In an effort to offset rising insurance costs, and in part as a response to the Affordable Care Act going into effect, some employers will begin requiring their employees to pay an additional fee for their spouses’ healthcare coverage, or will eliminate that coverage entirely.
Some companies, such as UPS, have decided to exclude spouses from their employer-sponsored health plans beginning in 2014 if those spouses have access to health insurance through their employers. Experts suggest this as a reasonable cost-cutting measure for a couple of reasons: one, covered spouses are more likely to be women, who use the health system more through middle age and therefore cost more; and two, the employer mandate will shift those costs by requiring the spouses’ employers to offer affordable coverage.
Another factor for companies’ consideration is the pending “Cadillac tax”, which will add a further 40 percent tax to premiums above established ceilings for individual and family coverage. While the tax does not take effect until 2018, large companies are working to lower their spending now in preparation. Important to note is that restricted coverage will not affect spouses who do not have coverage through an employer, nor will it impact minor dependents on employees’ plans.
The percentage of companies who plan to eliminate or charge for spousal support is in the single digits, and several studies cited by the Department of Health and Human Services suggest that it will remain a minority plan of action. In addition, the NY Times cites Mercer senior health consultant Barry Schilmeister as claiming this type of action would “not…be a popular move among employees.”
PRN Funding can help healthcare companies seeking a cash flow alternative to scaling back their health coverage. Healthcare factoring is available for vendors filling a variety of healthcare roles, including temporary nurse staffing, medical billing, and home health care. By purchasing invoices for service and advancing immediate cash, PRN’s factoring program provides the flexibility your company needs to provide the right kind of health coverage for your employees.