Sara Watson joined her husband’s health insurance plan last month because, in part, she thought it would be less expensive.
Maybe not.
The Georgia Board of Regents approved a proposal at its August meeting to impose a monthly $100 surcharge on employees whose spouses choose not to join the health insurance plan provided by their own employer. The fees, proposed by the University System of Georgia, take effect in January. About 4,800 employees may be impacted, University System officials said. Domestic partners are not covered under state health insurance plans, system officials said.
Health insurance costs for employees have more than tripled in the past two decades, according to the Kaiser Family Foundation, and employers have looked for different ways to cut those costs, such as this type of surcharge.
Watson’s husband teaches at a University System school and is exploring her options. The couple married in March. Watson declined to name her husband, who she said did not want to be interviewed.
She and some University System employees and spouses believe the changes are a wrongheaded approach to curb health care costs. They believe health insurance premium increases for all employees should cover the increase for spouses. Faculty leaders are hoping to convince the system to rethink the new fees.
“I felt like it was an attempt to punish working spouses,” said Watson, 32, who lives in Chatham County. “I feel like it’s a deterrent to get people off (the University System’s) insurance.”
University System officials said the surcharge and other cost increases are necessary to cover a 6% increase, about $47 million, in the health care budget this fiscal year, which began July 1. Officials stressed there is no cost if the spouse’s employer does not offer health insurance. The estimated savings for this change is $5.5 million, University System officials said.
“With projected increases higher this year than the past few years, the … University System Office sees this as the most equitable option to keep overall healthcare costs lower for those that do not have other employer healthcare options available to them,” officials said in a frequently asked questions for employees they shared with The Atlanta Journal-Constitution.
More businesses are exploring ways to lower costs to provide health care for employee spouses. The University System said 38% of private sector companies apply a spousal surcharge if the spouse has access to coverage through another employer. A report by the National Business Group on Health, which represents the interests of large companies on health care issues, said 33% of large employers imposed a $100 monthly surcharge this year, up from 20% in 2013.
Penn State University and the University of Southern California are among the schools with a $100 monthly surcharge for working spouses, Georgia officials noted. Purdue University in Indiana is cutting working spouses from its plans to save money, according to news accounts.
Matthew Rae, associate director for Kaiser’s Program on the Health Care Marketplace, wondered how effective such changes are in reducing employer costs and what impact it has on spouses. The average American worker paid more than $5,500 in 2018 toward their employer health care plan, about 58% more than they did a decade ago, Kaiser’s research shows.
“$1,200 a year is a significant chunk of money” for many families, Rae said.
Clayton State University professor Mark Watson, unrelated to Sara, said the change is a burden for employees at smaller University System schools. The average salary in 2018 for a tenured Clayton State professor was slightly above $87,000, about 50% less than for all tenured system professors, state data shows.
“Our salaries are not that high, so these types of changes hit us harder.”
Clayton State has about 7,000 students. Twelve of the 26 system schools had larger enrollments last fall.
If they decide not to pay the fees and use their own company insurance, some spouses may have to change their doctors for chronic problems if the physician they used under the system’s plan isn’t in their employer’s plan, said Mark Watson, a member of the University System’s faculty council. At its October meeting, the faculty council plans to discuss the matter and brainstorm how to convince the system to make changes.
University of North Georgia professor John O’Sullivan is worried about the surcharge for several reasons.
“Will ‘does your spouse work and get health insurance’ become a new litmus test for employment in the first place?” asked O’Sullivan, who teaches environmental studies and sociology.
Meanwhile, Sara Watson said she and her husband are unsure what they’ll do about the impending increase. They’ll likely pay the surcharge, she said, by cutting back on some discretionary spending. Sara Watson said she took a pay cut at her current job because she likes the work.
“I guess we’ll look at our budget and take it from elsewhere,” she said. “I know I can’t not have it.”
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