My wife and I both work for employers that offer medical insurance. The insurance that my employer offers is considerably better than the one she has available so we chose to have her insured under my plan. On the insurance selection form there is a question asking if my wife has medical insurance available to her from her employer. I answered "yes" and am now penalized $50/month as a "working spouse" penalty in addition to the regular deduction from my paycheck for the insurance. Are they allowed to do this? I understand that they are encouraging people to get health insurance elsewhere, but it doesn't seem right. Why should my wife and I be penalized when taking an offered benefit just because she has a job?
THis practice is common, and is, IMO, a good idea. In fract, you are fortunate the employer pays for the spouse at all, since most employers have gone to covering employees only.
There are similar dupication of benefits for dependent children who may be covered as dependents by both parent's plans. There is a standard industry formula (changed over the years) in deciding whos coverage must be used. This relates to dates of birth.
Look at this from the employer's point of view - you are turnig down a benefit from your employer and stiffing hers.