Employers Dropping Spousal Coverage to Avoid ObamaCare Fees

By:  Michael Tennant
02/26/2013
       
Employers Dropping Spousal Coverage to Avoid ObamaCare Fees

In a bid to save money, including new ObamaCare health-insurance fees, employers are increasingly dropping health coverage for employees' spouses.

With healthcare costs continually on the rise — a situation compounded by ObamaCare’s new taxes and regulations — employers are looking for every means possible to keep those costs down. The healthcare law requires them to offer coverage to all full-time employees and their dependent children aged 25 and younger. The one person whose coverage it does not mandate, however, is the employee’s spouse; spousal coverage, therefore, is increasingly on employers’ chopping blocks.

According to MarketWatch, since the passage of ObamaCare, companies have instituted various measures designed to discourage, if not outright exclude, individuals from obtaining health coverage via their spouses’ employers. “Such exclusions barely existed three years ago, but experts expect an increasing number of employers to adopt them,” reports Jen Wieczner.

“These ‘spousal carve-outs,’ or ‘working spouse provisions,’ generally prohibit only people who could get coverage through their own job from enrolling in their spouse’s plan,” Wieczner writes.

These provisions, which human resources firm Mercer says have already been adopted by about one-fifth of companies, take a variety of forms. Most companies simply charge extra for working spouses — $100 a month, on average. Others add such high surcharges or reimburse such a small percentage of healthcare expenses that spousal coverage becomes unaffordable. Still others flatly prohibit working-spouse coverage: Mercer claims that six percent of large employers and four percent of very large employers (20,000 or more employees) excluded spouses in 2012, up from five percent and two percent, respectively, in 2010.

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