# Insurance question **URL:** \ **Category:** Factual Questions\ **Created:** [February 25, 2006, 8:59pm UTC](https://boards.straightdope.com/t/insurance-question/346101 "2006-02-25T20:59:15Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [February 25, 2006, 8:59pm UTC](https://boards.straightdope.com/t/insurance-question/346101/1 "2006-02-25T20:59:15Z")
Is it common for companies to make a rule like this: 1. Husband works at Spacely Sprockets which has a good, cheap medical plan where the company contributes a lot. 2. Wife works at Cogswell Cogs which has a bad, expensive medical plan where the company contributes very little. 3. If wife declines Cogswell Cogs plan and chooses to go on Spacely, then Spacely will charge a $200/month penalty for her to be primary on the Spacely plan. This is the way the situation is being presented to me, and I’ve never heard of such a thing. Is this common? I ask Dopers because sometimes HR people tend to be a bit biased and have a habit of giving the easiest answer that will cost the company the least money. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 25, 2006, 9:32pm UTC](https://boards.straightdope.com/t/insurance-question/346101/2 "2006-02-25T21:32:13Z")
> [@](#): > > $200/month penalty They call it a penalty? Or is that your interpretation? ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [February 25, 2006, 9:36pm UTC](https://boards.straightdope.com/t/insurance-question/346101/3 "2006-02-25T21:36:58Z")
> [@Gfactor](#): > > They call it a penalty? Or is that your interpretation? That’s my interpretation. If the cost to insure an unemployed spouse is a monthly premium but they charge $200 if they get a job which offers them a medical plan so crappy that they have to decline it, that to me is clearly a penalty. But anyway, that’s a matter of opinion. My question is whether this is a common situation, or maybe the rule is being misinterpreted, or the company is just plain evil. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 25, 2006, 10:10pm UTC](https://boards.straightdope.com/t/insurance-question/346101/4 "2006-02-25T22:10:56Z")
> [@Brain Wreck](#): > > That’s my interpretation. If the cost to insure an unemployed spouse is a monthly premium but they charge $200 if they get a job which offers them a medical plan so crappy that they have to decline it, that to me is clearly a penalty. But anyway, that’s a matter of opinion. My question is whether this is a common situation, or maybe the rule is being misinterpreted, or the company is just plain evil. I’ve seen situations where an employer will offer dependent coverage for you spouse and pay the additional premium (or a portion of it), but not do so if the spouse has insurance available from the spouse’s employment, especially if the spouse declines coverage. ---
**Author:** ![RealityChuck](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/realitychuck/32/195_2.png) [@RealityChuck](https://boards.straightdope.com/u/RealityChuck)\ **Post date:** [February 26, 2006, 12:38am UTC](https://boards.straightdope.com/t/insurance-question/346101/5 "2006-02-26T00:38:34Z")
Many employers pay the cost of individual medical coverage. For families and spouses, the employee is required to pay the difference. Thus if single coverage is $100 a month (I’m making up numbers here) and family coverage is $400 (not unusual for family coverage), then you have to pay the $300 difference. In the past decade, they have come up with couples coverage, which is about twice single coverage, but less than family. That sounds like what you need to get: make sure they aren’t charging you for family coverage (assuming they offer two-person coverage). It’s a bad deal for married employees, but not uncommon. ---
**Author:** ![Shagnasty](https://avatars.discourse-cdn.com/v4/letter/s/9dc877/32.png) [@Shagnasty](https://boards.straightdope.com/u/Shagnasty)\ **Post date:** [February 26, 2006, 12:44am UTC](https://boards.straightdope.com/t/insurance-question/346101/6 "2006-02-26T00:44:31Z")
> [@Brain Wreck](#): > > This is the way the situation is being presented to me, and I’ve never heard of such a thing. Is this common? I ask Dopers because sometimes HR people tend to be a bit biased and have a habit of giving the easiest answer that will cost the company the least money. I don’t know where the “biased” and “costs the employer the least bit of money” comes in. Health insurance is merely a perk in most of the U.S. and the plan is what it is. They undoubtedly did this to save money which is what businesses tend to do. I won’t say that it is common (I work in benefits systems working for lots of large companies) but it isn’t unheard of. It seems pretty straightforward to me. They set a policy that could save them $$$. It is possible that your jurisdiction has a law against their policy but I wouldn’t count on it. I would also guess that the $200 rate is subsidized to some degree unless it is a crappy plan. ---
**Author:** ![AuntiePam](https://avatars.discourse-cdn.com/v4/letter/a/f19dbf/32.png) [@AuntiePam](https://boards.straightdope.com/u/AuntiePam)\ **Post date:** [February 26, 2006, 2:11am UTC](https://boards.straightdope.com/t/insurance-question/346101/7 "2006-02-26T02:11:15Z")
That’s how it was at the last place I worked. If your spouse was employed but declined his/her own coverage to be on your plan, you paid extra ($50 a month). ---
**Author:** ![racer72](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/racer72/32/3075_2.png) [@racer72](https://boards.straightdope.com/u/racer72)\ **Post date:** [February 26, 2006, 3:53am UTC](https://boards.straightdope.com/t/insurance-question/346101/8 "2006-02-26T03:53:33Z")
Costs an extra $100 a month where I work. ---
**Author:** ![Obsidian](https://avatars.discourse-cdn.com/v4/letter/o/51bf81/32.png) [@Obsidian](https://boards.straightdope.com/u/Obsidian)\ **Post date:** [February 26, 2006, 11:03am UTC](https://boards.straightdope.com/t/insurance-question/346101/9 "2006-02-26T11:03:06Z")
I’m confused. . . is that extra $200 (or $50 or $100) representing the cost of moving up to a family plan? Or do you have to pay for the family plan PLUS some sort of punitive extra fee? My company does the former-- insurance is 100% paid for the employee, and then you can pay the difference if you want to add your family (I honestly don’t know what the number is, as I’m single). We also have a policy, which I’ve seen at a number of companies around here, that if you refuse coverage to join your spouse’s plan you get a salary increase equivalent to the cost of your health insurance. (The very first company I worked for when I moved out here provided 100% paid health insurance for the employee and all dependents. . . Blue Sheild PPO with a $250 deductable. I miss the dotcoms.) ---
**Author:** ![Cillasi](https://avatars.discourse-cdn.com/v4/letter/c/71e660/32.png) [@Cillasi](https://boards.straightdope.com/u/Cillasi)\ **Post date:** [February 26, 2006, 12:00pm UTC](https://boards.straightdope.com/t/insurance-question/346101/10 "2006-02-26T12:00:29Z")
It’s the difference between individual coverage and a family plan. Some companies also have a plan for two people only (couple or parent and child) which is a little cheaper than family plan which assumes two parents and at least one child. The extra amount you pay is based on the type of plan your firm offers. The higher the benefit level, the more you will pay. On the other side of the coin, if you decline coverage at your job, some employers now offer a cash supplement. The medical coverage is considered part of your employee benefits, so if you decline because you have coverage under your spouse’s plan, you can collect, in cash, the portion of the premium your job would pay. It is effectively a wage increase and you will see it in your regular paycheck. You can only decline coverage upon producing proof of alternate coverage. > [@Obsidian](#): > > I’m confused. . . is that extra $200 (or $50 or $100) representing the cost of moving up to a family plan? Or do you have to pay for the family plan PLUS some sort of punitive extra fee? > > My company does the former-- insurance is 100% paid for the employee, and then you can pay the difference if you want to add your family (I honestly don’t know what the number is, as I’m single). We also have a policy, which I’ve seen at a number of companies around here, that if you refuse coverage to join your spouse’s plan you get a salary increase equivalent to the cost of your health insurance. > > (The very first company I worked for when I moved out here provided 100% paid health insurance for the employee and all dependents. . . Blue Sheild PPO with a $250 deductable. I miss the dotcoms.) ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [February 26, 2006, 1:21pm UTC](https://boards.straightdope.com/t/insurance-question/346101/11 "2006-02-26T13:21:30Z")
> [@Obsidian](#): > > I’m confused. . . is that extra $200 (or $50 or $100) representing the cost of moving up to a family plan? Or do you have to pay for the family plan PLUS some sort of punitive extra fee? It’s not the cost of the family plan. It’s called a “working spouse primary fee” where, if you have a working spouse, and the spouses’ company offers to pay _any_ part of their cost, and you decline it, the cost of giving the spouse primary coverage on the other plan is $200/month. That cost wouldn’t apply if the spouse were not working. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 26, 2006, 1:46pm UTC](https://boards.straightdope.com/t/insurance-question/346101/12 "2006-02-26T13:46:59Z")
> [@Brain Wreck](#): > > It’s not the cost of the family plan. It’s called a “working spouse primary fee” where, if you have a working spouse, and the spouses’ company offers to pay _any_ part of their cost, and you decline it, the cost of giving the spouse primary coverage on the other plan is $200/month. That cost wouldn’t apply if the spouse were not working. You understand that the insurance premium is higher for employee plus spouse than it is for employee alone, right? That’s pretty much universal. The cost that “wouldn’t apply” if your spouse was not working is paid by your employer. Adding your spouse to your health insurance is not free as far as the insurance company is concerned. They want more money because it is you and your spouse on the plan instead of you alone. ---
**Author:** ![Mr.Slant](https://avatars.discourse-cdn.com/v4/letter/m/c57346/32.png) [@Mr.Slant](https://boards.straightdope.com/u/Mr.Slant)\ **Post date:** [February 26, 2006, 3:39pm UTC](https://boards.straightdope.com/t/insurance-question/346101/13 "2006-02-26T15:39:54Z")
I’ve got that at BigBigCorp, my Fortune 1000 employer. It goes something like: Mr. Slant Medical Coverage: $100 Mr. & Mrs. Slant Medical Coverage: $200 If Mrs. Slant has job that offers medical coverage and Mr. Slant chooses to put Mrs. Slant on BigBigCorp insurance anyway, Mr. Slant pays: Mr. & Mrs. Slant Medical Coverage: $200 PLUS Working Spouse Surcharge: $150 for a $350 per month insurance cost. ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [February 26, 2006, 3:47pm UTC](https://boards.straightdope.com/t/insurance-question/346101/14 "2006-02-26T15:47:07Z")
> [@Gfactor](#): > > You understand that the insurance premium is higher for employee plus spouse than it is for employee alone, right? That’s pretty much universal. The cost that “wouldn’t apply” if your spouse was not working is paid by your employer. Adding your spouse to your health insurance is not free as far as the insurance company is concerned. They want more money because it is you and your spouse on the plan instead of you alone. I’m not sure you are understanding the situation. I understand that to add a spouse to my insurance requires an additional family premium and individual premium. And that’s all it costs, if the spouse is unemployed. However, if the spouse takes a job and opts out of her new employer’s plan, the cost of the _same level of coverage_ jumps to $200 a month. Same coverage, same number of people, much higher fee. ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [February 26, 2006, 4:06pm UTC](https://boards.straightdope.com/t/insurance-question/346101/15 "2006-02-26T16:06:39Z")
> [@Mr. Slant](#): > > I’ve got that at BigBigCorp, my Fortune 1000 employer. > It goes something like: > > Mr. Slant Medical Coverage: $100 > Mr. & Mrs. Slant Medical Coverage: $200 > > If Mrs. Slant has job that offers medical coverage and Mr. Slant chooses to put Mrs. Slant on BigBigCorp insurance anyway, Mr. Slant pays: > Mr. & Mrs. Slant Medical Coverage: $200 > PLUS > Working Spouse Surcharge: $150 > > for a $350 per month insurance cost. Yeah, that’s what we’ve got, alright. The “working spouse surcharge.” The stuff companies can get by with these days is just amazing. Charging different amounts for the same coverage just because you could get the same thing somewhere else. ---
**Author:** ![gardentraveler](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/gardentraveler/32/3576_2.png) [@gardentraveler](https://boards.straightdope.com/u/gardentraveler)\ **Post date:** [February 26, 2006, 4:08pm UTC](https://boards.straightdope.com/t/insurance-question/346101/16 "2006-02-26T16:08:20Z")
They’re operating on the theory that you’re wife’s coverage wouldn’t cost them anything if she accepted her employer’s crappy medical coverage. I’m sure they’re subsidizing part of her premium and they want to reduce the number of situations where this happens. Not surprising when you consider how much health insurance costs. It’s a rotten situation, but it’s the reality in the U.S. today. GT ---
**Author:** ![HMS\_Irruncible](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hms_irruncible/32/7394_2.png) [@HMS\_Irruncible](https://boards.straightdope.com/u/HMS_Irruncible)\ **Post date:** [February 26, 2006, 4:11pm UTC](https://boards.straightdope.com/t/insurance-question/346101/17 "2006-02-26T16:11:17Z")
> [@gardentraveler](#): > > They’re operating on the theory that you’re wife’s coverage wouldn’t cost them anything if she accepted her employer’s crappy medical coverage. I’m sure they’re subsidizing part of her premium and they want to reduce the number of situations where this happens. Not surprising when you consider how much health insurance costs. It’s a rotten situation, but it’s the reality in the U.S. today. > > GT Yeah, employers generally operate on the theory of whatever costs them the least. It’s fortunate that there’s no cost advantage in them kicking me in the balls. ---
**Author:** ![Gfactor](https://avatars.discourse-cdn.com/v4/letter/g/9de053/32.png) [@Gfactor](https://boards.straightdope.com/u/Gfactor)\ **Post date:** [February 26, 2006, 4:23pm UTC](https://boards.straightdope.com/t/insurance-question/346101/18 "2006-02-26T16:23:25Z")
> [@Mr. Slant](#): > > Working Spouse Surcharge: $150 That’s the phrase I was trying to think of. [Fees for spousal coverage grow: Surcharges added for those who can get other insurance (2004)](http://www.usatoday.com/educate/college/careers/hottopic25.htm): > [@](#): > > A recent survey by the Kaiser Family Foundation says 12% of U.S. employers vary what they pay for family coverage if an employee’s spouse is eligible for benefits elsewhere. An additional 11% were “very” or “somewhat” likely to do so this year and next. [http://www.actuarialoutpost.com/actuarial\_discussion\_forum/archive/index.php/t-15159.html](http://www.actuarialoutpost.com/actuarial_discussion_forum/archive/index.php/t-15159.html) [http://www.rockdale.k12.ga.us/CenOffice/HumanResources/BENEFITS/benefits.htm](http://www.rockdale.k12.ga.us/CenOffice/HumanResources/BENEFITS/benefits.htm) > **[IB798\_CostSharing.pdf](https://www.nhpf.org/library/issue-briefs/IB798_CostSharing.pdf)** > > 170.49 KB > [@](#): > > Some employers have implemented or are considering higher cost sharing > for dependent coverage. The Hewitt survey found these changes in > 2003 and 2004: 34 percent have higher cost sharing for dependents than > employees, 25 percent provide flexible credits for opting out of dependent > coverage, 10 percent use surcharges for working spouses who do > not elect coverage from their own employer, and nine percent require > working spouses to elect coverage from their employer. > For example, Boeing Company charges employees $100 per month if their > working spouse elects the Boeing plan rather than their employer’s plan, > according to a 2003 report by The Wall Street Journal. They also reported > Verizon Communications and its unions tentatively agreed to a $40 per > month fee for employees with working spouses who decline coverage > from their own employer. Under the agreement, the surcharge does not > apply to spouses who earn less than $25,000 a year or who have to pay > more than $900 annually for their employer’s health coverage. ---
**Author:** ![Balthisar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/balthisar/32/2825_2.png) [@Balthisar](https://boards.straightdope.com/u/Balthisar)\ **Post date:** [February 26, 2006, 4:55pm UTC](https://boards.straightdope.com/t/insurance-question/346101/19 "2006-02-26T16:55:31Z")
How does you company know she works? Or didn’t just get fired yesterday? Or know that she’s indeed eligible at her company? Maybe her company HR will give her a letter of ineligibility due to her part time status, since, you know, she only works 39.5 hours per week. ---
**Author:** ![AuntiePam](https://avatars.discourse-cdn.com/v4/letter/a/f19dbf/32.png) [@AuntiePam](https://boards.straightdope.com/u/AuntiePam)\ **Post date:** [February 26, 2006, 5:15pm UTC](https://boards.straightdope.com/t/insurance-question/346101/20 "2006-02-26T17:15:13Z")
> [@Obsidian](#): > > I’m confused. . . is that extra $200 (or $50 or $100) representing the cost of moving up to a family plan? Or do you have to pay for the family plan PLUS some sort of punitive extra fee? At my company the $50 for the working spouse was **in addition** to the extra cost for the family plan. It was called the Working Spouse Fee. [Next page](https://boards.straightdope.com/t/insurance-question/346101.md?page=2)