denial of health insur when spouse has coverage

What is the name of your state? New Hampshire

Hello, I saw a reference to a thread on this topic but could not find it.

In New Hampshire, may a small employer provide health insurance benefits only to employees who do not have a spouse who is eligible for coverage through his or her own employer?

Thanks!
Paul Monaghan

may a small employer provide health insurance benefits only to employees who do not have a spouse who is eligible for coverage through his or her own employer?

So you're proposing not offering coverage to employees who have a spouse who works elsewhere who can obtain family coverage through his/her employer? I imagine that would violate the terms of your Plan Document/insurance contract that defines eligible employees. That language probably says something like "All regular full-time employees who customarily work 40 hours per week are eligible for participation after 90 days of employment." (The actual specifics vary by Plan - it's not likely to say that exactly.) I seriously doubt however your eligibility language goes onto say "...except for those who can obtain coverage through a working spouse's employer."

What you CAN do is to offer employees a modest monetary stipend to opt out of the Plan if they don't take your health insurance. That is perfectly legal.

FYI - you should not offer them full cost of the premium if they don't take the coverage. If you do that, you've achieved nothing. I designed an arrangement like this with my last employer (1200 employees) and we offered $75/month to anyone not electing to take our group health plan. About 30% of the employees opted out because they could obtain coverage through a working spouse. The key here though is that we did OFFER coverage to all eligible employees; they CHOSE not to take it.

If you go this route, be advised that the money you offer in lieu of coverage is taxable income to the employee.

Unless what you are asking is, can an employer refuse to cover the spouse of an employee, if that spouse has coverage through his/her own employment, but offer coverage to spouses who do not have coverage available through their own employment and/or are not employed/

If that is the case, the answer is yes, they can.

Thank you both. The scenario I have in mind is the one Beth mentioned - preventing employees from taking advantage of the health insurance when they are already enrolled in another plan.

I agree that the plan as currently written probably doesn't include that extra criterion. But I wonder whether this is due to the law preventing it or just most insurance companies' desire to get all of the business available. Any ideas?

Thanks again,
Paul

The scenario I have in mind is the one Beth mentioned - preventing employees from taking advantage of the health insurance when they are already enrolled in another plan I win.

I agree that the plan as currently written probably doesn't include that extra criterion. But I wonder whether this is due to the law preventing it or just most insurance companies' desire to get all of the business available. Any ideas? I'm not sure it would be legal. While you can define "classes" of eligible employees any number of ways, I doubt you can include "eligible for coverage through a working spouse" as one of them. Eligible employees need to be defined as it relates to their employment with YOU. I've never seen this criteria in a Plan Doc previously though (or even had it suggested) so I've never had to research it and can't say for sure.

Another thing to consider is that more and more employer's Plans are stating that a spouse cannot be covered on an employer's plan if the spouse is eligible for coverage through their own employer. Given that family coverage is particularly expensive, you may wish to consider putting that language in your own Plan so that you're not extending coverage to a spouse who can obtain it through their own employer because your employee and their husband/wife have concluded your coverage is "better" or cheaper for them.

My advice would be to include this provision (rather than the one you're suggesting) and offer a modest taxable stipend to opt out entirely. You'll achieve better results.