Help! My Employer Just Dropped Spousal Coverage

Key Takeaways

Your company can remove spousal coverage, meaning they choose not to cover spouses (and only children) as dependents .
If you or your spouse lose coverage due to an employer dropping spousal coverage, you have options to secure coverage.
Looking into coverage with your employer is one coverage option to explore. Contact your employer’s Human Resources Department to inquire about coverage.
Purchasing individual health insurance is a highly customizable way to buy insurance that meets your health care needs.

Employers are Watching Their Bottom Line

As health care costs continue to rise, employers are exploring all options to cut costs and manage their health care spending. As part of the Affordable Care Act (ACA), employers can choose to offer medical insurance benefits only to employees and their dependent children, not to employees’ spouses — it’s called a spousal carve out. Still, this rule must apply consistently. An employer cannot discriminate by extending coverage to some employees’ family members but not to others.

Some employers apply spousal surcharges, a fee assessed if your legal spouse was on your employer’s plan but had access to coverage elsewhere. Others employ a more drastic measure: Cutting spousal coverage altogether.

If you or your spouse’s employer just dropped spousal coverage, you have options. Below, we’ve outlined two options you can look into today.

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Talk to Human Resources

If you were on your spouse’s health plan and can now no longer be covered, talk to your employer’s Human Resources Department. (Similarly, if your spouse was on your health plan and lost coverage, he/she should speak with their Human Resources Department.)

Because you lost coverage, you’ve experienced a Qualifying Life Event (QLE). This means you can enroll in your employer’s plan (assuming you meet other eligibility requirements as hours worked). Ask your Human Resources department for a Summary of Benefits and Coverage (SBC) and a cost summary of your plan’s benefits to determine if it’s the right fit for you.

Keep in mind that most employer-sponsored health plans only allow a 30-day window for you to enroll after experiencing a QLE.

Consider an Individual Health Plan

Individual health insurance plans offer flexibility and customization on a few different fronts. When shopping for insurance on a health insurance marketplace, you can:

Tailor benefits to your specific health care needs.
Pick a plan that includes your favorite doctors in-network.
Find a plan that meets your budget. When it comes to individual health insurance, you have 60-days to enroll in health insurance after experiencing a QLE.

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FAQs

The “carve out” and the “surcharge” have different Health Insurance Portability and Accountability Act (HIPAA) implications. With the carve out, an employee’s spouse is ineligible for coverage. This triggers a HIPAA special enrollment period (SEP), and the spouse’s employer would allow them to enroll in their group plan if the spouse is eligible.

The surcharge does not trigger the same SEP. This means the spouse’s employer would not be required to offer mid-year enrollment in their group health plan. Although the loss of coverage is a qualifying event for HIPAA, a plan change does not qualify for the continued coverage under COBRA.

This website is operated by GoHealth, LLC., a licensed health insurance company. The website and its contents are for informational and educational purposes; helping people understand Medicare in a simple way. The purpose of this website is the solicitation of insurance. Contact will be made by a licensed insurance agent/producer or insurance company. Medicare Supplement insurance plans are not connected with or endorsed by the U.S. government or the federal Medicare program. Our mission is to help every American get better health insurance and save money.
Any information we provide is limited to those plans we do offer in your area. Please contact Medicare.gov or 1-800-MEDICARE to get information on all of your options.