Should You and Your Spouse Have Shared Benefits Plans?
- Kate Dore
- 3 min read
There are many big decisions to make as newlyweds. As you combine lives, you will have to make choices about your home, finances, and your family. You will also have to plan for healthcare—including your health insurance options. There are several things to consider before signing up for a plan, though. Here's what you and your new family need to know to make the right choices.
How to choose the right plan
Once you get married, you will have to make some tough decisions about health insurance. You will have three options to choose from: keeping separate health insurance plans, joining your spouse’s plan, or having your spouse join your plan.
Do all companies allow joining your partner’s plan?
Sharing health insurance and other costs can be a major benefit of getting married. The problem is, not all companies allow spouses to join their employer sponsored healthcare plan. A 2016 study from Mercer found 11% of large employers exclude spouses who may have access to another health insurance plan.
What is a spousal surcharge?
For companies that allow it, you may see a spousal surcharge added to your insurance. This is a monthly charge that is added to your monthly health insurance contribution or premium for your spouse. According to the Mercer study, this surcharge usually averages about $100 per month.
Are you qualified for a special enrollment period?
You will also have to consider enrollment periods. Getting married is considered a qualified life event that may trigger a special enrollment period. These periods give you 60 days to sign up for a private health insurance plan or 30 days to enroll in an employer's plan. To qualify for a special enrollment period, though, you may have to show proof of a life event, such as your marriage certificate.
What is the difference in cost?
According to the Kaiser Family Foundation, in 2020, the average annual premiums for employer-sponsored health insurance was $7,470 for single coverage and $21,342 for family coverage. They also report that covered workers contribute an average of 17% of the premium for single coverage and 27% of the premium for family coverage, and that workers in smaller companies contribute more than workers at larger companies.
Benefits of a shared package
One benefit of getting the same health insurance coverage as your spouse is you may meet the plan’s deductible faster, which could mean fewer out-of-pocket expenses for the year. In addition, one of your workplaces may offer lower premiums that the other, or access or a better, or broader, network of doctors. Joining the same health insurance plan may be more affordable, but before you switch, you will need to compare premiums, deductibles, coinsurance, and copayments to find out.
When to consider a family plan
As your family grows—either from combining health care plans with your partner or planning to have children—the cost of health insurance will increase. In 2020 the Kaiser Family Foundation also reported that average premium for family coverage increased 22% since 2015 and 55% since 2010.
That's a massive financial burden for any family. But you should consider the plan’s full out-of-pocket maximum costs before making a decision. Depending on your deductible, your family could pay a lot more—or a lot less—on out-of-pocket medical expenses. You should also look at co-payments, co-insurance, and see which providers the plan includes.
If you choose a high-deductible health insurance plan, you can see if you can pair it with a health savings account (HSA). These accounts allow you to save pre-tax dollars for qualified medical expenses. Your employer also may offer a flexible spending arrangement (FSA), which could also cut back on out-of-pocket costs.
Don't wait on health insurance decisions
As a newly married couple, it may be more exciting to plan things like trips and dinner parties. But you shouldn't push your family's health insurance to the back burner. By procrastinating, you could miss a key deadline, which could leave you with a gap in health coverage or paying too much for health coverage. The sooner you start comparing options, the easier—and faster—the decision will be.
Learn more with Lively
To help you understand your options when it comes to health insurance, saving for retirement, and Health Savings Accounts, visit Lively's resource page. If you'd like to open up an HSA for you or your family, get in touch with us at Lively.
Disclaimer: the content presented in this article are for informational purposes only, and is not, and must not be considered tax, investment, legal, accounting or financial planning advice, nor a recommendation as to a specific course of action. Investors should consult all available information, including fund prospectuses, and consult with appropriate tax, investment, accounting, legal, and accounting professionals, as appropriate, before making any investment or utilizing any financial planning strategy.