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Help! My Employer Just Dropped Spousal Coverage

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Written by:
Andrew Hall

Key Takeaways

  • Your company can remove spousal coverage, meaning they choose not to cover spouses (and only children) as dependentsA dependent is a child, spouse or domestic partner covered by another person’s health insurance plan. .
  • If you or your spouse lose coverage due to an employer dropping spousal coverage, you have options to secure coverage.
  • Looking into coverage with your employer is one coverage option to explore. Contact your employer’s Human Resources Department to inquire about coverage.
  • Purchasing individual health insuranceYou can purchase individual health insurance to cover you and your family’s medical needs. This type of insurance is offered and sold by private companies. is a highly customizable way to buy insurance that meets your health care needs.

FAQs

In the spousal carve out, the employer defines that spouses are ineligible to participate if they are eligible for other employer-sponsored coverage. With the spousal surcharge, the employer has a surcharge for spouses eligible for other employer-sponsored coverage.
The “carve out” and the “surcharge” have different Health Insurance Portability and Accountability Act (HIPAA) implications. With the carve out, an employee’s spouse is ineligible for coverage. This triggers a HIPAA special enrollment period (SEP), and the spouse’s employer would allow them to enroll in their group plan if the spouse is eligible.

The surcharge does not trigger the same SEP. This means the spouse’s employer would not be required to offer mid-year enrollment in their group health plan. Although the loss of coverage is a qualifying event for HIPAA, a plan change does not qualify for the continued coverage under COBRA.