As healthcare costs continue to rise, employers are exploring strategies to manage plan expenses without reducing the quality of coverage. Two increasingly popular tools in this effort are the implementation of spousal surcharges and the use of dependent eligibility audits. When used together, these practices help ensure that only eligible individuals are enrolled in a plan and that employees are paying appropriately for the coverage they elect.
What is a Spousal Surcharge?
A spousal surcharge is an additional fee added to an employee's health insurance premium when their spouse enrolls in the plan despite having access to other employer-sponsored coverage. The surcharge doesn't prevent spouses from enrolling, but it discourages them from doing so unnecessarily, helping to control healthcare costs.
Employers typically ask employees during open enrollment whether their spouse has access to other coverage. If the answer is yes, a monthly surcharge is applied to the employee’s premium if the spouse still enrolls in the employer's plan.
Why Conduct a Dependent Eligibility Audit?
A dependent audit helps employers verify that only eligible spouses, children, and domestic partners are enrolled in their health plans. The audit process usually involves requesting documentation such as marriage certificates or birth certificates and can uncover ineligible dependents, such as divorced spouses or children over age limits who are not students or otherwise qualifying.
Importantly, dependent audits can also help enforce spousal surcharge policies. By including a spousal attestation form, employers can confirm whether a spouse has other coverage available and ensure the surcharge is applied only when appropriate. This creates a more equitable and compliant process for all plan participants.
Benefits of Using Both Together
When implemented as a coordinated strategy, spousal surcharges and dependent audits can significantly reduce unnecessary healthcare spending while promoting transparency and fairness. These tools also strengthen plan compliance with ERISA and IRS regulations and help employers demonstrate good stewardship of benefit dollars.
If your organization is considering a spousal surcharge or dependent audit, contact BAS at solutions@basusa.com for information about implementing such processes quickly and easily.
Benefit Allocation Systems (BAS) provides best-in-class, online solutions for: Employee Benefits Enrollment; COBRA; Flexible Spending Accounts (FSAs); Health Reimbursement Accounts (HRAs); Leave of Absence Premium Billing (LOA); Affordable Care Act Record Keeping, Compliance & IRS Reporting (ACA); Group Insurance Premium Billing; Property & Casualty Premium Billing; and Payroll Integration.
MyEnroll360 can Integrate with any insurance carrier for enrollment eligibility management (e.g., Blue Cross, Blue Shield, Aetna, United Health Care, Kaiser, CIGNA and many others), and integrate with any payroll system for enrollment deduction management (e.g., Workday, ADP, Paylocity, PayCor, UKG, and many others).
