Different premium rates for family coverage if spouse has alternative

[Guest Paul]

I am starting to see employers wanting to charge more for family coverage if the spouse has alternative coverage available. For example, say single coverage is $ 100 per month and family coverage is $ 200. However, if your spouse has other coverage available but you want to still elect family coverage, it is going to cost you $ 225 per month rather than the "normal" family rate of $ 200 per month.

I think you can do it because (1) it does not discriminate on sex, age, health status, etc and (2) the J.C. Penny case upheld "head of household coverage." So it seems this should be OK. Also, I do not think it is an eligiblity issue so the carrier really should not have any say assuming you satisfy the participation standards.

Any thoughts?

[KIP KRAUS]

Paul:

In the J.C. Penny case didn’t J.C. Penny require spouses of employees to have coverage at their place of employment in order for the J.C. Penny employee to have spousal coverage?

My thoughts are that if a dependent spouse has coverage at his/her place of employment, the family premium should be less because of COB, not more. There are two ways this could save the employer in claims: 1. The dependent spouse’s employer’s plan would be the primary payer for the dependent spouse’s medical claims, and 2. If the dependent spouse’s birth date falls first in the calendar year any dependent children’s claims would be primary under the dependent spouse’s plan. Charging more in your situation doesn’t make sense to me.

I agree that what you are saying should be considered non-discriminatory for all classes affected.