You share a home, a budget and a Netflix queue (who keeps watching all these episodes of Friends?). But it may not always make the most financial sense to share the same health insurance plan with your spouse, especially when you both get health benefits through work. By taking the time to figure out which plan is best, you might be able to save money, hassle or both. So here are some questions to ask yourself when deciding whether to go on your spouse’s health insurance.
ARE YOU ALLOWED TO GO ON THE PLAN?
As health care costs continue to squeeze employers, some are making it harder for a spouse to join a plan if he or she has another option. A 2016 study by benefits consulting firm Mercer found that 11 percent of large employers now exclude spouses who have other coverage available, up from 8 percent in 2015. Others may add a “surcharge,” typically about $100 a month, to spouses who have access to their own plan but choose not to use it, so be sure to add in that cost if applicable.
HOW MUCH CAN YOU SAVE?
Still think you might get a better deal combining insurance? The only way to know is to do the math. But investing some time in figuring out the costs could put money in your pocket. So, pull out the specifics for each plan, sharpen your pencil and do three sets of equations:
- You and your spouse each on your own health insurance
- You and your spouse on your health insurance
- You and your spouse on your spouse’s health insurance
Make sure you’re comparing apples to apples, and consider all the costs:
Premium: The amount you pay each month for coverage. Often an employer will cover a portion of this and will typically contribute more toward the employee’s plan than the spouse’s. So, based on premium alone, it's generally more economical for each spouse to be on his or her employer’s plan. But there are other considerations, which is why you should look at your total costs.
Deductible: The amount you pay for the health care services before your insurance plan starts to pay. So, if you have a $1,000 deductible, you pay the carrier’s negotiated price for in-network medical services until you hit that amount.
Coinsurance: Should you meet your deductible, the carrier will pay a percentage for all additional medical claims.
Copayment: Some plans require you to pay a flat amount for certain services, typically prescription drugs, doctor visits and emergency room visits. Though most do not apply to the deductible, some plans require you to meet the deductible before the copays apply.
Remember that each plan will have different variables, which is why this exercise will take some patience. Even though you can’t predict exactly how much healthcare you’ll consume in a particular year, which will affect your copayment and deductible investments, use the typical number of annual visits and procedures and keep it the same for all three scenarios.
Once you’ve done all that math, you should have a picture of what the three scenarios will cost you in a typical year. The lower number will probably win out. But, not so fast!
Investing some time in figuring out the costs could put money in your pocket. So, pull out the specifics for each plan, sharpen your pencil and do three sets of equations.
ARE YOUR DOCTORS COVERED?
Take a look at the “in-network” providers for each of the plans to make sure that your preferred practitioners and specialists are covered. Paying for “out-of-network” care can add up quickly because most insurance plans reimburse a lower percentage than for providers in their plan.
WHEN IS THE RIGHT TIME TO SWITCH?
The final consideration is how to make the switch. That’s because each plan has an “open enrollment” period, which is the time an employee can choose a different plan (unless you have a special exception like getting married or having a child). Typically that period is in the fall, with new plans kicking in January 1. But if your respective plans renew at different dates; say, one in January and one in July, you’ll need to talk to your human resources department to find out how to navigate the timing issue.