We have spousal coverage available, but like with most plans, if the spouse has any access to a plan at group rates from an employer, I’d have to pay and extra 400 bucks a month, in addition to my contribution to the premiums. Her employer offers this bullshit, overpriced, 100%-employee-paid catastrophic policy to its fauxlancers, so she has technically has access to group coverage.
She should spend all of her off-the-clock time looking for another job. Practically speaking, she’s not going to be able to change the working conditions. The current labor situation means employers get to call all the shots. If your wife doesn’t like what they’re doing, there’s 100 more people who will wait in line all night to apply for her job.
She shouldn’t mention that she’s looking for another job or else they’ll let her go immediately. When she gets another offer, then she can go to her manager and say something like, “I’m thinking of leaving to get a job with more stability. Is there anything you can do?” Maybe then they’ll bring her on as a full-time employee.
My advice would be for her to lay this scenario out to her employers, and kindly ask that she be W4’d.
That is utter, fucking bullshit.
I don’t know what they ACTUALLY do, but the cynic in me notices that they probably make the most money if they deliberately don’t check anything when they start getting premiums, but then suddenly turn over every rock legal and illegal if you need to make an expensive claim, and suddenly refuse to pay then, don’t even mention refunding the premiums you paid into the apparently invalid contract, and hope you die rather than sue them, so, um, there’d be an incentive for them to do that, and if they gave in to temptation, it could be bad for the insured 
(I seem to recall a court case, but not the result.)
The term for that is “recission”.
It might be worth a call to the Dept. of Labor just to see what they tell yoou about whether the employer can require her to be constantly available, without compensation or any guarantee of work. Check this out:
"8. Can an employee still be on-call or performing work at home during a furlough day?
Whether on-call time is hours worked under the FLSA depends upon the particular circumstances. Generally, the facts may show that the employee was engaged to wait (which is work time) or the facts may show that the employee was waiting to be engaged (which is not work time).
For example, a secretary who reads a book while waiting for dictation or a fireman who plays checkers while waiting for an alarm is working during such periods of inactivity. These employees have been “engaged to wait.” An employee who is required to remain on call on the employer’s premises is working while “on call.” An employee who is allowed to leave a message where he/she can be reached is not working (in most cases) while on call. Additional constraints on the employee’s freedom could require this time to be compensated."
I don’t know what state you’re in, but state law may be helpful here, too. Of course, your wife would have to be willing to go to the mat.
The insurance companies I’ve worked with tend not to check up front but they will check in the event of a large claim and then if they find you lied they terminate you back to your start date and refund your premiums minus any smaller claims they paid out during that time.
Nitpick: W4 is the document you fill out when you hire on to tell the employer how much tax to withhold. W2 is the thing they send you in January which lists how much you earned, how much was withheld etc. So you’ve got the two reversed.
How specialized are the wife’s skills? Might they have trouble finding anyone else to fill the job? If so, it might be some leverage on her part to nail them down to a specific schedule, at least.
Has she spoken to anyone to say “look, if you will not have me on-board full time, you cannot expect me to drop everything without notice. Pay me, or give me sufficient notice when you need me”. Or, to say “this status quo is literally costing me money. If you want to keep me in this situation, you pay me more or change me to a 1099 contractor”. Though technically the job is NOT a contractor position, it fails the IRS tests which determine that.
There was another thread recently in which someone’s teenage kid, who worked at a fast food place, was told to clock out - but WAIT AROUND UNTIL THEY NEEDED HER. I seem to recall that the consensus was: if you’re requiring the person to be available, they are not at liberty and must be paid. If you don’t want to pay them, they can leave.
I’d seriously discuss the situation with a labor lawyer.
I have a feeling she’s freelancing in either design or web. You take what you can get in those fields - a lot of companies won’t hire without experience, and you can’t get experience if you don’t have a job, so this sort of freelancing happens. I hate that whole deal. You have no leverage because some college student will gladly take the job to supplement their beer money.
She is exactly a part-timer. I don’t see any problem with her being required to tell them when she leaves early (assuming she is being paid before she leaves) or when she works from home. However, as others have mentioned, being on-call at home should get her paid. If they need her to respond instantaneously, she needs to be paid to do so. Hourly people I know who are on call get compensation.
Maybe she’d do better asking for a schedule for the next week. If none is given, she could block out time when she will not be working. No reasonable customer can expect a vendor to be infinitely available - forget about this issue, there might be other customers.
BTW, I don’t understand about your insurance. First, if a spouse has coverage that generally reduces the bill for the insurer, since some of the expenses will be paid by the other insurer and most have provisions against people getting double benefits. My wife is a real freelancer, so I have to certify every year that she doesn’t have coverage, but I doubt I’d have to pay more if she did. Also, it sounds like her coverage is not equivalent to yours, so it might pay for you to read the fine print.
The OP’s insurance has a punitive policy, where they really want the spouse to be insured by HER employer rather than the OP’s. As such, they say “if you COULD have coverage elsewhere, but choose to go with us INSTEAD, you have to pay MORE”. They don’t care whether she elects the other coverage, making them secondary, or not.
I suspect it’s an employer-driven thing, since his employer probably chips in some of the cost for the family coverage.
What you’re describing is double-coverage, which (in our direct experience) is often a LOT more trouble than it’s worth. Say my policy would pay 70 dollars on a 100 dollar expense. Used to be, I could file with secondary (my spouse’s, if I was on his plan) and collect the 30 dollars. In recent years however, they’ve gone the approach of saying “we’d pay 70 dollars. Whoops, the other guy already paid that. So we don’t have to pay ANYTHING”. And your premiums for that secondary policy are wasted.
In the OP’s situation, even if they did the double-insurance, the wife’s policy has such a large deductible that everything would fall to the secondary (husband’s) policy. It becomes very complicated.
That makes sense. The last time I seriously looked at this, insurance was still affordable so people took it. In most of the places I’ve worked taking at least minimal medical insurance is mandatory, but these plans are a lot better than high deductible catastrophic insurance.
I never had to deal with double coverage issues, but my friends who did made it sound every bit as much of a pain as you describe.
Now I just send back the form saying my wife doesn’t have coverage. Then do it again. And again. And then call them up to tell them to cut it out already. (Blue Cross was much worse about this than UHC, actually.)