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For years, the Crawford & Co. benefits department had noticed a trend: Health care costs for employees' spouses were running considerably higher than those for employees.
So in 2006, Crawford made what Bonnie C. Sawdey, the company's vice president of human resources, described as a “pretty tough” decision: The company would no longer cover employees' spouses when the spouse's employer offered coverage and paid a portion of the premium.
“Our thought process was that any spouse who had access to subsidized coverage — meaning that his or her employer paid a percentage of the cost of coverage — would not be eligible under our plan,” Ms. Sawdey said.
To minimize the impact, though, the exclusion applied only to new employees.
Seven years later, in the wake of the passage of the 2010 health care reform law and the costs increases Crawford faced from complying with various Patient Protection and Affordable Care Act provisions, the company took another look at spousal coverage and whether it should broaden its exclusion.
For example, once the act's individual mandate kicked in, requiring individuals to have health insurance or pay a penalty, Crawford expected more employees would opt for coverage.
“Historically, we've had fairly high opt-out rates under our medical plan — about 23% — and we feared that this would change due to the individual mandate,” Ms. Sawdey said.
So effective in 2013, Crawford extended its spousal coverage exclusion provision to current employees; coverage would be offered only if spouses were not covered under another employer's plan.
“We felt it was the right thing to do for the company and for employees to reduce our overall costs,” Ms. Sawdey said.
Employees have a stake in such reductions because they pay a portion of the plan's premiums, Ms. Sawdey said.
Specifically, employees seeking to cover a spouse in a Crawford health care plan would first have to sign an affidavit that the spouse was not eligible for coverage from his or her employer.
Employees would continue to have the option to decide in which plan — Crawford's or the spouse's — their children would receive coverage.
In 2013, the first year the expanded spousal exclusion took effect, 280 spouses were removed from Crawford's coverage rolls, and the number of covered spouses has decreased by about 80 per year since then, Ms. Sawdey said.
When employers move to high-deductible consumer-driven health care plans, one risk is that employees — because they are footing more of the cost — will delay preventive services that could spot medical problems early, before they develop into conditions that are far more expensive to treat.