Businesses dropping insurance for spouses, despite large profits

An increasing number of employers are cutting health insurance for spouses.  Thankfully, the numbers are still quite small, but the increasing numbers of spouses being dropped should be reason for concern.

Besides record corporate profits, the insurance companies have been doing quite well also — but this move suggests they want even higher profit margins, since spouses who are not working tend to use health insurance more.

Obamacare is a start, but health insurance in the US still needs to undergo a lot more reform to make it work for more Americans. Between the corporatist Democrats and the run of the mill Republicans, there’s little reason to expect additional reform, no matter how badly it’s needed.  The irony is that America’s health care system is already so much greedier, and less effective, than much of the developed world.  And businesses, and insurance companies, have the nerve to whine about Obamacare, which still leaves American workers far behind most of western Europe in terms of health coverage overall.

Of course, companies wouldn’t have to pay so much for health care had we only done real reform to our health care system.  But the Republicans, along with industry stooges like Lieberman and Baucus, said “no” – so America and Americans are destined to continue paying far more for less than what the rest of the developed world gets in terms of health care.

And the greedy companies doing this should be publicly excoriated.

doctor health care obamacare

Doctor via Shutterstock.

Market Watch:

By denying coverage to spouses, employers not only save the annual premiums, but also the new fees that went into effect as part of the Affordable Care Act. This year, companies have to pay $1 or $2 “per life” covered on their plans, a sum that jumps to $65 in 2014. And health law guidelines proposed recently mandate coverage of employees’ dependent children (up to age 26), but husbands and wives are optional. “The question about whether it’s obligatory to cover the family of the employee is being thought through more than ever before,” says Helen Darling, president of the National Business Group on Health. See: When your boss doesn’t trust your doctor

While surcharges for spousal coverage are more common, last year, 6% of large employers excluded spouses, up from 5% in 2010, as did 4% of huge companies with at least 20,000 employees, twice as many as in 2010, according to human resources firm Mercer. These “spousal carve-outs,” or “working spouse provisions,” generally prohibit only people who could get coverage through their own job from enrolling in their spouse’s plan.

Such exclusions barely existed three years ago, but experts expect an increasing number of employers to adopt them: “That’s the next step,” Darling says. HMS, a company that audits plans for employers, estimates that nearly a third of companies might have such policies now. Holdouts say they feel under pressure to follow suit. “We’re the last domino,” says Duke Bennett, mayor of Terre Haute, Ind., which is instituting a spousal carve-out for the city’s health plan, effective July 2013, after nearly all major employers in the area dropped spouses.

While businesses and even government workers may be subjected to such cuts, something tells me that the political class will somehow be immune to such changes. Congress has done nothing to cut its own comfortable benefits during their push for austerity, it hardly sounds like a stretch to guess that this latest attempt at gutting the middle class will be avoided.


An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

Share This Post

  • KellyAn

    If every employer is required to cover their own employees, what is wrong with asking the spouse of an employee to use the coverage provided by their own employer?

  • http://www.facebook.com/edea.krammer.3 Edea Krammer

    They always make things completely hard for all of us! I can’t find any good reason from them why they should make it that way…
    HomeHealthIns.com

  • hauksdottir

    Since “spouses” include gays in a handful of states, under laws recently enacted, I tend to look at this recent development as a bigoted way of side-skirting the issue of covering gay families.

    If the companies are making a profit, why would they give up a cash flow?

  • perljammer

    Anyone who didn’t sleep through their high school civics class knows that 60 votes are required to invoke cloture (before the Senate Democrats were successful in reducing it in 1975, cloture required a 2/3 majority). However, this is where the “willing to work really hard” part comes in. Filibuster doesn’t mean the end of the issue unless you think it’s just too much trouble to wait it out. Also, note that on the first day of each session of Congress, the rules (including the rule for cloture) may be changed by a simple majority vote.

  • http://twitter.com/BillFromDover Bill from Dover

    Move to Maine… it’s already in the works!

  • http://twitter.com/BillFromDover Bill from Dover

    And how many of these greedy companies already refuse to employ a spouse of a current employee?

    Talk about coverin’ all your bases!

  • http://twitter.com/BillFromDover Bill from Dover

    Was this margin of 4 in the senate a filibuster-proof majority at the time?

  • http://twitter.com/BillFromDover Bill from Dover

    Hey, what’s the problem here?

    As a lifelong conservative without medical insurance, when my appendix explodes, I will be more than happy to somehow make my way onto the nearest road where I can curl up in excruciable pain until (hopefully) some liberal will arrive to save my life.

    In other words, I am ready to do whatever it takes to save Papa Johns from adding 4 cents onto the price of a pizza to cover either me or my spouse in this dog-eat-dog world battle for wealth.

    When can I come on Fox, Sean?

  • http://www.facebook.com/colleen.dobrzynski Colleen Ward Dobrzynski

    Name these companies!!

  • Guest

    Name these companies, so I can DROP THEM, by stopping doing business them.

  • dula

    When they came for the healthcare of Gay couples, I didn’t care because I wasn’t Gay…

  • Bob

    yes

  • ComradeRutherford

    “your company cannot afford your spouse”

    In Realty, of course, the insurance companies are making record profits by drastically overcharging your employer for health care coverage.

    In Reality, insurance companies exist for only one reason: to deliver profits to shareholders. That is why they charge so incredibly much and refuse as many claims as they can get away with.

    Paying claims interferes with profits.

    Actually, Sharon Smith’s post is perfect snark, sounding like a crazy right-wing sociopath but just within the boundary of unbelievability. And you guys fell for her joke!

    Clearly no one could ever be as hate-filled as Sharon Smith’s post claims to be. That is the realm of Republicans who, being sociopaths, live to inflict as much misery on others, laughing all the way to the bank, as they kick the starving and homeless to death.

  • ComradeRutherford

    “the President was pretty busy demonstrating that he really didn’t give a crap what was in the law”

    Yes, especially since the law the President went with was almost identical to the joke-bill that the Heritage Foundation wrote back in the late 1980s and was the one that Gingrich used to counter Clinton’s attempt at reform in the mid-1990s. The Heritage Foundation’s bill was so extremist-right that everyone with a brain (Not-Republicans) knew it would never pass, ever.

    On the face of it, it seems that Obama thought that the GOP would vote for their own bill, but underestimated the Republican’s hatred for America. But I don’t ascribe to that innocent interpretation of Obama’s motives. Because it doesn’t matter how crazy-far-right a bill is, if a Democrat advances it, the GOP will turn against it. I think Obama knew this and since Obama is a moderate Republican and not a Democrat at all, he knew exactly what he was doing when he pushed the crazy-right’s pro-fascism health care ‘reform’. The Dems that voted for it have not been actual Democrats, but also moderate Republicans like Obama.

  • perljammer

    Some posters here seem to be putting the blame on Republicans for deficiencies in the Affordable Care Act. The Act was signed into law in March, 2010, when the Democratic Party held majorities in both the Senate (by a margin of 4) and the House (by a margin of 78). In other words, the Dems could have had pretty much any health care law they were willing to work really hard for. Of course, the President was pretty busy demonstrating that he really didn’t give a crap what was in the law just so long as it could be part of his legacy, so that helped a lot too.

  • lynchie

    What a myopic view of life. You and Romney would be ideal together. Have you heard about the unemployment rate for one thing. Companies are not going bankrupt by paying for spouses and in fact if you have a spousal plan you pay more than a single person. As far as corporate welfare they get enough already. I have mine and fuck you is a constant theme of the greedy.

  • rmthunter

    The Republicans seem to be going about everything completely backwards.

  • SkippyFlipjack

    If we lived in a country where affordable healthcare wasn’t tied to our employment this might be a reasonable argument but it is, so it isn’t. Consider the case of a family with a working mom and a stay-at-home dad who is fully healthy after a cancer scare a few years ago and now takes care of the kids. Without mom’s company’s family plan, dad can’t get insurance so his next serious illness may bankrupt the family. That’s our national healthcare system these days, so until it changes it’s not just a matter of the “hanger-on spouse.”

  • http://www.facebook.com/profile.php?id=100004373042043 Sharon Smith

    I am so glad that the world of business has gotten strong and decided that the hanger on spouse does not deserve company financed health insurance. These are adults, that should be working to cover their own insurance. Gone are the days of lay abouts with nothing but time on their hands to go to doctors, while the real workers that are single have to pay more to afford those people. Time to get real, your company cannot afford your spouse. Get with the program, find a company that will provide that insurance based on that person’s health and pay the premiums for that. Don’t expect corporate welfare to take care of them. This is a different world, we want the government out of our lives, I also think employers should be out of our lives. You. the worker should get insurance, not your non worker spouse. This isn’t the 50’s.

  • dmhlt_66

    Any time the words “Republican” and “really this stupid” occur in the same question, I always think:

    Do you really need to ask?

  • Naja pallida

    Yes.

  • http://www.rebeccamorn.com/mind BeccaM

    Two main problems with this situation, besides the near total lack of regulation of health insurance premiums in most places: (1) The presumption of employer-provided and -managed health insurance. (2) The for-profit health insurance and medical industry itself.

  • http://www.urbandictionary.com/define.php?term=Arel Harry R. Sohl

    The race to the bottom continues. Thanks, Reaganomics!

  • Houndentenor

    If Republicans want to avoid a single payer health care system, they are going about it completely backwards. The more people who don’t have affordable insurance, the more attractive “medicare for all” will become. Are they really this stupid?

  • http://adgitadiaries.com/ karmanot

    That problem will be solved when Republicans recind child labor laws so that the family can stay together.

  • Buford

    So Republican voters needs to keep this stuff in mind every time someone suggests that the GOP is the party of Traditional Family Values™. In their corporate version of America, both parents must be out of the home and in the workforce to be able to afford adequate healthcare for their family. Disgusting.

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