Employer Rules for Dependent Eligibility

[Guest khiggins]

I just had an employer inquire about establishing different employer

contribution schedules for working dependent spouses that are eligible for

group coverage at their place of employment compared to non-working spouses.

This employer wants to eliminate spouses being covered by two employers.

The thought is that employer contributions for working spouses with access

to health coverage through their employer would be eliminated while

contributions for non-working spouses would continue.

Does anyone have any experience with this arrangement? Is it legal? If yes,

how would one go about setting this up correctly?

Any other suggestions apart from changing the dependent contribution levels

for all dependents?

Thanks,

Kevin Higgins

[mroberts]

It is legal, but the problem with this kind of arrangement always comes down to how you are going to enforce it. There's obviously a lot more administration involved trying to verify whether a spouse is working and if he or she's offered healthcare coverage at his or her place of employment. It's all about opportunity cost.

Additionally, the real reason employers are trying to enforce this isn't really to make sure spouses aren't doubled covered, but to kick them off their plan if possible to lower health insurance premiums. I see the point, however, what do you do if the spouse is offered health insurance and the employer doesn't pay for it, pays very little for it, has a poor plan design, has a carrier with a bad network.....? I don't like this idea too much. Having a good medical plan will only help attract and retain good workers, so I'm not a believer in hacking away at a company's health care benefits. I do understand the employer's perspective, but sometimes you have to look at the "soft costs" along with the "hard costs".