Many couples and families prefer to keep everyone on the same health insurance plans to simplify their paperwork, streamline bills, and ensure that everyone in the family can see the same doctors without going out of network. Because spouses are not considered dependents by the IRS, you are not required to extend coverage to spouses of your employees. You can, however, choose to extend coverage as an extra benefit to attract talent or to improve employee morale. Here are some of the main things to know about covering spouses.
Can I pay less into the premiums for the spouse than for the employee?
Yes. Because the ACA does not require that you cover spouses, there are no regulations about much you must pay for their health coverage. However, while some health insurance plans might allow the employer to pay less for a spouse, other plans might not. To compensate for extra costs, some employers directly charge the employee for the added spouse, and others impose a yearly fee.
If I do offer coverage to spouses, can I require them to pay a higher portion of the premium than my employees do?
Yes. Although the coverage for your employees themselves must fall within the 9.5 percent affordability range, there are no similar rules for spouse coverage. Some insurance plans will not allow you to set different rates, so some employers charge an additional fee for covering a spouse. This is allowed under the ACA.
Can I drop coverage for employee spouses who have access to plans through their own employer?
Yes. The ACA allows you to provide health benefits just to the spouses who don’t have any other offers of coverage.
If I offer coverage to spouses, must I also offer coverage to domestic partners?
No. You can offer coverage to spouses only. However, beginning in 2015, if you offer coverage to opposite-sex spouses, you will have to offer coverage to same-sex spouses as well, according to HealthCare.gov.
How could an employee’s marital status affect me?
In order for your insurance plan to be considered affordable under the ACA, the employee’s share of the premium for himself or herself must cost less than 9.5 percent of their household income, according to The New York Times blog. If you have low-wage, full-time employees and your health plan costs more than 9.5 percent of their household incomes, you could be penalized.
However, when those low-wage employees marry or register a domestic partnership, their household income may increase based on the spouse’s or partner’s income. A newly married employee could mean a reduced penalty for you. Keep in mind, however, that the reverse is also true. If a married employee’s spouse loses a job or the employee divorces, then the household income drops. Your health plan could suddenly cost your employee more than 9.5 percent of household income, leading to a penalty for your company.
This content is provided solely for informational purposes. It is not intended as and does not constitute legal advice. The information contained herein should not be relied upon or used as a substitute for consultation with legal, accounting, tax and/or other professional advisers.
Dylan Murray has an MBA from San Diego State University and a bachelor’s degree in communication from Boston University. He is a licensed insurance agent in California, but he works as a professional researcher and writer reporting on business trends in estate law, insurance and private security. Dylan has worked as a script analyst with the Sundance Institute and the Scriptwriters Network in Los Angeles. He lives in San Diego, California, and Marseille, France.