Picking the Right Plan When Both Spouses Have Employer-Sponsored Health Insurance

Do you and your spouse both qualify for health insurance through your employers? If so, you might have a hard time deciding which plan to use

Married couple looking at health insurance coverage options

If both you and your spouse work for companies that offer health insurance to their employees, you have a few choices about your health coverage. These are the three most likely possibilities for you:

  • Separate coverage: Each spouse gets insurance for only themselves and handles their coverage separately. You both may or may not be able to go to the same doctor or clinic depending on each plan’s “provider network” (more about that below). If you have children, you would need to decide which spouse’s plan will cover the children.
  • Everyone on one plan: You decide which spouse’s company offers the best plan – best coverage at the best price – and you cover the entire family under that plan. The other spouse declines coverage from their employer.
  • Dual coverage: You each sign up for coverage from your employer and you each cover each other, or the entire family, on your plan. This is called “dual coverage.” It will be more expensive to have two plans but it might provide more coverage in some cases.

(Note: This article focuses on married couples. Employers may have different rules for coverage for domestic partnerships where the two partners are not married.) Let’s look at each option more closely:

Separate Coverage for Each Spouse

Some employers will not allow you to cover your spouse on your plan if your spouse can get their own coverage from their employer. If so, separate coverage for each of you would be your only option.

And some employers may charge a “spousal surcharge” to cover your spouse if your spouse can get their own coverage from their employer. In this case, you should decide whether it is cheaper to pay the surcharge or to have each spouse get their health insurance separately from their own employer.

Each spouse should choose the plan that is best for them. For example, if one spouse is very healthy with no health problems, they may want to choose a plan with a high deductible and a lower monthly premium. If the other spouse has many health problems, they may want to pick a plan with a lower deductible but a higher monthly premium.

Be aware that if you go this route, you may or may not be able to go to the same doctor or same clinic. Each spouse’s plan may have a different “provider network” with different doctors.

And What About the Kids?

If you have children, one spouse could choose to cover them on their plan, and the other spouse would cover only themselves on their plan. Be sure to check out both employers’ plans carefully to determine which offers the best coverage or the lowest price for your kids. One spouse’s employer might cover your kids for a much lower price than the other spouse’s employer.

Alternatively, both spouses could sign up for coverage of the kids on their plans, giving the kids (but not the parents) “dual coverage.” Since most employers require their employees to pay at least part of the monthly premium for their kids, this would mean you would be paying “twice” for your kids’ coverage.

It’s probably a better idea to determine which spouse’s employer offers the best plan – be it the best benefits or lowest cost – and get coverage for the kids only on that one plan. Learn more about dual coverage below.

Both Spouses (and Kids) on One Plan

This is probably the most common choice for couples, even if both can get coverage from their employers. Since you are paying for only one plan, this could be the cheapest option. In some cases, the spouse who declines their company’s coverage may even get a small financial bonus, since they are saving the company money by not taking the company’s insurance.

Be sure to study each company’s health plan offerings carefully. Different companies may offer very different levels of coverage and benefits. And they may differ in how much their employees must pay for their health insurance.

For example, your company may pay all or most of the cost for your own coverage, but charge you much more to add your spouse and children to your plan. Meanwhile, your spouse’s company may allow you to cover the whole family for less. So first, check the cost of each option.

Next, carefully compare the benefits offered by each spouse’s company. The company plan that is cheapest – that is, that has the lowest monthly premium for the whole family – may offer less coverage. The “cheapest” plan may have high deductibles or high copays, so if one or more member of your family has many medical problems, it could end up costing you more in the end.

Finally, be sure to check out each company’s “provider network.” This is the list of doctors the plan will cover at the lower “in-network” price, meaning you pay less for your medical care.

If you and your family already have a doctor or doctors that you like and want to keep seeing, check to see whether those doctors are included in each company’s provider network. If those doctors are included in your company’s network, but not in your spouse’s network, you might want to go with your company’s health coverage even if it is more expensive.

Dual Coverage

In this option, each spouse signs up for coverage for themselves through their own employer and signs up for coverage for their spouse (and children if they have them). So every member of the family has coverage from two plans.

Of course, this option may cost quite a bit more in monthly premiums, since you’re paying for two plans. And despite what it might sound like, dual coverage does not mean you have twice the coverage! However, in some cases, it might provide more coverage, meaning you could pay less out of your own pocket for health care.

Here’s an over-simplified example of how this option might work. In reality, it’s a lot more complicated than this:

You need surgery. Your company covers only 40 percent for this kind of surgery, while your spouse’s company pays 60 percent. With dual insurance coverage, you could be fully covered for this surgery and might not have to pay anything. Without dual coverage, you would have to pay 60 percent of the cost.

Dual Coverage Can Be Complicated and Does Not Provide Double Coverage

Be careful. Dual coverage rules are very complicated and there are many reasons it may not work out like the above example.

First, there’s the “coordination of benefits.” This is when you have more than one health insurance plan. One plan is “primary” and one plan is “secondary.” If you have a medical expense, such as the surgery in the example above, you must make your claim with the primary plan first.

The other plan might pay for what is not covered by the first plan, but it might not cover all or any of the remaining cost. If either or both plans have deductibles, you’ll have to pay those deductibles before insurance payments kick in. And if the treatment were covered by the primary plan but not the secondary plan, the secondary plan would not pay the remainder.

If the two company plans have different provider networks, one company may refuse to pay. In the above example, let’s say the doctor who performed your surgery is in your company’s provider network, but not in your spouse’s network. So your spouse’s company plan may refuse to pay its 60 percent share.

If you have dual coverage and try to get both plans to cover a medical bill, you may have to enlist your company’s human resources department to help you figure it out.

Do Both Spouses’ Plans Cover the Same Doctors? In-Network vs. Out-of-Network

All health insurance plans have a “provider network.” This is a list of the doctors, pharmacies, hospitals, and other health care providers the insurance company contracts with to provide medical care at a lower cost. If you see a doctor who is in the network – an “in-network” provider -- you’ll pay less for your share of the medical charges. If you see an “out-of-network” provider, you’ll pay more.

Here’s an example: Let’s say you go to an in-network doctor for a service or procedure that costs $1,000 total. Under your company’s health plan, you’d pay only a $40 co-pay for this visit. But if you go to an out-of-network doctor for the same service, you’d pay 30% of the cost, or $300.

If possible, you will want to go to in-network providers because you’ll pay a lot less. So, if you and your spouse or family already have a doctor that you like and want to continue to see, you should find out whether that doctor is in the provider network of your company’s plan or your spouse’s plan. You may want to choose the plan that includes your doctor, even if that plan costs more.

A Fourth Option – Buy Your Own Insurance

This option isn’t used very often, but it might be something to consider. Even if you and your spouse are offered health insurance from your employers, you don’t have to take it.

One or both spouses could consider declining coverage from their employer and instead buying private insurance for one or both spouses and/or children. In some cases, you might get better coverage or lower cost from private insurance. Some companies even offer employees who decline employer insurance a small financial reward because you are saving them money.

Again, you should study all your insurance choices carefully and decide which offers the best benefits for the best price. Private insurance for individuals and families is available through the Affordable Care Act (Obamacare).

Frequently Asked Questions

Q: Can I cancel my health insurance and get coverage under my spouse's plan?

A: Possibly. Check with your spouse’s HR department first. Some companies will only cover a spouse if they are unemployed or can’t get health insurance through their employer. Be careful, though. A 30-day deadline may apply. If you don’t sign up for your spouse’s insurance before the thirty-day window closes, the IRS requires you to wait until open enrollment begins.

Q: Can your spouse legally cancel you and dependents from health insurance policy>

A: Yes, they can as long as it's during open enrollment. A plan subscriber can remove anyone they want. Your spouse is not required to notify you or anyone else about who they decide not to insure.

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