A Spousal Surcharge is an additional fee added to the employee’s contribution for a medical plan if they want to cover their spouse. Typically, this fee only applies when the employees spouse is working and already covered or eligible for health insurance through their own employer.
When an employer decides to offer and allow spouses to enroll in their benefits package, they are assuming a higher risk of claims which can have the potential to increase medical premiums for all employees. By collecting a surcharge from employees who want to cover their spouse, they can alleviate this potential financial risk.
Employee Navigator allows users to completely customize their client's unique Spousal Surcharge Policy and apply it to any medical plan offering.
Important Note! Spousal Surcharges were not intended for use in collecting personal health history. The use of surcharges to collect Protected Health Information (PHI) or other medical history is a HIPAA violation.
Spousal Surcharge Setup
From the Benefits tab > Basic > select Surcharges.
Select Add to add a new policy for the company.
Select the type of surcharge you would like to build. Each Type has variations of the primary configuration options.
Important Note! Currently, the only supported Surcharge Type is Spousal Surcharge. Stay tuned for more Surcharge options including Tobacco in the future.
Enter a Name or label for the surcharge you're creating. Surcharges are pulled into the plan level by Name.
Enter an optional policy description. The surcharge policy description will be shown to employees with spouses who are presented with the surcharge questionnaire. It can also be access by all employees any time under "Helpful Resources" in enrollment flow. The description is meant to provide employees with the fine details that define their potential for an added fee.
E.g. ABC Company has implemented a monthly surcharge fee of $50 if you elect to cover your spouse who has medical coverage available through his/her employer. If your spouse does not have other medical coverage available through his/her employer, you must submit this affidavit annually to confirm your spouse does not have access to other medical coverage under an employer-sponsored group health plan. For more information on what ABC Company considers "eligible", Contact HR.
Add a custom question that will be presented to the employee during enrollment to determine if this surcharge will apply. The question will only present to employees who have a spouse and choose to enroll them.
E.g. Is your spouse eligible and/or enrolled in medical coverage?
Use the Add Answer button to add the answers associated with the custom question. By default, employees can select 1 answer in enrollment flow.
E.g. My spouse is employed and eligible for group health coverage through his/her employer
E.g. My spouse is unemployed or ineligible for group health coverage through his/her employer
E.g. My spouse is employed at this company and will be waiving coverage
Enter the fee associated with each specific answer. The fee should be a monthly figure. If the answer waives the surcharge fee, enter zero or leave the value blank.
Note! Surcharges can also be waived for any individual employee in enrollment flow. See more details under Enrollment below.
Check off the option to require a custom Attestation in enrollment flow. An Attestation will be presented to the employee after saving their election and will require their agreement to continue, much like the existing function of plan level Disclosures.
Customize an optional attestation agreement for the employee to acknowledge after enrollment.
Important Note! Reporting for Attestation agreements is not currently available.
Don't forget to Activate the spousal surcharge before saving in order to pull the active policy into the plan level.
From the Medical plan > Costs > Surcharges > use the drop-down menu to select the active surcharge by name, then select Add.
Active spousal surcharge questions are only presented to employees who have selected their spouse and a plan.
Surcharge fees are added to the employees cost after they select their answer.
- Employees can never pay more than the total plan cost. If the surcharge fee puts the employee's cost at an amount greater than the total plan cost, the surcharge fee will be reduced to ensure that the contribution does not exceed the total plan cost
- Employer contribution on the plan will never be applied to the surcharge
Important Note! Surcharges are not currently supported in conjunction with Defined Contributions.
Employees can change their answer by selecting Cost adjustment question under "View/change my answers" in the Enrollment Questions panel that is surfaced on the enrollment page after the initial answer is saved.
HR and Admin users will also have the option to view the employee's answer and check off the option to "Waive surcharge fees" on an individual basis as an exception.
For more information on surcharge reporting, check out on article on the Surcharge Adjustments Report.
Changes, Recalcs, Open Enrollment, and FAQ
- Employee Navigator is giving our users the flexibility to edit, inactivate, and delete a surcharge or surcharge configuration options after employees enroll. We will let you know if there are active enrollments/answers associated with a surcharge, but understand that if a change is made that fundamentally alters what the employees originally acknowledged, it is the responsibility of the Admin to notify employees of this change outside of Employee Navigator as soon as possible.
- Rate recalculation has been built in to certain changes in the event that bad data was configured before employees started answering the surcharge questionnaire. For example, if a surcharge fee is entered for an answer that should have waived a fee, you can edit the fee and Save to kick off a rate recalc for all plans. This logic also applies when a surcharge policy is inactivated from the Credits & Surcharges setup page or the plan.
- Surcharge questions will be re-asked during OE to allow the employee to reassess their spouse's current eligibility situation.
- Important Note! Spousal Surcharge Questions are not currently supported during an "Add Dependent" Life Event. If an employee adds their Spouse due to a Life Event, the benefit administrator will need to input their answer on their behalf.