56° F

Health care reform ... It's not you, it's your spouse

Published On: Aug 27 2013 10:29:38 AM CDT
Updated On: Aug 27 2013 10:56:30 AM CDT
Health Insurance 2

By attorney Keith Sonderling, Special to THELAW.TV

Since the Patient Protection and Affordable Care Act (also known as "Obamacare") was signed into law, many business owners have consistently complained about the increased costs of its implementation. Because the start date of the major provisions of the Act were delayed from 2014 to 2015, most of the employees whose policies may be affected have not yet actually felt any of the alleged negative effects and instead have only heard of looming changes.

Now, as companies begin to prepare for the start of the act, employees are slowly beginning to feel these effects. UPS recently informed its employees that health care coverage for their spouses would no longer be made available. UPS estimates that this change will effect nearly 15,000 of its employees' spouses and save the company $60 million dollars. Similarly, the University of Virginia is dropping employees' spouses from its plan, in response to spending $7 million dollars to implement Obamacare at the University. Many employees now are questioning why their employers are targeting and dropping their spouses.

The reason is simple: the Affordable Care Act allows it. Under the act, employers are not required to provide health care coverage to an employee's spouse. In doing so, the act altered the definition of who is a "Dependent" for purposes of offering health care coverage to employees. The term Dependent means a child under the age of 26 years old. This includes all natural born children, adopted children, and stepchildren of the employee. The term specifically does not include the spouse of the employee. The reasoning behind not including an employee's spouse as a Dependent is based upon the assumption that the spouse is working and eligible to receive coverage from their own employer (regardless if they are actually employed).

In essence, the Affordable Care Act only requires employers to offer health care coverage to its full-time employees and their dependents -- no one else. Although the employer has no option with regards to insuring the employee's children, it is the employer's sole option to offer coverage to the employees' spouses. Thus, many employers like UPS will drop spouses from their health care plan as a cost-saving mechanism. Doing so will certainly be a cost saving mechanism for the employer, but could pose a logistical nightmare for a spouse who suddenly needs to find a new insurance plan separate from their spouse and children. Other employers may continue to offer spousal coverage, but charge a surcharge, penalty, or other fees for spouses to be on the company plan. Although this change may enrage employees and their spouses, the companies who have done so, and those who will follow suit, can simply contend that they are simply following the mandates of the law.

The author, Keith Sonderling, is a business lawyer at the West Palm Beach, Fla., firm Gunster, Yoakley & Stewart, P.A.

  • Marysville Pilchuck school shooting 4


    2 dead in school shooting near Seattle, sources say

    A school shooting has been reported at Marysville-Pilchuck High School in Marysville, Washington, about 35 miles north of Seattle.

  • Craig Spencer

    America's Ebola patients

    An American doctor who was working with Ebola patients in Guinea was been diagnosed with the disease after returning to New York. Learn more about him and America's other Ebola victims.

  • Hot peppers


    Notable food recalls

    A North Carolina producer of peppers and hot sauces is voluntarily recalling 6,215 pounds of fresh serrano chili peppers because some tested positive for salmonella. Here are other notable food recalls that made headlines.

  • jack-o-lantern Halloween pumpkin

    Juliet James/SXC


    Games, recipes, trick-or-treating, scary movies and everything else you need to make your Halloween extra spooky.

  • Politician, politics, debate, election

    iStock / bns124

    Election Coverage

    Get up-to-date on political stories, Reality Check the latest political ads, learn about the candidates and find election results in our special section.

  • Ebola virus pink


    Ebola special coverage

    Get the latest news on the Ebola outbreak and resources to help you learn more about the deadly virus.