What Is a Spouse Surcharge in Insurance?

An employer that sponsors an affordable health insurance plan for its workers assumes a significant portion of the costs. Covering employee spouses adds to those costs if those premiums are subsidized as well. As a result, you might be required to pay a spouse surcharge to cover your working spouse under your employer-sponsored health insurance plan. The spouse surcharge means the employee pays more to cover a spouse who has other options for health insurance coverage.

The spouse surcharge applies when a working spouse has access to a comparable group health insurance on her job and chooses not to enroll in that plan. The surcharge amount -- such as $30 or $50 per pay period – acts as an incentive for spouses to enroll in their own employer's health care plan and allows the company to defray some of the costs of subsidizing the policy so it can continue to allow enrollment for spouses who need coverage.

Each employer decides under which circumstance it will cover spouses or apply the spouse surcharge. Employers often restrict spousal coverage without payment of a surcharge to unemployed spouses, or working spouses whose employers do not offer health insurance. Many extend coverage surcharge-free if the plan offered by the spouse's employer fails to meet specific standards, such as maximum amounts for the premium and deductible.

Some employers waive the surcharge if the spouse enrolls in both employer plans and his employer's plan is primary. The spouse surcharge also might not be applied if the spouse is eligible for Medicare or another government –sponsored health insurance plan. Employers usually waive the spouse surcharge temporarily if the spouse cannot enroll in her employer's plan until the next open enrollment.

An employee who wants coverage for a spouse under her employer-sponsored health insurance plan must actively enroll the spouse each year during open enrollment. The plan will not automatically re-enroll a covered spouse. Annual enrollment includes an affirmation process that requires employees to read and agree to certain statements about enrollment of a spouse. The employee affirms that she intends to enroll her spouse, that the spouse does not have access to insurance through his job or that the insurance falls short of specific affordability standards. After the affirmations, the enrollment process includes warnings about misrepresentations and reminds employees of the requirement to report changes that affect the spouse's coverage.