Health Insurance: Single/Family vs. Single/Couple/Single+Kids/Family?

Question

Which is the fairer way to offer/price health insurance benefits -- just two choices for employee only or family, or a wider arrange of choices that separate out couples without kids or single adults with kids (also covering cases where the adult's spouse is separately insured). I've seen arguments from HR experts that more categories helps encourage families to take advantage of spouse insurance, but I've also seen complaints from employees that this change comes across as very family-unfriendly; your thoughts? Much appreciated.

Answer 1

Well you may not have a choice.

I know of one employer that forces employees to take their spouse's coverage, if available. Which to mean seems very shaky on a legal basis.

I've also read recently about other employers who are doing what might be more legally acceptable, charging a higher rate for employee coverage, if that employee's spouse has similar coverage.

All in all the trend is for employers to find ways to get their employees off their company's policy, particularly in larger companies.

For companies with more than 50 employees, they usually 'self-insure' meaning that the company (not an insurer) is the payor of claim costs (though most use insurers to run the self-insurance system).

So when shopping between you and your spouses coverage, know exactly what each plan is......

Is it a true indemnity insurance or pure HMO plan?

Or is a self-insurance system run by a third-party administrator (TPA).

I say make sure you know because if it is a TPA system, those policies don't have to have any mandated benefits, so you may go to the doctor thinking you are covered for a certain procedure, only to find out your self-insurance plan doesn't pay for that.

I am a big believer in more competition among health plans so to me I think you should have all available options, including possibly you taking single coverage from your employer and putting your kids on your spouses' plan, depending on how much it all costs and how much is covered.

It can be a daunting task to figure it all out. Chart it well and good luck!!!

Answer 2

All health insurance plans are risk-based. The employer and insurer have to know who they are insuring, before setting rates. An unmarried working individual has only one option: to buy health insurance for him or herself.
The second option: a family plan has to list all of the family members intended to be covered by health insurance, prior to the time the coverage is afforded.
When both spouses work, there is no need for each to have his or her own insurance. The spouses decide which employer plan is better in terms of cost or benefits, then both insure under that plan, paying less than two polices, but more than one policy, to get coverage for both spouses.

Answer 3

Most of the time it's one of four choices: Employee only, Employee with one other (spouse or child), employee plus all (more than one) children or family (employee, plus spouse and all children).

I don't think it's family un-friendly to want the spouse's employer to pick up their portion of the cost. Unfortunately, most families are not family friendly - ie, both parents work full time. So you can't blame that on the employers!