It’s no secret that healthcare costs are on the rise. In light of this, you may be wondering if it makes sense for you and your spouse to have separate health plans.
There are a few things to consider when making this decision. First, what type of coverage does each of you need? If one of you has a chronic illness or condition that requires regular treatment, it may make more sense to have a separate plan that covers those costs.
Second, how much can you afford to pay in premiums? If you’re healthy and don’t require much in the way of medical care, you may be able to get by with a less expensive plan. However, if you or your spouse has significant health needs, it may be worth paying more for a comprehensive plan.
We explain the rules that apply to spousal coverage, and the questions that you should ask before deciding if you and your spouse should or can be on the same health insurance policy.
Considering Out-of-Pocket Expenses
First, before you decide, you need to consider the total out-of-pocket expenses for whatever health plan or plans that you are considering.
In 2022, the upper limit for out-of-pocket costs is $8,700 for an individual and $17,400 for a family. For 2023, these upper limits will increase to $9,100 for an individual and $18,200 for a family.
The family out-of-pocket limit only applies to family members who are covered under a single policy.
If the family is split up into multiple plans, such as employer-sponsored insurance or individual market coverage, the family out-of-pocket limit will apply separately to each policy.
For example, if a family opts to have one spouse on one plan, and the other spouse on a separate plan with their children, each plan has an out-of-pocket limit, and the total expenses will be higher than if the entire family was on the same plan.
Healthcare Needs
Another consideration is your and your spouse’s healthcare needs. If one spouse is healthy and the other has chronic medical conditions or significant healthcare needs, the best financial decision may be to have two separate policies.
The healthy spouse might choose a lower-cost plan with a more restrictive provider network and higher out-of-pocket expenses, while the spouse with the medical conditions might have a higher-cost plan with a larger provider network but lower out-of-pocket costs.
Depending on the circ*mstances, some families may pick separate plans based on specific medical needs.
This isn’t always the case though. Especially if one spouse has access to an employer-sponsored plan that will cover both spouses with a reasonable premium.
Employer-Sponsored Health Insurance
Roughly half of all Americans are covered under an employer-sponsored plan and if both spouses work for employers that offer coverage, they can each be on a separate plan.
If the employer offers spousal coverage, the couple can decide whether it makes sense to be on the same plan or to have their own plans.
But there are several things to keep in mind when deciding:
Spousal Coverage is NOT Required
Employers are not required to offer coverage to spouses. The Affordable Care Act (ACA) requires that large employers with 50 or more workers offer coverage to their workers and their dependent children, but not their spouses.
However, the majority of employers allow spouses to enroll in the plan, while some only offer spousal coverage if the spouse does not have access to their own employer-sponsored plan.
Family Glitch
Under the ACA, the coverage that is offered by employers to their full-time employees must be affordable, or the employer can incur financial penalties. The affordability determination is based on the cost of the employee’s premium, regardless of the costs to add any dependents or a spouse to the plan.
This is called the “family glitch” and results in some families facing significant costs to add a family member to their employer-sponsored plan, and also being ineligible for subsidies.
The good news is that in 2023, the Biden administration plans to fix the family glitch so some families will be eligible for premium subsidies in the marketplace.
Spousal Surcharges
Some employers add surcharges to the premiums for spouses if the spouse has the option to sign up for insurance through their own workplace instead.
If your employer does this, the total costs will need to be considered to see whether it is better to have both spouses on the same plan or to have each spouse use their own employer-sponsored plan.
Individual Health Insurance
If you purchase your own health insurance, you’re considered to be in the individual market. You have the option of putting both spouses on one plan or you can select two different plans.
- You can pick separate plans even if you have premium subsidies.
- To qualify for subsidies, married couples must file a joint tax return, but they don’t have to enroll in the same insurance plan.
- Your total subsidy will be based on your household income and will be applied to the policies that you select.
For now, if one spouse has access to an employer-sponsored plan, but the other chooses to buy an individual plan instead of being added to their spouse’s plan, no subsidies are available to offset the cost of the individual plan.
Learn More > Newlyweds: How to Change Your Health Insurance
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