Spousal Carve-Outs & Surcharges

Employers looking to lower their health plan costs have considered some strategies to reduce the number of participants. Among these strategies are spousal surcharges and carve-outs, which either impose an additional or increased employee contribution or restrict eligibility for spouses with access to a health plan through their employer. A more aggressive approach excludes spouses from enrolling in the plan altogether. These designs are also known as “working spouse provisions.” When one of these strategies is implemented, employers ultimately pay less in premiums (or claims for self-funded plans) than they would have if the spouses were enrolled. Employers considering one of these strategies must first consider the specific eligibility strategy they want to implement and the various federal and state law implications.

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