If you are an employer whose health plan costs have decreased as a result of Obamacare, stop reading this and go to the next NBJ article.I have a spouse. Since the day we were married over two decades ago, I believe I have heard every joke there is about how much they can cost. However, most of us have never really thought about this.
Assuming you are still reading, you, along with every other employer, are continuously looking for ways to squeeze savings out of your plan. We cannot continue to sit back and absorb the increases we have each year.
Fact: Last year, insurance plans paid more than 35 percent more in claims per spouse compared to employees. Children and other dependents were only 50 percent of the employee cost.
Consequence: Employers nationwide, large and small, must evaluate the coverage and benefits provided to spouses. UPS did just that and decided to eliminate coverage for their 15,000 working spouses who are eligible for insurance with their own employer.
With most employers, the Affordable Care Act is increasing their premium, beyond the typical renewal, by an additional 3 to 5 percent. Therefore, changes have to be considered to offset the increases due to the law. Prohibiting coverage to working spouses also saves the employer $63 per person, per year on the Transitional Reinsurance Fee.
Rather than a spousal carve-out, as described above, other employers are implementing surcharges. The most recent Towers Watson survey shows 20 percent of the large employers surveyed adopted this strategy. Thirty-three percent are expected to do so by next year.
There are other strategies that take into consideration cost and benefits, but nothing should be considered without also evaluating: 1. Your industry and the difficulty you may have attracting employees. 2. Employer culture. 3. Employee morale.
You will know what the right thing to do is by working with your benefits adviser. The key thing is that you are provided multiple options to consider allowing you to land in the right place.