I have something unusual. A public employer wants to charge a participant a premium if the participant’s spouse has health care coverage available from the spouse’s employer and turns it down with the intent of being covered by the public employer through his spouse.

The public employer wants the participant to execute an affidavit representing the accurate employment of the spouse, and if there is any misrepresentation, understands that all benefits will be revoked and any other legal action may be taken.

This seems a little elaborate and fishy to me. How does it strike you?

There are a couple of responses to this: If the employer is on a 4-tier premium structure, the difference between family coverage and employee w/children could be as high as $250/mo. difference. We do not allow a spouse to participate on our coverage if they are ELIGIBLE for coverage under their employer. The employee signs an "affidavit" saying their spouse is not eligible for coverage and if they lie, they are responsible for the repayment of any claims for that spouse. I have heard of other employers charging a "penalty" for spouses that are eligible for coverage elsewhere but are waiving. Not fishy at all to me.

We are a company of about 12,000 employees. Our benefits package includes a spousal surcharge that only applies when an employee has a spouse with employer sponsored group health available and, chooses to add the spouse to his or her plan. No affidavits or anything like that, but we will be conducting a dependent eligibility audit in 2010. This practice is not an unusual policy as we are seeing more and more of our clients adopting similar policies.

Can this "problem" be minimized by specifying that the employee's plan is secondary to the spouse's plan?

How would that be accomplished? Don't plans usually specify that the employers plan is primary? You would have a conflict in the coordination of benefits if one plan says it should be primary and the other secondary. Then you would have two plans trying to pay secondary only and that sounds like a real mess.

I agree that it might be difficult to adminisiter.
Plan specifies that a dependent can be covered but the dependent's plan pays first. IF the employee is paying for the dependent coverage, then the cost/benefit ratio of buying dependent coverage looks pretty bad. Or have I missed something?