As healthcare costs continue to rise year over year, employers are increasingly searching for cost-management tools that don’t compromise the quality of benefits or employee satisfaction. One strategy gaining traction among mid-size and large employers is the spousal surcharge—a policy designed to share the financial burden when an employee’s spouse has other insurance options.

While potentially sensitive, this approach is completely justified when applied thoughtfully. With the right communications, structure, and empathy, spousal surcharges can be an effective lever to control costs, ensure fairness, and encourage responsible plan enrollment.

What Is a Spousal Surcharge?

A spousal surcharge is an additional monthly fee imposed on employees who choose to enroll a spouse in the employer’s health plan despite the spouse having access to other coverage, typically through their own employer.

There are two common variations:

1. Hard Surcharge (Spousal Exclusion):
   Spouses with access to other employer-sponsored coverage are not allowed to enroll at all.
2. Soft Surcharge:
   Spouses can enroll but must pay an extra monthly premium (e.g., $50–$150/month) if they have other coverage options available.

Why Employers Are Implementing Spousal Surcharges

The intent behind the surcharge is not punitive—it’s financial and actuarial.

1. Managing Plan Costs

Spouses tend to incur higher claims costs than employees or dependent children. According to the Kaiser Family Foundation, average annual employer health plan costs are $7,500–$9,000 per spouse.

When a spouse has access to another employer-sponsored plan but joins your plan instead, you’re effectively subsidizing another company’s workforce—an increasingly unsustainable burden.

2. Promoting Fairness

Spousal surcharges shift some financial responsibility back to those who have other choices, promoting a sense of equity. Employees whose spouses have no other coverage remain fully eligible, but those double-dipping across employers may be asked to share more of the cost.

3. Encouraging Smarter Enrollment Behavior

Many employees simply default to enrolling a spouse out of habit or convenience. A surcharge encourages employees to evaluate coverage options more thoughtfully, possibly choosing the most cost-effective plan for the household.

Justified, but Delicate: Handling the Policy with Care

Spousal surcharges are legally permissible—but culturally sensitive. Employees may feel singled out or penalized, especially in dual-income households. The success of your policy hinges on how it is implemented and communicated.

Here are key ways to do it right:

Step 1: Clearly Define the Policy Scope

Start by defining eligibility criteria. Common parameters include:

• Does the spouse have access to employer-sponsored coverage (excluding retiree plans or COBRA)?
• Will the surcharge apply only to medical coverage, or to dental/vision as well?
• What documentation or attestation is required?
• Will the surcharge be a flat dollar amount or percentage?

Tip: Avoid complexity. Keep the rules easy to understand and administer.

Step 2: Communicate Transparently—and Compassionately

Your messaging should highlight fairness, stewardship, and the shared goal of maintaining a sustainable, high-quality plan for all employees.

Sample framing:

“To help control rising healthcare costs and preserve our ability to offer strong benefits for all employees, we’re aligning our plan with market best practices by introducing a spousal surcharge for spouses who have access to other employer-sponsored coverage.”

Avoid any language that implies blame or distrust. This is about financial fairness, not personal judgment.

Step 3: Use a Simple Spousal Coverage Attestation Process

The most common method is a spousal affidavit or attestation form during open enrollment. Employees must confirm whether their spouse has access to another plan.

Make the form clear and accessible, and be transparent about the documentation (if any) required. Many employers accept the honor system but reserve the right to audit if abuse is suspected.

Step 4: Determine the Surcharge Amount

Benchmark against industry norms. According to Mercer’s National Survey of Employer-Sponsored Health Plans:

• The average surcharge is $100 per month, but ranges widely from $50 to $200+
• Over 30% of large employers now use a spousal surcharge
• Some employers tier the surcharge based on salary or plan tier

Choose an amount meaningful enough to influence behavior, but not so high that it feels punitive.

Step 5: Coordinate with Payroll and Benefits Systems

Ensure your HRIS and payroll systems can:

• Capture the spouse attestation data
• Apply the surcharge correctly based on responses
• Reassess status annually during open enrollment

Make sure the change is reflected in Total Rewards statements and explained clearly in benefits materials.

Step 6: Make Exceptions Where Appropriate

Show flexibility in cases such as:

• Spouses who are unemployed or self-employed
• Retiree coverage that doesn’t meet minimum value
• Financial hardship cases (e.g., recently laid off spouse)

Many employers include an appeal process to handle these edge cases with empathy and legal caution.

Legal Considerations

Spousal surcharges are legal under ERISA and the Affordable Care Act (ACA), as long as they are applied consistently and don’t discriminate based on gender, age, or disability.

Key compliance checks:

• ACA Affordability Test: Surcharges on dependents do not affect ACA affordability calculations, which focus only on employee-only coverage.
• Nondiscrimination Rules: Be consistent across similarly situated employees to avoid issues under IRC Section 125 or 105(h).

Always review your surcharge policy with legal counsel or your benefits broker.

Measuring Success: How to Track ROI

To evaluate the effectiveness of a spousal surcharge, track the following metrics over time:

• Enrollment trends (how many employees drop spousal coverage)
• Medical claims cost reductions
• Total plan enrollment and premium spend
• Employee feedback or complaints

Even modest enrollment shifts can yield six-figure savings annually for mid-size employers.

Final Thoughts: Financially Smart, Socially Sensitive

Spousal surcharges aren’t about penalizing families—they’re about preserving the financial integrity of your employee benefits program. When implemented with care, they can help employers:

• Control runaway healthcare costs
  Promote fair coverage use
  Ensure long-term benefits sustainability

But the key is empathy. Clear communication, thoughtful policy design, and flexibility for exceptions will ensure that the strategy is seen not as a cut, but as a necessary step to protect what matters most: your people and your plan.