Employers Reconsidering Commitment to Spousal Health Coverage

While not as prevalent, a similar trend has emerged in health care coverage for employees’ children.

More than half (56%) of employers have increased employee contributions to health care coverage for spouses, with another 25% planning to do so by 2018, according to results of the 20th annual 2015 Willis Towers Watson/National Business Group on Health (NBGH) Best Practices in Health Care Employer Survey.

Additionally, use of spousal surcharges when other employer-provided coverage is available is expected to more than double by 2018, from 27% to 56%. The average spousal surcharge across all employers surveyed is $1,200 per year. The survey also found that a small number (3%) of employers don’t offer or have eliminated subsidies altogether for spousal coverage, with another 10% planning to by 2018.

“Given the high cost of health care, companies no longer want their plans to be spouse magnets, which may incur thousands of dollars a year in additional health care expenses when spouses have access to coverage through their own employers,” said Randall Abbott, senior health and benefit strategist, Willis Towers Watson. “Assessing the actual costs for spouses and determining how to best manage them can help create more efficient health care plans and avoid or reduce additional across-the-board increases in employee contributions.”

While not as prevalent, a similar trend has emerged in health care coverage for employees’ children. Just under half (46%) of employers have increased employee contributions for children’s health care benefits more than for employee-only coverage, with another 15% planning to by 2018.

Survey results show total health care costs (employer and employee) reached $12,041 per employee per year (PEPY) in 2015 and are expected to rise nearly 5% (to $12,643 PEPY) in 2016.

The 20th annual Willis Towers Watson/NBGH Best Practices in Health Care Employer Survey identifies the actions of high-performing companies as well as current trends in the health care benefit programs of U.S. employers with at least 1,000 employees. The survey was completed by 487 employers in June and July 2015. Respondents collectively employ 15.1 million full-time employees, have 12 million employees enrolled in their health care programs and represent all major industry sectors.