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We are on my wife's health insurance policy. I have access to the insurance policy from my employer; however, for the past few years wife's policy was much better. This year wife's policy introduced a Spousal Surcharge which will be $1200 extra a year.

Even so her open enrollment period just started. The one at my work has finished 2 weeks ago, nonetheless I called the HR and asked if the above situation qualifies for the exception, and if can review the policies / compare them and potentially signup thru my work.

The answer was No.

Then the person added that at my work I will also have a Spousal Surcharge. I replied that this is irrelevant as we both can have separate insurance policies form our respective employers. The person told me that it doesn't matter if she is on my policy or not; "as long as she has access to insurance through her employer," I would have to pay the surcharge.

At this point I started mentally questioning this person's competency in the question. I gave two scenarios.

  1. I have insurance, and spouse refuses all insurance. Do I have to pay surcharge? The answer was Yes, as she has "access."
  2. I have my insurance, she has her insurance, do we both pay surcharges? After some pause, Yes, as both of you have "access."

At this point I thanked the person and hung up the phone. I don't get it. I did my research online, and I got the impression the whole thing is done to encourage spouses to buzz off and get their own insurance. I can understand that, but being double penalized (see 2.) doesn't go well with that intention.

I still think my HR person was incorrect. But won't be surprised if someone points out some resources that confirm that.

Please advice, if you are familiar with the topic.

Update:

I found following in the FAQ for my wife benefits:

Can my spouse move to his/her employer’s medical plan even though it is not their open enrollment? Is this a qualifying event/status change?

The IRS regulations on Section 125 Cafeteria plans permit employers to allow employees to change their election mid-year if it is being done during the open enrollment of the employee’s spouse. For example, open enrollment is effective January 1, but your spouse’s enrollment is effective July 1, the IRS would typically view a change during either enrollment period as valid. The IRS regulations also permits benefit changes mid-year if there is a significant change in the cost of the medical plan. As an example, the Spousal Medical Plan Surcharge, when applicable, is $1,200/year and so could be a legitimate reason for a mid-year change. Check with your spouse’s employer to verify that they permit either of these IRS-qualified status changes.

I highlighted a few words. Obviously one has to call HR and confirm that qualifies as "life change event". Not sure if it depends on the regulation or up to company to decide.

I called HR 3 times. 2 times was told it doesn't qualify and 3rd time (maybe they got tired of me) was told it does. Go figure. I will try to enroll as it makes financial sense.

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A company can charge you the employee extra if your spouse has access to an employer health plan but chooses to enroll in your health plan. The surcharge is independent of the rate tiers shown in the illustration above. This is a new trend we are seeing in the health insurance arena.

It's a way to prevent double dipping in case your company offers a generous contribution towards dependent coverage.

If the cost of your wife's insurance will be going up, you can certainly make a change to get back on your health plan. The is known as a "qualifying event." You'll want to make sure you notify HR ASAP so that there isn't a gap in coverage.

  • @Lucia, thanks for the reply. Yes I think you are correct it is "qualifying event.". You just have to be persistent about it. I with the was a document I can point to with all the qualifying events. Google gives me just the most common: death, birth, etc. – varm Dec 1 '16 at 0:36

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