Are benefits for me & my wife really cheaper as individuals?
November 30, 2015 3:28 PM   Subscribe

I got married recently. Now we're working through the Life Event Change processes of our respective companies. Here's the puzzler: If I'm reading this right, at my company, Medical is $90/month for myself, $300 for myself+spouse. At my wife's company, it's almost the same. This implies that it would be cheaper for both of us to be insured separately than together. What am I missing here?
posted by Mushroom12345 to Work & Money (20 answers total) 3 users marked this as a favorite
Best answer: That's very common - it's also true for me & my husband. My company is willing to subsidize my own health care a lot more than they will subsidize health care for the rest of my family. Consider it as they offer roughly the same benefit to you (in dollars) whether or not you are married, but allow you to purchase through them at the un-subsidized cost for your spouse & family. Just each keep your own, no big deal.
posted by brainmouse at 3:30 PM on November 30, 2015 [12 favorites]

Best answer: Not a thing. That's pretty much standard everywhere. It goes up like that because typically it's an unemployed spouse getting the benefit.

They make it darned unattractive to cover the whole family under one plan. PLUS, often, they won't let you add a spouse if that person is eligible for a plan at their employer.

Mazel-tov on the marriage though!
posted by Ruthless Bunny at 3:30 PM on November 30, 2015

Like my employer, they probably don't offer a just-husband+wife plan -- your options are single or family, and the family rates build in for children or other dependents. There's nothing wrong with doing like you are thinking, going the cheapest route, and then when you do have kids moving to a family plan is allowed.
posted by AzraelBrown at 3:31 PM on November 30, 2015 [2 favorites]

Best answer: From a benefit design and actuarial perspective, it is cheaper for the following reason. You, employee, are healthy enough to have gotten a job at your employer, and so on average you are healthier than your spouse, who may be healthy but also could be too sick to work. So the premium is typically less expensive for the statistically-likely-to-be-healthier employee spouse rather than the we-have-no-information-about-the-spouse-unless-we-varied-premium-cost-by-health-status-which-is-not-legal spouse.
posted by teragram at 3:38 PM on November 30, 2015 [7 favorites]

This is true most places for reasons others have stated. However I was able to negotiate my spouse being fully subsidized by my employer (company pays 100% medical coverage for both of us) as part of my employment agreement. You may be able to negotiate this as well, now or in the future.
posted by jeffamaphone at 3:48 PM on November 30, 2015 [1 favorite]

Yep, this was the case for my husband and I because the only options were "single" and "family", which was 2-3 times the price. When we had a kid it became cheaper to have us all on the family plan.
posted by tchemgrrl at 3:50 PM on November 30, 2015

Yep, employers generally subsidize more of the employee's premiums than their dependents. My husband and I insured ourselves for as long as that was feasible.
posted by Lyn Never at 3:50 PM on November 30, 2015

Very common for smaller companies. My impression is that the subsidies are expensive for your employer so while they're required to provide them, they want to incentivize you not to take advantage of them.
posted by capricorn at 4:02 PM on November 30, 2015

People that I work with both take the deal and are therefore double covered. It doesn't make sense to me, but that's also an option. This would be if you had high medical bills.
I found this on google.
posted by notned at 4:20 PM on November 30, 2015

Normal. Many companies subsidize a much larger portion of employee coverage than non employee coverage. When deciding, though, make sure to look at the whole picture, not just premium cost. If one plan had a huge deductible and you're anticipating high medical expenses, it may be cheaper to pay the higher premiums to have you both on the lower deductible plan.
posted by pecanpies at 4:33 PM on November 30, 2015

You'll probably end up with a larger deductible if you go with seperate plans, right?

If it doesn't make sense to you, consider that if you insure both of you via one employer, the other employer isn't kicking anything in. When you split it between 2 companies, they're both contributing. I bet the total amount paid is not so different between the 2 methods.
posted by RustyBrooks at 4:34 PM on November 30, 2015

I think the question has been answered, but I'd just like to note that this isn't just a small company thing; I work for a state government and while I pay nothing out of pocket for my health insurance, putting my wife on my health insurance would cost us $495 a month. (Though at least it's an option these days, so hey!)
posted by joycehealy at 4:48 PM on November 30, 2015

Just something to check out while you're at this - some employers (my husband's) will give you a bonus as an incentive if you are insured under your spouse's health plan. Other employers (mine) will punish you with higher rates if you have other insurance available through your spouse and don't use it. In our case, given those factors the cheapest option was for us both to be under my insurance.
posted by amro at 4:52 PM on November 30, 2015 [1 favorite]

One of my former employers actually gave me a credit if I declined their medical coverage as a single person since I was eligible to be covered under my spouse's insurance. So, you might check to see if either of your employers offers that kind of thing, and see if it offsets the additional charge for adding a spouse...
posted by msbubbaclees at 4:52 PM on November 30, 2015 [1 favorite]

My company's plan charges an extra $25/month if my covered spouse is eligible for their own employer-based care.

Family-based deductibles and out-of-pocket maximums may make it cheaper to be on one plan. E.g., you each have $1000 deductible on your own plans and no family deductible vs. on the same plan $1000 individual deductible and $2000 family deductible - so, if one of you spends $2000, the other is deemed to have met their deductible as well. Not all plans structure their family deductibles this way, so read the fine print before deciding.
posted by melissasaurus at 5:20 PM on November 30, 2015 [2 favorites]

Best answer: I am an employer who offers health insurance. I am not your employer who offers health insurance. There are two things at play here, at least - think it's all been covered but just to offer another bit of anecdata:

- the COST of the insurance doesn't have a whole lot to do with what your contribution is. It's related, of course, but this is math you have to do for every individual situation because some employers cover a lot of the expense, others just pay a little (I once worked for a company which offered such a bad deal that I was about to be better off to just buy it on my own, despite their measly contribution, but then ACA changed everything).

- the most salient thing, as others have said, is that in this scenario you get 1 + 1 coverage, which is all you really need. Health insurance is changing to where the cost IS driven by additional family members, but the employer is usually still in the mode of charging one of two rates (single or family), regardless of your individual costs as a family to the employer, because it's complicated and can raise hard feelings if you charge employee A with 3 kids more than employee B with 1 kid.
posted by randomkeystrike at 5:39 PM on November 30, 2015 [1 favorite]

To respond to an earlier point, I am not an expert and every situation is different (might be worth it if you're chronically ill and can somehow get more stuff covered), but I would actively avoid being double-covered. I have never been double-covered, but went through a brief period where there was a transition from one plan to another and went through a lot of red tape where I had a doctor visit and BOTH insurance companies tried to put the claim on the other one.
posted by randomkeystrike at 5:42 PM on November 30, 2015 [2 favorites]

Everyone above is correct - however, you need to pay extremely close attention every November-January for each employer to give you their plan details. My stepdad and mom have switched back and forth several times between having each covered separately and one being on the other's plan, over the last few decades.
posted by SMPA at 6:32 PM on November 30, 2015

My employer, a small private U, charges spouses ~$125% (as two people, family is more) more than just single policies. And there's a $100 surcharge if that spouse is eligible for his/her own employee policy.
posted by Dashy at 6:55 PM on November 30, 2015

What am I missing here?

Economic incentives. Imagine you have a married couple, Alice and Bob, both working, but at different companies. Their employers pay 95 percent of the premiums, and thus have huge incentives to bring that cost down. But because health insurance is untaxable compensation, they still want to offer it. If Alice's plan is cheaper per person than Bob's, they'll take it, and her employer foots the bill for Bob, while Bob's employer saves a boatload of money. This is a slightly paradoxical situation: the better deal you negotiate with insurance companies, the more you pay out.

Their solution is to only offer premium coverage for employees, but allow employees to buy family insurance pre-tax. Then you're really indifferent to additional premiums family coverage would add. And game theoretically, the expected outcome of adopting this policy is that Alice is paid for by Alice's employer, and Bob by Bob's employer. Plus, if Walter is a stay at home father while Wendy works full time, they aren't free-riding on Alice and Bob, or single employees like Eve.

My employer goes so far as to say that if your spouse has coverage from an employer and still elects to take ours, you will pay a penalty. Presumably to exploit irrational loss aversion a bit I guess.
posted by pwnguin at 11:55 PM on November 30, 2015

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