage elsewhere.Among companies that have a surcharge:
• Nationwide in January began charging $50 more per two-week pay period for employees who enroll a spouse or household member on the company’s health plan if that spouse or household member could obtain coverage through his or her own employer.
• Express Scripts implemented a surcharge this year and plans to continue it in 2014. A spokesman would not disclose the amount.
• Kroger assesses a “working spouse fee” for spouses of salaried and certain hourly employees who could get coverage elsewhere but opt for coverage through Kroger. That fee is $200 per month, a spokeswoman said.
• American Electric Power assesses a monthly $50 surcharge per employee whose spouse could get coverage through his or her own employer. Of AEP’s 5,600 Ohio employees who have health coverage through the utility, 1,025 pay the surcharge, according to a spokeswoman.
Ohio State University, OhioHealth, Mount Carmel Health System, Nationwide Children’s Hospital, JPMorgan Chase and Franklin County told The Dispatch they don’t close their health plans to spouses of employees who can get coverage elsewhere, and they don’t assess surcharges in such cases.
The city of Columbus also does not assess surcharges, and 2014 rates won’t include them, but “it very well could be a topic that’s explored” in the future through collective bargaining, said Chet Christie, the city’s director of human resources.
In 2011, the Ohio Department of Insurance ditched a short-lived rule for businesses that purchase private health insurance for their workers instead of directly paying for the health-care coverage themselves. The rule had required those employers to extend health-care coverage to their workers’ spouses, even if those spouses could get coverage through their own jobs. Insurance departments in neighboring states and commonwealths told The Dispatch that they also do not have such policies.