Health insurance for employed spouses

[Guest Liesl]

My company currently pays 100% of premiums for employees and dependents' health insurance. Our 1999 premiums went up almost 10%. We are looking at a way to control costs without having to have the employees contribute to the premiums. We are considering not covering any spouse who has health coverage available through his/her employer. Does anyone have a policy on this subject? Has anyone had to put a policy like this in place? How was it handled? I appreciate any advice. Thanks!

[Guest kchristy]

liesl:

We have several clients that do just what you describe. First of all, check with your insurer (or your plan document, if you're self insured) to make sure that there is no eligibility clause that requires 100% of *all* employees and dependents to be enrolled in the plan. Most plans will not consider a dependent covered under a spouse's *group* plan to be "eligible", and will allow them to waive even though the plan is non-contributory.

Having made sure that you are clean with the health plan administrator, you can deal with the question of how to administer it internally. In my opinion, this can be dealth with on the enrollment form. Most ask the enrollee to provide an explanation should they waive coverage for themselves or a dependent. That should suffice for documentation.

If we were across the table from one another, I'd have a conversation with you about having employees contribute for their dependent coverage. If there are obvious "holes" in your benefit plan (no 401(k), Long Term Disability, or basic life coverage), I'd encourage you to fund those through employee contributions towards their dependent coverage. With a 125 plan, the tax savings alone could fund one of those coverages, and take the sting out of them having to kick in for their medical premium.

Good luck!

[Guest jamesfdavis]

A quick thought on the finances of what you want to do.

Under COB, you're probably the secondary payor on the people you'd be kicking out of the plan. This means they're now among the lowest cost claimants you have.

You should expect only very modest savings in your claims experience.