"working spouse" medical insurance penalty

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"working spouse" medical insurance penalty

Postby JDub02 » Tue Oct 14, 2008 8:20 am

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?

I would much rather put that $50/month to use paying down our student loans or saving for a house.

Thanks for listening (reading :wink: ).

J Dub
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Well

Postby rpike » Tue Oct 14, 2008 9:46 am

I had not heard of this practice, but it doesn't surprise me. I have even heard of employers who only offer insurance to the employee and not to their spouses or children.

I have had employers that let you shift the equivalent "benefit dollars" of declined health insurance into other benefits. Maybe you can make it up on that side where they are saving their contribution.

Another Rick[/b]
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Postby heidim » Tue Oct 14, 2008 10:01 am

My employer has the same policy, but at $100/month. In our case, we come out ahead paying the $100, because my husband's company policy has a premium of almost the same amount. Plus, they refund him money if he doesn't use their policy. My company's benefits are among the best in the area, so I can understand why they do this.
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Absolutely..

Postby dm200 » Tue Oct 14, 2008 10:02 am

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.
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Postby sscritic » Tue Oct 14, 2008 10:07 am

I used to work in a state university system, while my wife worked in a parallel system (same state) with a separate retirement and benefit plan. We were not allowed to cover each other, and our children had to be in one plan and not both.

I could see from the state's perspective why they didn't want to pay twice, even though if we had not been related they would have paid for our separate spouses and children.
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Postby livesoft » Tue Oct 14, 2008 10:13 am

If your spouse is not using the insurance of her employer, she should have negotiated a corresponding higher compensation to get some of the money that her employer would've paid for some of her insurance.
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Postby stratton » Tue Oct 14, 2008 11:57 am

How much does this vary by state?

In Washington whichever spouse has their birthday first in the calendar year is the "primary" insurance.

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standard practice?

Postby tibbitts » Tue Oct 14, 2008 12:39 pm

I'm guessing the standard practice today is for companies to charge the spouse and dependents at 100% of cost, with no subsidy, so under those circumstances I'd say it's not typical to have to pay an extra $50 unless it's an "administration" fee. I guess it would be less annoying if they rolled the $50 into the "cost" figure and distributed it to everyone insuring someone other than themselves.

Paul
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The Feds can trump state employment and insurance laws

Postby djw » Tue Oct 14, 2008 1:07 pm

stratton, each state generally regulates matters regarding insurance and employment practices within its own borders unless the state rules are overridden by a federal statute.

This is just one battlefront in the "states rights" debate which has been waged for about 230 years so far...

In the case of the OP, he should check with his state's dept. of insurance and dept. of employment to learn if they know his employer is doing this or not.

If they know and if it's legal, his next step is to bring it to the attention of his fellow citizens and their elected representatives. Since a lot of them are currently running for election, and controlling health care costs is certainly an issue on the table, this would be the perfect time to raise this question.

If that sounds like too much work, how about writing a letter to the editor? If you live in a small- to medium-sized town, they tend to print nearly every letter they receive so you're really not wasting your time. You never know when a small spark may ignite a forest fire (sorry, its the best metaphor I could come up with on short notice).
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I think

Postby dm200 » Tue Oct 14, 2008 1:36 pm

the rules are the same all over the US

How much does this vary by state?

In Washington whichever spouse has their birthday first in the calendar year is the "primary" insurance.


I never faced this issue, but would see this provision in various company insurance at several companies where I worked. At one point, one company tied this to male and female employees or dependents. The idea was that if all companies had the same rules, there was agreement about primary and secondary. I suppose the birthday rule was mor impartial than male/female because of the varying ratios of male and female employees by industry/company/ etc.
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Postby Nitsuj » Tue Oct 14, 2008 1:46 pm

stratton wrote:In Washington whichever spouse has their birthday first in the calendar year is the "primary" insurance.

Paul

Really? That sucks. The spouse born in January could have the worst insurance plan known to man, and the one born in December could have the best, yet they are forced to use the worst?
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NO!

Postby dm200 » Tue Oct 14, 2008 1:52 pm

Really? That sucks. The spouse born in January could have the worst insurance plan known to man, and the one born in December could have the best, yet they are forced to use the worst?


Not at all. I believe this is "coordination of benefits" so that one company (with the better insurance) doesn't get stuck paying all the bills. If someone is covered under two policies, they can still make a claim on the secondary policy for what was not paid on the first.
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Postby heidim » Tue Oct 14, 2008 2:01 pm

The OP should check and see if that $50/month applies if his wife uses her insurance as primary and his insurance as the secondary policy. My company didn't charge anything when we did that. For us, it made more sense with my husband's new company to cover him completely under my insurance and pay the fee.
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The way

Postby dm200 » Tue Oct 14, 2008 2:37 pm

I read the OP is that he chose to decline HIS comoany's insurance because HERS was better.

Perhaps the OP can clarify.
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Re: NO!

Postby Nitsuj » Tue Oct 14, 2008 2:46 pm

dm200 wrote:Not at all. I believe this is "coordination of benefits" so that one company (with the better insurance) doesn't get stuck paying all the bills. If someone is covered under two policies, they can still make a claim on the secondary policy for what was not paid on the first.
OH!

That's not quite as bad, however it is hard enough dealing with one company in between me and my healthcare providers, I can only imagine what dealing with two would be like...
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Re: The way

Postby JDub02 » Wed Oct 15, 2008 8:00 am

dm200 wrote:I read the OP is that he chose to decline HIS comoany's insurance because HERS was better.

Perhaps the OP can clarify.


Negative.

My wife declined her insurance (local school district) because my insurance offered better coverage. In return, they picked up the premium for disability (how nice of them :roll: ). And I got an extra $50/month deducted out of my paycheck in addition to the increased regular deduction for covering her (went from $72/month for just me to $152/month for both of us .. totalling $202/month with the penalty).

My biggest problem is that if she didn't work or had a job that didn't offer health insurance, I wouldn't have to pay the extra $50 for her coverage. What difference should that make? It doesn't make it any more expensive on their part.
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I will styand by my

Postby dm200 » Wed Oct 15, 2008 10:06 am

view that this is just fine.

My biggest problem is that if she didn't work or had a job that didn't offer health insurance, I wouldn't have to pay the extra $50 for her coverage. What difference should that make? It doesn't make it any more expensive on their part.


Your employer doesn't want to pay when you are giving up another benefit.
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