Is it legal for a company to offer a different insurance rate based on the spouse's employer's offerings?

My employer wants me to indicate to them whether my spouse can have insurance under her employer. If my spouse does have some kind of insurance offering at her company, they want to charge us $50 extra a month for health insurance based on this information.

This is a similar burden that some employers have attached to smokers, where if you admit to being a smoker your insurance gets an automatic fee. In this case, when the employee (me) chooses to include his/her family or spouse under his/her insurance, the employee is charged differently based on whether or not the spouse can have (not has, but can have) insurance under the spouse's employer

What right do they have to this information?

What other legal means do they have to find out this information?

Does this constitute illegal discrimination?

I am aware of similar policies regarding smoking which are similarly controversial. What conclusions can we draw from that precedent?

  • Comments are not for extended discussion; this conversation has been moved to chat. – jimsug Nov 14 '15 at 0:13

Is it legal for a company to offer a different insurance rate based on the spouse's employer's offerings?

Given the scenario you describe, your employer is not charging you a different rate if your spouse is eligible for insurance from your spouse's employer.

Under the Affordable Care Act, when an employer decides to provide health coverage to their employees there is no requirement to provide insurance to the employee's spouse.

Extending coverage to an employee's spouse carries additional cost to the employer. Many employers implement surcharges for those employee's spouses if coverage is otherwise available to the spouse. Essentially, when coverage is available to a spouse through their employer and they choose to be covered by their spouse's employer they are making a choice, one would presume, for better coverage. In this case, the employer is seeking to recover some of their cost for covering someone who would otherwise have coverage.

From this article dated January, 2014, you can see that many employers are moving in this direction. That article references an article regarding UPS. UPS is excluding any spouses from coverage if they would otherwise have coverage from elsewhere.

You ask what right do they have to this information [that your spouse has coverage available elsewhere]?

You are asking your employer to extend health coverage to your spouse, a benefit that your employer apparently provides. Your employer has the right to ask you information regarding that benefit extension you have requested. If you don't have a spouse or you aren't seeking to have your employer increase their benefit cost by extending coverage to your spouse then there is no reason for them to know if your spouse is covered.

What other legal means do they have to find out this information?

They should only be seeking this information because you've decided to ask them to provide a benefit to your spouse. If you were to lie about this information then they would have the same facilities available for any other fraudulent act to gain a benefit contrary to the employer's policy.

Does this constitute illegal discrimination?

Based on what? The employer is not required to extend the benefit to your spouse. The employer's policy for extending that benefit is to charge $50 for any spouse who could otherwise be covered by their employer. If you want the benefit then answer the question truthfully and, if your spouse is otherwise eligible for coverage, then pay the $50. If you don't want to answer the question then don't request the benefit.

I am aware of similar policies regarding smoking which are similarly controversial. What conclusions can we draw from that precedent?

What precedent, that it is legal to charge smokers more for health insurance? The Affordable Care Act allows insurance providers to charge up to 50% higher premiums for smokers.

Here's an article from the Society for Human Resource Management:

Most employers using a spousal surcharge require an employee who enrolls a spouse in the plan to pay the surcharge unless the employee can verify that the spouse is not eligible to enroll in his or her plan, is eligible but not allowed to participate for a particular reason, or is not employed.

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My initial thought is no, they can not ask anything like that. I would put the burden on your employer first, and ask them what legal right they have to know anything about your spouse's employer benefits. It's not legal to even ask if you have a spouse, same way it is not legal to ask your religion or sexual orientation.

If they refuse to give you any answer, I would not tell them anything about your spouse, where she works, or if she has any benefits at all.

At my company, which is a large hospital. I have my own benefits plan and I can add my wife if I wanted to during Open Enrollment, but I would pay a much higher rate overall. That is fine because they are more concerned with my health, as their investment in an employee/employer relationship. My wife's company is the same, one rate for her, and a different rate for her + spouse, and different rate for family plan as well. We compared and figured out it was actually cheaper for each of us to maintain our own benefits through our respective employers.

So if you just need to know can they you charge you more to add your spouse, the answer is yes. If they are basing that on whether or not your spouse has benefits from her employer, I would say no.

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  • 1
    My gut says you are right, but being right is not enough. I am aware that there are some parts to Obama care that allow this type of discrimination in other circumstances. What about presidents? Court decisions? What law would they be violating etc. Is there some other legal recourse? Where would be a good place to look for further legal advice? Knowing my employer as I do, going straight to them is worse than a waste of time, especially empty handed. I would want some substance behind the answer beyond a gut reaction. In other words: Why would you say no? – amalgamate Nov 11 '15 at 16:44
  • You can tell them your spouse and anything about them is none of their business, plain and simple. You may be required to give them an emergency contact, which most people with a spouse, would use that spouse, but there is no legal requirement whatsoever to use a spouse as an emergency contact. They also have no right to now if your spouse works or does not work. – ricka182 Nov 11 '15 at 19:10
  • Obummacare has nothing to do with it. You don't need to prove anything. If they don't like that and fire you, they have better have a documented reason to fire you and if have any email or written corresspondence proving they are asking illegal questions, you will have the upper hand in a court of law. I also suggest asking a local lawyer, most offer at least a 30-45 minute free consultation depending on circumstances. Or worst case, offer them $50 and be 100% certain either way. – ricka182 Nov 11 '15 at 19:10
  • Is there a type of law specialist with regards to health insurance? I believe these waters are quite murky. Also, This is in an "at will" state, I believe that makes it harder to put together a wrongful termination suit. I understand what you are saying, about Obama Care logically, but I still have a hunch that the entitlement that my employer feels comes from something in that law. – amalgamate Nov 11 '15 at 19:29
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    If you are talking about the US, it is in fact legal to ask about spouses, religion etc. It's illegal to base hiring decisions on the answer to these questions, so most won't ask, but the question itself is not illegal – YviDe Nov 12 '15 at 8:08

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