Tuesday, December 22, 2009

Can an employer force your spouse to take their employers insurance prior to being on the others?

My husband's company it stating I have to take the insurance my employer is offering me and that I cannot refuse the insurance to go under his insurance is that legal??Can an employer force your spouse to take their employers insurance prior to being on the others?
Yes, it is legal. Someone else asked this question within the past week or so...you can do a search and review the answers to their question too.

Its not uncommon these days for an employer to require that a spouse also be enrolled on their own employer's benefit plan (if available) as primary. Often, the employer has to choose between doing that or slashing the benefit package for everyone...obviously, requiring a spouse to enroll as primary under their own plan would be better for the majority of people vs. slashing everyone's benefits.

My own employer actually has that requirement - a spouse must enroll in their own coverage, if their employer makes single coverage available to them for under $120 a month. (That spouse is still welcome to enroll in my employer's plan as secondary.)

Check the benefit plan description for the company (may also be known as summary plan document or certificate of coverage)...as long as the employer spells out the requirement in there and the same rules apply to all employees in the same classification, then it is legal.

(note - you didn't say what state you are in, so I can't speak to your state's specific laws. However, I am not specifically aware of any states that prohibit this practice off the top of my head.)

Edit to Add: I've seen some info that possibly Wisconsin prohibits this for fully insured employers, but self-insured employers can still do it. However, the employer can raise the spouse's premium. (this was some preliminary research I just did on the fly...someone in Wisconsin may be able to clarify that further)

Research the term ';spousal carve out'; or ';working spouse provision'; if you want to find out more info for your specific state.Can an employer force your spouse to take their employers insurance prior to being on the others?
Your husband's employer doesn't HAVE to offer you coverage. Their terms and conditions are spelled out in the benefits package.

As long as the rules are applied unilaterally, it's legal.

Example: MY husband's employer charges one premium for an unemployed spouse, and about three times that rate, if the spouse is employed and can get insurance through their employer.
No, it is not legal. If your husbands employer offers spouse and family coverage, then they cannot deny your coverage. You can choose to both go under his, both go under yours, or each of you select your own employers. It's almost always cheaper to both go with a single employers plan and deny coverage at the other.

Now - saying that it's not legal doesn't stop the company from making things tough on your husband. Many companies now self insure. They use a major carrier to administer their plans, but when the claims come thru, the company pays them. So, they know who is costing them money. And, they may use that to lay him off in the future (though this would never be the disclosed reason for the layoff). The company is trying to manage labor costs. If your husband costs them $75,000 in salary, and another $10,000 in 401(k) and other insurance benefits - then that $85K quickly rises to $93K for just his health insurance. Add you, and they are looking at about $97K. Add a child, and now he's costing them $100K. As you can see, you're costing the company money. If another employee is just as good, they would rather go with him if he's single. It's all in the accounting numbers. Your husband looks single if you're covered by your companies insurance plan.

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