There’s a new trend gaining steam with organizations considering Working Spouse Provisions, and it has slowed the adoption process of Working Spousal Surcharges and carveouts considerably.
About Working Spouse Provisions
Working Spouse Provisions went mainstream after the Great Recession. Sensational headlines and stories published by the New York Times, Wall Street Journal and more helped Working Spouse Provisions gain national awareness and propel the trend.
In 2011, only 6% of employers had a Working Spouse Provision in place. However, in 2015, 27% of large companies said they already had a working spouse rule in place with another 28% saying they expected to adopt a Working Spouse surcharge by 2018.
Most clients launch a Working Spouse Provision and only require an employee attestation at enrollment, with an average uptake of approximately 11% of spouses taking the surcharge, and an average monthly surcharge of $100.
The use of a third party specialist will raise the enrollment to around 30% and, in many cases, the increased annual revenue from the new spousal surcharge exceeds the cost of a comprehensive Dependent Audit (including the working spouse verification).
The Slowing Trend
Despite the effectiveness of Working Spouse Provisions and initial excitement, the 2016 NBGH survey revealed that only 33% of employers implemented a Working Spouse Surcharge, roughly the same as the previous year. And, of those who rolled out a Working Spouse Provision, only 10% adopted carveouts, and 90% implemented surcharges.
There are several influences behind the slowdown in adoption of Working Spouse Provisions:
- Annual health care cost increases remain at historic lows, although they continue to outpace inflation.
- High Deductible Heath Plans and other plan design changes shift the additional cost to employees, leading employers to search for solutions that do not add new costs.
- Some companies do not believe they have enough working spouses to justify the noise or morale impact of a Working Spouse Provision.
- Companies are taking extra time to evaluate the actual value of a Working Spouse Provision.
We see this trend in the types of RFPs we receive here at DSI. This year, RFP volume for Dependent Audits is higher than ever, but requests to include Working Spouse Audits has decreased.
Additionally, we’re now seeing another request, a Working Spouse Survey. It seems that groups are ‘looking before they leap’ by finding out how many employees actually have a working spouse before putting a provision in place.
What is a Working Spouse Survey?
A Working Spouse Survey is a very effective way to gather the data necessary to determine if and when to roll out a Working Spouse Provision. A thorough survey balances the fine line of data gathering without threatening to cost the employee more money, a growing concern every year.
10 Working Spouse Survey Best Practices
If you’re considering a Working Spouse Survey, here are ten important things to keep in mind:
- Don’t call it an attestation or affidavit.
- Don’t say you are considering a Working Spouse Surcharge.
- Make it required as part of Open Enrollment or a Spousal Eligibility Verification.
- Make it easy for employees to submit the survey using multiple methods (fax, email, web, mobile, and traditional mail).
- Be specific using as many checkboxes as needed. Include options for self-employed spouses, Medicare, and secondary insurance only.
- Be clear that you are only asking about medical benefits available elsewhere.
- Thoroughly communicate the survey due date.
- Incentivize employees to participate early.
- Prepare targeted internal reminders ahead of time (phone, email, or both).
- Prepare your vendor for outbound calls and appropriate follow-ups.
If you are considering the applicability of a Working Spouse Provision or you’re curious how much to charge, consider gathering information through a Working Spouse Survey as part of your next Dependent Audit.
With a reputable, employee sensitive firm like DSI, your survey (and your Dependent Audit) will quickly get the results you’re looking for without negatively impacting your team’s morale.