Health Insurance for Spouses: What to Do When Both Spouses Work
Just the Essentials…
- Most employers will extend health insurance for spouses, but they’re not legally required to do so. Some employers will even refuse to cover spouses who are eligible for their own employer-offered insurance plans.
- You may enroll in your spouse’s insurance as a secondary plan, adding it to your existing coverage. However, the combined plans will never pay out more than 100% of the cost of medical treatment, and you’ll need to pay two premiums and two deductibles.
- Marriage qualifies you for Special Enrollment: consider shopping around for a family plan before committing to potentially expensive dual coverage.
How does marriage affect health insurance coverage?
Congratulations, you’ve just tied the knot! Now that you and your spouse are happily wed, the honeymoon is over, and one of you has carried the other over the threshold, it’s time to get serious and start asking the right questions. Namely: how on Earth do you sort out health insurance for spouses?
This is easy if only one of you has employer-offered insurance, but things get a bit complicated if you both do. Luckily, things aren’t as hard as they might seem.
Before we begin, note that these provisions apply specifically to legally married couples. Other forms of domestic partnership may or may not be affected by these provisions, depending on local law and the policies of your employers and insurance providers.
When are employers legally required to offer health insurance coverage?
Under the Affordable Care Act, companies that employ fifty or more people are legally obligated to offer affordable health insurance to all full-time employees and their children, with ‘affordable’ being defined as less than 10% of an employee’s household income. Failing this, they are required to offer a shared responsibility payment to help employees pay for insurance. Either way, they’re required to foot part of the bill.
However, employers are under no legal obligation to cover employees’ spouses, although many do. These days, a growing number of employers are refusing coverage to spouses who qualify for insurance from their jobs. While these employers are still in the minority, you should confirm that your spouse is eligible for coverage before moving forward with any changes.
With all of this in mind, a married couple has a few options when it comes to health insurance for spouses:
- Reject both employer plans and purchase a new plan off of the Marketplace.
- Each spouse keeps their plan with separate coverage.
- Both spouses enroll under the same employer plan, with one partner refusing coverage from their employer.
- Each spouse enrolls for coverage under their partner’s plan while keeping their own, allowing for dual coverage.
Understanding Dual Coverage
Dual Coverage refers to any situation where multiple health insurance plans cover you. In the event of a claim, both plans work together to provide coverage. No matter how many insurance plans you have, you can never receive more than 100% of the cost of treatment in benefits. This is called Coordination of Benefits, and it’s what allows dual coverage to exist in the first place.
When you dual enroll, you must designate one of your plans as primary and the other as secondary. You must file through your primary plan, but both plans can provide coverage: for instance, if one plan covers 40 percent of service and the other covers 60 percent, it is possible to avoid out-of-pocket expenses altogether. Your employer will offer your primary plan, while your secondary plan is the one you receive through your spouse.
Dual coverage is not without its drawbacks, however. First, you’re still paying for both plans: that means you’re making two premium payments and meeting two deductibles. Say, for instance, that your primary plan has a $500 deductible while your secondary plan has a $1000 deductible; because each plan is charged separately, you must meet your primary deductible before even using your secondary plan.
Fortunately, you’re unlikely to end up in a situation where one plan has a significantly higher deductible than the other, as the Affordable Care Act requires all employer-offered healthcare plans to cover at least 60% percent of the beneficiaries’ healthcare costs, including deductibles, copayments, and coinsurance. In addition, since these are family plans by definition, your partner’s payments will contribute to your family deductible. All in all, you’re likely to get some use out of your secondary plan, but you’ll need to compare the expected value to the extra premiums.
Of course, that also depends on your networks. While having two plans can often mean having a more extensive network to choose from, you can only benefit from dual coverage if the service being paid for is in-network for both plans. If the two plans have radically different networks, and you aren’t anticipating needing added flexibility, it might be better to stick with just a single plan.
Changing Your Health Insurance Plan When You Get Married
Regardless of what you choose to do, you have a bit of time to get your plans together once you’ve gotten hitched. Marriage is considered a Qualifying Life Event, meaning you are eligible for a Special Enrollment Period. This not only allows you to perform the health insurance shuffle with your partner, but also opens the opportunity to look for new plans on the Marketplace.
Depending on the plans offered by your employers and your combined finances, a Marketplace plan may be the best choice for you. Specific low deductible plans may offer more comprehensive coverage at a lower price than you would get with dual coverage. Even if you suspect that you’ll be keeping one or both of your employer-offered plans, shopping around is still worth your time.
Our licensed insurance agents can help you sort through your options. Call us today at (800) 318-9984, or enter your ZIP code to get a free quote.