The Spousal Coverage Problem
When both spouses work and have access to employer-sponsored coverage, one spouse may enroll in the other's plan to get richer coverage or lower cost-sharing. This "double coverage" is expensive for the employer whose plan is being used as secondary coverage. Spousal surcharges and working spouse rules address this problem.
Spousal Surcharge vs. Working Spouse Exclusion
| Approach | How It Works | Employee Impact | Employer Savings |
|---|---|---|---|
| Spousal surcharge | Additional monthly premium if spouse has other coverage | Pays more; can still enroll spouse | Moderate; reduces adverse selection |
| Working spouse exclusion | Spouse excluded from coverage if they have other coverage | Cannot enroll spouse; must use other coverage | Higher; eliminates double coverage |
Implementation Considerations
Watch Out
Spousal surcharges and working spouse rules require annual attestation from employees — and the attestation must be verified. Employees who falsely attest that their spouse does not have other coverage to avoid the surcharge are committing benefits fraud. Implement a verification process and communicate the consequences of false attestation clearly.