If you are a two-earner couple, each of you probably has a long list of your own company's benefit options to sort out and choose from. And each of you may be covered under your spouse's company plan. To minimize your cost and obtain sufficient coverage from these benefits, it is important that you evaluate the features and the associated costs of both sets of benefits packages. Make a comparison chart for each type of benefit, listing cost (such as deductibles and copayments), features, and other relevant information. Take your time and evaluate each benefit thoroughly. Remember to put together the package that is best for your current situation as well as for your future needs.
Most companies provide employees with a variety of benefits. These generally include medical insurance, dental insurance, and other health and welfare benefits. To obtain these benefits, employees usually have to pay some portion of the cost, typically on a pre-tax basis, which lessens the cost. You probably are able to change your benefit options and the dependants you are covering under the plan only during an annual enrollment or when you have a qualified family status change. Because you and your spouse may have annual enrollments at different times of the year, you should identify the enrollment periods of each company plan to ensure that there is no gap in coverage for you and your family.
If you're married and each of you are covered separately on your own employer's plans, should you be covered as a dependent on your spouse's plan?
It's typically not necessary to pay for additional coverage when you may not get reimbursed under more than one plan, or the reimbursement from the second plan wouldn't be large enough to justify the additional premium costs. Whether or not the second plan pays and how much, depends on the form of Coordination of Benefits (COB) the employer is required or chooses to use.
In most cases, you must submit your bills to your employer's plan first. After the primary plan pays, you can submit your bills to your spouse's plan. But your spouse's plan may pay very little or nothing at all. If your child is covered on both plans and both plans follow the birthday rule, the plan with the spouse whose birthday falls earlier in the year will be considered the primary plan. If both plans do not follow the birthday rule, the father's plan will typically be considered the primary plan.
If you're covered under your employer's plan and your spouse is self-employed or doesn't have coverage, should your spouse consider having his or her own individual medical coverage? The answer is probably no: Pick him or her up on your plan. It is likely the most affordable, and generally, the most comprehensive way to get coverage.
Your first question should be: Is the cost of coverage for your spouse in your company plan a good deal?
Here are some things to think about when making this determination:
Tax Considerations Regarding Your Employee Benefits
Be sure to take these tax-related factors into consideration when deciding on a benefits plan:
Other Factors Affecting Your Decisions on Employee Benefits
Before you come to a final decision on what plans to use, there are some other non-monetary factors that may affect your decision.
* COBRA coverage extends existing health coverage for a period of time following the termination of employment.