We’re talking health care benefits today. Ready?
Spousal carve out is the newest trend in employee healthcare benefits and it’s not a popular one. So what is it exactly? It’s a policy where spouses with access to healthcare benefits from their own employer will be exempt from receiving benefits from your employer. It can look a little something like this: You are employed at Company A and your spouse is employed at Company B. Both Company A and B provide healthcare insurance. You and your spouse have chosen to use the insurance at your employer, Company A. That is until Company A rolled out a new spousal carve-out policy which means since your spouse can receive insurance from his/her employer Company B, they will now have to use that benefit instead of piggy-backing on yours. Company A will no longer provide coverage for your spouse because he/she has access to coverage at their own employer.
As you can imagine, employees aren’t big fans of this. Most often because they think their employer will no longer be covering their spouses at all. Total spousal coverage carve-out is very rare, for most companies it only applies to spouses with full-time jobs that provide healthcare insurance. A little education on what the policy really means can clear up the confusion, but many employees are still unhappy about the policy.
To me, it’s the perfect example of our relationship with our benefits. Many people view their benefits as a form of compensation. Which, by the way, is exactly what they are. So when your employer pulls a benefit it can feel like a pay cut. In all likelihood, this isn’t the intention. Like a lot of benefit changes, spousal carve out is a necessary cutback to account for the rise in healthcare costs. Employers are trying their best to make cuts as painless as possible and spousal carve out is a trending way to do this.
Any changes in compensation or benefits can be confusing and/or frustrating, but give your employer the benefit of the doubt. More than likely they are truly doing everything they can to keep your benefits as consistent as they can.
Peter Dunn a.k.a. Pete the Planner® is an award-winning financial mind and a former comedian. He’s a USA TODAY columnist, author of ten books, and is the host of the popular radio show and podcast, The Pete the Planner Show. Pete is considered one of the foremost experts on financial wellness in the world, but he’s just as likely to talk your ear off about bass fishing.
This is being implemented at my work now…it doesn’t affect me given my wife is a consultant, so she doesn’t have benefits through her employment. What is comical and somehow unforeseen is what is happening to couples that both work for my company. Last year, they would have been under one policy together…this year, they are forced to either be on separate plans with our company (more expensive) or pay a $50 fee each pay period. I understand the rationale behind the move, but it’s clear there are some bumps in this evolving road as, yet again, unintended consequences weren’t taken into consideration during the planning process.