More Employers Reducing Health Benefits for Spouse and Family

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The Affordable Care Act (aka Obamacare) has dramatically changed the healthcare market place, and it is also changing employers’ perspectives on providing health benefits. A new report from research firm Towers Watson focuses on ongoing changes in employer health benefits practices. Selected highlights from the 2014 Towers Watson Health Care Changes Ahead Survey include:

  • Eight in 10 companies (81%) plan to make moderate to significant changes to health benefits programs for full-time active workers.
  • By 2017, 63% of employers will add surcharges or exclude spouses from coverage when employer-sponsored health coverage is available elsewhere.
  • Two-thirds of CEOs and CFOs will be more directly involved in health care strategy decisions than they were three to five years ago to help control costs and reduce exposure to the 2018 excise tax.


Statement from Towers Watson

“Health care coverage for spouses and dependents is a charged topic,” said Randall Abbott, a senior consultant for Towers Watson. “Historically, virtually all large employers have offered and subsidized it, but it’s expensive. As employers seek to manage their expenditures, a growing number are rethinking their willingness to cover a working spouse who has a health benefit option elsewhere. The emphasis has been on increasing employee contributions or introducing surcharges, with a small percentage of employers actually excluding working spouses from coverage altogether.”


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Other results of interest from the survey

Other results of note from the Towers Watson “Health Care Changes Ahead” survey include:

  • Employers’ interest in private exchanges for active employees continues to grow, but many await additional evidence that this model can deliver more value than their traditional self-managed program.
  • Employers will use technology as a pivotal tool in strategies to boost employee engagement and improve access to health care



Earlier health benefits survey results

Another Towers Watson/National Business Group survey undertaken earlier this year provides more insight into the actions employers are taking regarding health benefits today. Highlights from the survey include:

  • 49% of employers increased employee contributions for spouse and dependent coverage at a faster rate than for individual employee coverage.
  •  24% implemented spouse coverage surcharges in 2014 of about $100 per month or more when other coverage was available to the spouse. These surcharges increased the cost of spouse coverage for employees by $1,200 a year, on average, and at the high end, by more than $2,000 a year.
  • 2% offered no subsidy at all for spouse coverage.

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