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Spousal-coverage shifts could have unexpected consequences

BY HBSDEALER Staff

Companies looking to pare health costs by requiring working spouses to get health insurance through their own employer may find the move has some unexpected consequences, according to a new study by the nonprofit Employee Benefit Research Institute (EBRI).

The report, "The Cost of Spousal Health Coverage," was published in the January 2014 EBRI Notes.

The Affordable Care Act (ACA) requires organizations with 50 or more full-time equivalent workers to provide health coverage to full-timers and their dependent children until they reach age 26. It does not, however, require employers to provide coverage to spouses, whether or not they are eligible for other health insurance. The EBRI analysis, which quantifies the cost of spousal health coverage, found that spouses, on average, cost more to cover than otherwise comparable enrollees — which makes them a target for employers looking to control their health benefit costs.

 

Lose some, gain some

But as some businesses adopt new rules to exclude spouses who may obtain health coverage through their own employer, they may end up inheriting new participants as other companies adopt the same rules.

“While ‘first mover’ firms may save money in the short run by eliminating working spouses from their plan, they may in time gain the responsibility for covering employees who were previously covered as a spouse under another plan, now left without that coverage by other employers implementing the same strategy of eliminating access to health coverage for their workers’ spouses,” explained report author Paul Fronstin, director of EBRI’s health research and education program. “Ultimately, savings over the long term will depend on each firm’s composition of couples and their respective employment statuses.”

 

Individual vs. family coverage

Employers subsidize employee-only coverage more than they subsidize family coverage. According to a recent Kaiser Family Foundation survey cited in the EBRI report, in 2013 employers paid 82% toward the cost of employee-only coverage and 71% toward the cost of family coverage.

Were the employer to experience a situation where a newly enrolled employee (say a worker who had previously been covered as a spouse under another employer’s plan, now refused coverage) joined the plan for each spouse that dropped off the plan, then “instead of paying $4,095 per spouse they would pay $4,453 per worker that joined the plan” (using average employer subsidies and average spending), Fronstin noted. “The strategy of not covering spouses who are employed may have unintended consequences for employers.”

Given that the spending reductions from excluding spouses could be immediate, while the long-term likelihood of higher costs when others do the same remains abstract, it’s unclear that this scenario would cause employers to reconsider limiting spousal coverage. But those who adopt such a policy should be prepared to see their short-term savings dissipate over time.

Stephen Miller, CEBS, is an online editor/manager for SHRM.

© 2013, Society for Human Resource Management.

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At Spectrum, new duties for Rouvé

BY HBSDEALER Staff

Spectrum Brands Holdings announced Andreas Rouvé has been elected to the newly created position of chief operating officer. 

Rouvé, who also remains President, International, will continue to report to Dave Lumley, president and CEO.

“Andreas has provided outstanding operating and financial leadership in Europe and, more broadly, internationally over the years,” Lumley said. “He has deep knowledge and experience with Spectrum Brands’ legacy businesses, and the strong growth we achieved in the last several years in Europe is a testimony to his skills.”

Prior to becoming president, international in January 2013, Rouvé served as Senior Vice President and Managing Director of Spectrum Brands’ European Battery and Personal Care business since 2007 and subsequently led the integration of the Home Appliances and Pet Supplies European businesses in 2010-2011. He joined Spectrum Brands in 2002 as Chief Financial Officer of the European Battery division.

Spectrum Brands include Rayovac, Kwikset, Weiser, Baldwin, National Hardware and Pfister, to name a few.

 

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