Stephanie Dwilson

Should You Consider a Spousal Surcharge?

Between attracting top talent and keeping your employees in good health, making sure your workforce has solid insurance is vital to the success of your business — but it comes at a price. And when you add spouses into the mix, you might see those dollar signs multiply. Some employers have responded by barring spouses from joining employee health plans, but doing so can come at its own cost, potentially alienating married members of your workforce.

If you’re eyeing your health care expenses and considering a new strategy for spouses, introducing a spousal surcharge could offer a workable compromise, allowing employees to share coverage with their partners without blowing a hole in your company’s budget.

Spousal Surcharge Trends

According to Anthem’s Trends in Health Benefits 2018 report, most employers — both large and small — still offer health benefits to spouses and dependents. But a growing number are changing how they factor spouses into their benefits offerings.

The 2018 International Foundation of Employee Benefits Survey found that, up from 16 percent in 2016, just over 20 percent of employers now either charge employees more to add a spouse to their health plan or exclude spouses entirely.

For example, a spouse may be charged an extra fee, say $100 a month, if they want your company’s insurance. Some only charge or exclude spouses who have coverage available elsewhere, while others have blanket policies for all spouses.

Reasons for Implementing a Spousal Surcharge

Should your business create similar boundaries around spousal health insurance coverage? Some employers take these measures because of rising health care costs. They still want to offer good medical coverage, but the expense pushes them to decrease the number of spouses signing up for coverage if they have other viable options.

There are other ways, of course, that employers can attempt to offset rising health care costs, such as offering high-deductible plans. But sometimes that’s not enough, and the most cost-effective option is still to reduce — or at least change — spousal coverage. In those cases, it might be a good option to implement surcharges. Sometimes the charges are necessary in order to to keep premium increases as low as possible.

How to Communicate Changes

If you decide to implement boundaries to spousal benefits, you’ll need to communicate these changes clearly to your staff without alarming them unnecessarily. The best approach is just to be transparent and honest about why you’re making this change. Explain that you want to offer good insurance while keeping premiums low, and that you must implement the surcharge in order to continue offering affordable insurance to those who need it the most.

While you should communicate this first in writing, offer employees a chance to meet one-on-one to ask questions. Make sure to communicate the change far enough in advance that each of your staff members has time to research their spouse’s insurance options. In some cases, it might be helpful to hire a third-party company to run a verification process for everyone currently on your plan.

To keep morale up and express goodwill, consider including exceptions when you implement the surcharges rather than charging all spouses across the board. Exceptions can include spouses who don’t have access to insurance anywhere else, spouses eligible for Medicare and spouses whose employer’s plan doesn’t meet specific standards.

Keeping health care costs down isn’t always easy for employers or employees. When you seem to be stuck between cutting spouses out of your benefits offerings and putting your business’s bottom line at risk, the middle ground may be the best place to land.

Health care is constantly changing. Stay on the cutting edge of the industry and learn how to control health care costs for your small business by reading Anthem’s Trends in Health Benefits 2018 report.