Dodging spousal health coverage policies may hurt employers

Employers looking to avoid expensive spousal health coverage may be tipping the bill for more employees under their respective health care offerings as the uncovered married population opts in, a new study says.

The Employee Benefit Research Institute finds that spouses will begin to take up their own health care policies with their employers, which should worry benefit professionals. The Washington, D.C.-based nonpartisan organization says that the ACA may be to blame.

Under the ACA, employers with 50 or more employees are required to provide health coverage to workers and dependent children until they reach 26. There is no reference to spousal coverage and does not take into consideration whether these partners have access to health care.

On average, spousal coverage is said to cost more than other policy holders. The EBRI report states that this impetus to clear up benefit costs may be having some “unexpected cost consequences.”

“While ‘first-mover’ firms may save money in the short run by eliminating working spouses from their plan, they may in time gain the responsibility for covering employees who were previously covered as a spouse under another plan, now left without that coverage by other employers implementing the same strategy of eliminating access to health coverage for their workers’ spouses,” says Paul Fronstin, director of EBRI’s Health Research and Education Program. 

According to EBRI’s figures, primary policyholders spent an average of $5,430 on health care services and $6,609 for spouses in 2011. Should these new policy holders join subsidized plans at their current employers, the average employee-only coverage per spouse would increase from around $4,095 to $4,453 for employers.

“Ultimately, savings over the long term will depend upon each firm’s composition of couples and their respective employment statuses,” Fronstin adds. The EBRI study explains that working spouses will “likely have lower spending than non-working spouses,” which could be a possible avenue for employers to consider.

EBRI researchers also expect that “employers with net reductions in covered spouses may therefore witness a worsening in average risk, resulting in higher spending than expected.”