If both you and your spouse or partner work for companies that provide health insurance plans, you have the option of getting coverage through your own employer — or signing up through your spouse’s. If you’re unhappy with your current coverage, it might be time to leave your employer’s health insurance and switch to your spouse’s.
But before making that jump, you’ll need to look at six key factors.
1. Employee Contributions
Mike Schneider, managing director with NFP, an insurance broker and consultant, said that the first factor that most employees consider is the amount of money they are spending on each paycheck for health insurance.
What if the combined employee contributions would be lower if both went on the insurance plan of one spouse? Many will automatically make that jump. Saving money is good, but Schneider warns that the cost of insurance plans is not the only factor that spouses should consider.
“The easiest thing to compare are the employee contributions,” Schneider said. “You are comparing the two plans directly. But you have to be careful: Sometimes the employee contributions, while important, are not the only factor you should consider. Many employees only consider the savings in their combined paychecks, but fail to look at anything else.”
Employees should also consider the deductibles that they’ll have to meet before insurance kicks in. Many employers are moving to high-deductible plans. This means that employees have to shell out more of their own money upfront before their insurance providers begin to cover their medical costs.
High-deductible health insurance usually comes with lower premiums, which is why many might be tempted to jump on their spouse’s plan. But these plans are known as “high-deductible” insurance for a reason: You might have to pay as much as $3,000 or more out of your own pocket to meet your deductible. Before you move to your spouse’s high-deductible plan, make sure that you can afford to cover that deductible should you become seriously ill.
3. Aggregate or Embedded Deductible?
The deductible question becomes even more complicated when an insurance plan is covering an entire family. That’s because some plans have what is called an embedded deductible, while others offer an aggregate deductible.
Here’s how an embedded deductible works: Say your insurance plan’s individual deductible is $1,000 and its family deductible is $4,000. If your son has a medical procedure that costs $6,000, you will have to pay $1,000 out of your own pocket to meet the individual deductible. Your insurance will cover the remaining $5,000. However, if your daughter has a medical procedure that costs $5,000, you will again have to pay the $1,000 deductible before your insurance will kick in and cover the remaining $4,000. That’s because even after your son’s earlier medical procedure, there would still have been $3,000 left over in your family’s overall $4,000 deductible. You won’t be free of the deductible until you finally pass that $4,000 mark.
An aggregate deductible works differently. If your family has an aggregate deductible of $3,000 and your daughter undergoes a medical procedure costing $5,000, you will have to cover $3,000 before your insurance provider begins to cover your medical costs. Your entire deductible will now be met for the year.
“The type of deductible might be an incentive or disincentive,” Schneider said. “Say you have one kid who is really sick. Under an aggregate plan, with just one procedure he could claim your entire deductible. With an embedded deductible, he won’t.”
4. Network of Doctors
Your spouse’s insurance plan might come with lower premiums — but would you have access to your favored medical providers if you jump to it? That’s an important question that people often ignore when tempted by lower premium costs. And it should not be assumed that, say, a HMO plan offered by Blue Cross Blue Shield on your company’s insurance will provide the same medical network as the Blue Cross Blue Shield HMO plan offered by your spouse’s employer.
“There is no guarantee that you will be able to see the same doctors even if your spouse’s plan is being offered by the same insurance provider as yours,” Schneider said. “Different plans, even if you’d think they would be similar, often offer access to different medical providers.”
5. Working Spouse Surcharges
Many employers will levy an extra fee when a working spouse, who has access to their own employer-provided health insurance, signs up for coverage under a spouse’s plan. This surcharge might be high enough to eliminate much of the benefit of switching to your spouse’s insurance plan altogether.
6. Access to Wellness Programs
Schneider says that employees should look at their company’s wellness benefits before making the jump to a spouse’s insurance. Many companies today offer such healthy-living perks as reduced annual fees to local health clubs, or lower insurance premiums for employees who give up smoking or lose a certain number of pounds.
But many companies don’t offer these perks to employees unless these workers are on their insurance plans, Schneider said. If you jump to your spouse’s insurance? Your access to that half-price gym membership might disappear.
“I think people are getting better about doing the research before moving to their spouse’s plans,” Schneider said. “A lot of that is because so many companies are rolling out high-deductible plans. That is a huge shock to employees. It is hammering home the message that their health insurance decisions are important, and that they can have a big impact on their finances.”
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