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Issue of spousal coverage in health plans flares as Catholic Health restores benefit

Posted: November 30, 2014 at 10:46 pm

Catholic Health System last month informed its workers that it would no longer provide health insurance to their spouses who could obtain coverage through their own employers, citing the rising cost and a growing number of spouses added to its medical plans.

The hospital system reversed course two weeks later in response to objections from employees. But administrators defended their initial decision and left open the chance that the policy could be put in place next year.

Well look at everything going forward. But one of the things we do know is that one employer and theres many of them like us cannot absorb the health care costs and responsibilities of a community, said Michael J. Moley, senior vice president and chief human resource officer for Catholic Health.

While Catholic Health changed its mind, more companies are imposing limits on coverage of workers spouses to hold down the price of employee health benefits.

First Niagara Financial Group this year began excluding spouses who can get insurance elsewhere, and UPS generated headlines last year when it did the same with its white-collar workers.

A survey by benefits consultant Towers Watson found that the share of large employers planning to exclude spouses is likely to double by 2015. Local insurance brokers say few companies here have taken that step because of concerns over how employees will react, but its on their minds.

It is definitely in the conversation, said Kathleen OConnell Armstrong, employee benefits manager with the Evans Agency. Our clients are scraping with their nails on keeping benefits for their employees however they can still offer them but theyre becoming so cost-prohibitive.

The price of company-provided insurance is rising, though more slowly than in the 1990s and early 2000s, and employers are hunting for new ways to trim costs. The average yearly premium for employer-sponsored family health benefits rose by 3 percent this year, to $16,834, according to the latest Employer Health Benefits Survey from the Kaiser Family Foundation and the Health Research & Educational Trust. Thats in line with modest increases in recent years; workers pay about one-fourth of that bill.

Many companies are trying to trim costs without affecting employees basic benefits. While the Affordable Care Act requires coverage for full-time employees and dependents at large employers, it doesnt for spouses.

I think that just brought it to light. OK, you dont have to offer it to spouses thats what the governments telling me. Maybe I should look at this as a benefit plan design option, said Brian Murphy, a partner with Lawley Benefits Group.

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Issue of spousal coverage in health plans flares as Catholic Health restores benefit

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