What Are The Drawbacks Of Treating My Spouse As An Employee
The principal cost of treating a spouse as an employee are the costs of any employee. These employee costs include:
- costs of employment taxes, including the amount of FICA tax that must be paid by your business.
- costs of providing employee benefits to your spouse, including costs for putting a spousal employee on the company health care plan.
Of course, these costs are deductible as business expenses by the company.
If your business is a corporation, consider the difference between your personal tax bracket and the corporate tax bracket when weighing the effect of hiring your spouse as an employee. In other words, look at the difference between the income to your spouse as an employee vs. costs to the corporation of hiring and paying.
A potential drawback may also be issues that arise in the event of a divorce. If your spouse is working in your company and you decide to divorce, check with your tax advisor and attorney about potential issues that may need to be resolved.
Buy Health Insurance On Your States Health Insurance Exchange
Thanks to the Affordable Care Act, you can buy a private, individual health insurance policy on your states health insurance exchange. If your health insurance exchange isnt having open enrollment when you lose your spousal coverage, dont worry. Losing the coverage you had under your spouse’s plan will make you eligible for a time-limited special enrollment period in the individual insurance market, on- or off-exchange . This special enrollment period is available even if you have access to COBRA continuation of your spouse’s coverage.
Adding A Newborn Child
If the mother of a newborn has MSP coverage, the easiest way to enrol the newborn in MSP is by completing the Electronic Birth Registration through the Vital Statistics Agency. When you complete the Electronic Birth Registration, the Vital Statistics Agency sends the babys information to HIBC through a secure communications network. HIBC will then process the application and determine the babys eligibility for MSP coverage. Learn more about adding your newborn child to your MSP account at the same time as you register his/her birth.
The opportunity to automatically enrol a newborn in MSP via the Electronic Birth Registration is offered in partnership with the Vital Statistics Agency. If you would like further information, please refer to the Enrolling your Newborn in the Medical Services Plan .
Can My Boyfriend Or Girlfriend’s Child Be Added To My Health Plan Does It Make A Difference If We Are Living Together
Colleen King, CEO of Colleen King Insurance Agency in Los Angeles, says some individual health insurance plans will allow unmarried couples to be on the same plan, along with any legal dependents, if they are all living together or there’s a court order for the one partner to provide insurance for their child.
“Group health insurance also may allow the same, but it may vary by carrier and by employer. In some states, employers have the option to not allow same or opposite domestic partners to be covered,” says King.
Some health insurers give employers the option of whether or not to require that the relationship is a registered domestic partnership, she adds.
Dependents For Taxes & Health Insurance
According to healthcare.gov, if you can count someone as a dependent on your taxes, theyre also a dependent on your health insurance plan. Whats more, you are required to provide health insurance for anyone whom you claim as a tax dependent. So if you intend to include a child or other relative as a tax dependent, you should also make sure theyre included in your health insurance plan.
Why The Period For Making Changes Is Limited
Most of the benefit plans offered through MIT are paid with pre-tax dollars. In exchange for that tax advantage, you are legally prohibited from enrolling in, canceling, or making changes to your medical, dental, and reimbursement account plans outside of the annual Open Enrollment period unless you experience a qualifying change in your life.
MIT’s policy for allowing changes outside Open Enrollment in the case of certain qualifying life events is consistent with the federal Department of Labor guidelines under the Health Insurance Portability and Accountability Act of 1996 .
Aging Out: Max Looks Forward To His 26th Birthday
Max is a graphic designer at a Philadelphia magazine. Though his employer offers health coverage, Max found it easier to remain on his parents’ health plan. But after he turns 26 in several months, he wont be eligible for his parents’ coverage anymore. Because aging out of your parents’ plan is a qualifying life event, Max can enroll in his employer’s plan the day after his parents coverage ends . He’ll now have to pay for his own coverage, but he’s glad he has access to quality health care.
Other types of health coverage loss include:
- Losing existing health coverage, including job-based, individual, and student plans
- Losing eligibility for Medicare, Medicaid, or CHIP
Keep Enrollment Cutoff Dates In Mind
If you want coverage sooner than later, plan to enroll as soon as possible after youre married.
- If you enroll through Washington Healthplanfinder, the deadline is the 23rd of themonth for coverage on the first day of the following month.
- If you enroll directly from Kaiser Permanente, youll have coverage on the first of the month if you make your plan selection by the last day of the previous month.
- If you wait until the end of your 60-day qualifying-event window to enroll in a plan, youll have coveragejust not as quickly as you might like or need.
What To Do With Insurance After A Divorce
Heres how family lawyers can approach life and health insurance upon a separation or divorce
- March 3, 2017April 24, 2020
This article has been updated to reflect corrections made by the authors. Go to the corrected section.
As clients lives get more complex, their divorces do, too. This is particularly the case when spouses are connected by assets like insurance.
Heres how family lawyers can approach life and health insurance upon a separation or divorce.
This Helpful Guide Explores The Qualifications For Domestic Partner Healthcare
In Wisconsin, recognition of domestic partnership is provided by law. One of the benefits of domestic partnership is the ability to cover domestic partners on one health insurance policy. However, insurance companies are not required to provide domestic partner health insurance.
Quartz has been offering coverage for domestic partners since 2010 on many plans. In most of these plans, domestic partners can enroll on the same health insurance policy simply by signing an affidavit that certifies both partners meet the requirements for domestic partnership:
1. Are at least 18 years of age and mentally competent to consent to a health insurance contract
2. Can be the same sex or opposite sex
3. Have lived together for at least six months prior to enrollment in the health insurance plan
4. Are not legally married to anyone else nor have another domestic partner
5. Are not related by marriage
6. Are not related by blood closer than permitted under the marriage laws of the State of Wisconsin
7. Have entered into the domestic partner relationship voluntarily, willingly and without reservation
8. Have entered into a relationship which is the functional equivalent of a marriage and which includes all of the following
- living together as a couple
- mutual support of each other
- mutual caring and commitment to one another
- mutual fidelity
- mutual responsibility for each others welfare
- joint responsibility for the necessities of life
Death In The Family: Lisa Starts A New Chapter
Lisa, 53, recently lost her husband, James, to a heart attack. Her friends have been great about checking in on her and lifting her spirits. Theyve also helped her update financial accounts and other practical matters. Before James’ death, for instance, Lisa was covered under his employers health insurance plan. Now, Lisa no longer qualifies for that plan.
In cases like Lisa’s, surviving spouses are entitled to COBRA coverage, but Lisa chooses another option. Since the death of a spouse is a qualifying life event, she can enroll in her employers health plan. Under her new coverage, she finds a counselor who helps her cope with her grief and look to the future with hope and gratitude.
Other changes in household include:
- Getting married or divorced
- Having a baby or adopting a child.
Requirements For Adding Your Children As Dependents
If you have children, theyre probably the first people that come to mind when talking about dependents. Generally speaking, you can include any child who fits the following criteria:
- Age: Your child has to be under the age of 26.
- Relationship to You: For a child to qualify as your dependent, he or she needs to be your biological child, your stepchild, your adopted child, or a foster child you are taking care of. If your child has other sisters, brothers, half sisters, half brothers, or children of their own, you can also include them on your health insurance plan.
- Length of Residency: A child only qualifies as your dependent if they have lived with you for at least six months.
- Income Contribution: Although your child can be your tax dependent while working and contributing to their own expenses, they cannot be their own primary source of support. This means a childs income must be less than half of the cost of their support expenses to qualify as your dependent.
- Tax Filing: A child cannot be your dependent if they file a joint tax return that year.
- Other Claims: A child cannot be claimed as a dependent by more than one household. So, regardless of your relationship, if someone else claims your child as a dependent, you cannot.
Should You Enroll Individually
Check to see if it costs less if each of you go on separate plans.
Also, some couples may have no choice but to enroll in separate health insurance plans as the Affordable Care Act rolls out. The new health care law has new requirements that affect the cost of insurance coverage. Your employer will be able to help you with those changes.
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Adding Families May Lower Rates For Everyone
Depending on the makeup of your workforce, adding employees’ families may diversify your coverage group in a way that lowers rates for everyone. For instance, if you own a hair salon and you employ primarily women in their 20s, your healthcare premiums may be higher due to the potential of pregnancy-related costs.
Including their spouses and children adds diversity to the group, helping to spread out the healthcare cost risks. When you have employees with similar risks in the same pool, diversification is going to give you a better financial advantage,” Dutta says. For that reason, its a smart move to obtain quotes both ways before making a decision.
Finally, consider that employees consider health insurance more important than any other benefit.2 Offering group health benefits is one of the best ways to show employees that you value them and their families — an important factor when it comes to retention.
About Group Health Benefits
An Income Or Circumstance Change That Makes You Newly Eligible For Subsidies Or Csr
If your income or circumstances change such that you become newly eligible or newly ineligible for premium tax credits or newly-eligible for cost-sharing subsidies, youll have an opportunity to switch plans. This rule already existed for people who were already enrolled in a plan through the exchange .
But in the 2020 Benefit and Payment Parameters, HHS finalized a proposal to expand this special enrollment period to include people who are enrolled in off-exchange coverage , and who experience an income change that makes them newly-eligible for premium subsidies or cost-sharing subsidies.
As of 2022, there will also be a special enrollment period for exchange enrollees with silver plans who have cost-sharing reductions and then experience a change in income or circumstances that make them newly ineligible for cost-sharing subsidies. This will allow people in this situation to switch to a plan at a different metal level, as the current rules limit them to picking only from among the other available silver plans.
What Is Domestic Partner Health Insurance
Domestic partner health insurance is when health insurance benefits are extended to a domestic partner, much like they often are to married spouses. Generally, this benefit will also extend to the domestic partners children.
Note that private employers do not have to offer health insurance to any employees. But if they do, they must follow federal, state, and local laws pertaining to whether domestic partners are eligible for health insurance benefits. In most cases, youll need to prove your domestic partnership to gain eligibility. This could be via registration in the local domestic partnership registry, an affidavit certifying your relationship, or other documentation. Insurance companies typically want you and your domestic partner to meet this criteria:
- You have cohabited for 6-12 months and intend to continue doing so.
- That neither of you is married or in a domestic partnership with anyone else.
- That you are unrelated by blood.
- And that you are financially interdependent.
Special Circumstance: S Corporation Owners
If you and/or your spouse own more than 2% of an S corporation, some of the benefits of “spouse as an employee” may not be available to you or they may be different.
Disclaimer: This article is intended to provide general information and is not intended to be tax or legal advice. Every situation is different, and tax laws change. Before you hire your spouse as an employee, discuss your specific situation with your tax and legal advisors.
Health Insurance Coverage For Spouse/employees
If your business provides health insurance coverage to employees, you may find it cheaper to cover your spouse as an employee rather than as a dependent under your coverage as an employee/owner.
The cost of company-paid premiums for your spouse’s health insurance is deductible to the company and your company’s payments are not considered wages and are not subject to Social Security, Medicare, or federal income tax withholding.
Are Kids Of Domestic Partners Covered Under Health Plans
If your health insurance plan says you are domestic partners, then you should be able to put your children on your plan, too.Â This can include any kids one or both of you are in charge of caring for, such as:
- Biological children
- Children you have legally adopted
What type of coverage you can get will depend on your plan. You can ask your health insurance plan administrator to explain what is and is not covered for your children’s healthcare.
If you have health insurance with a domestic partner, you should find out exactly how your children are covered. This way, you can avoid surprise bills when you take the kids to the doctor.
In most cases, when you fill out the forms for health insurance with your domestic partner, you will also fill out forms for any children the two of you care for. This should let you know what type of health coverage is offered for the whole family.
Health Insurance For Non
Depending on your new husbands or wifes situation, there are a few different options. That is the good news. There are, of course, bad news if you want to call them that. There are disadvantages to every decision and health insurance for non-US citizens is not immune.
One disadvantage is that the alternative health insurance plans do not meet the Affordable Care Act requirements. The insurance doesnt cover pre-existing conditions. Or, if it does, they limit coverage. But, if you purchase a policy before any diagnosis, the insurance covers your condition. So, dont delay. Anything can happen while you wait for that social security number.
Another disadvantage is that insurance does not cover pregnancy. We receive many phone calls from American men who are looking for health insurance for their new, non-US citizen spouse because she is pregnant. While you generally dont want to delay starting a family, know that the insurance does not cover the cost of pregnancy which could cost over $10,000. How will you pay? Likely by you. Alternatively, you can check your state Medicaid office to see if your state offers coverage for pregnant non-US citizens.
A final disadvantage is that these plans usually dont cover prescription drug medication, although there are other options such as a discount prescription drug card.
Now, you understand the importance of a health insurance plan before marrying a non-US citizen.
Consider Changing Your Tax Withholdings
When you add a family member to your benefits, you also may want to change your tax withholdings. You can do so using your online UCPath benefits account.
If you are adding your domestic partner or your partner’s children, the value of UC’s portion of your medical, dental and vision coverage for anyone who is not your tax dependent is considered imputed income and may be subject to FICA taxes, federal income tax and any other required payroll tax. Read more about imputed income.
Can You Ask Your Employer To Add Domestic Partner Benefits To A Plan
You can also ask your employer to add domestic partner benefits to your company’s health insurance plan. Your employer may be more open to the idea if you can show that having plans for unmarried partners isn’t more costly than having plans for married spouses.
The coverage for domestic partners can be added to most workplace health plans without too much trouble.
Employers And Domestic Partner Benefits
In the past, when a couple shared an insurance plan, they had to be married. Then, from 2000 to 2008, there was aÂ 15.7% increase in unmarried,Â opposite-sexÂ households.
Among young adults ages 18-24, living together without being married is now more common than living with a spouse. And 15% of young adults ages 25-34 lived with a partner they were not married to in 2018, up from 12% in 2008.
Employers and insurance companies evolved health benefits coverage over time to include domestic partners and offer coverage to more families.
Health Insurance For Unmarried Couples
Health insurance for unmarried couples is tough to compare because no two policies are alike. States have different rules about domestic partnerships that sometimes expand your options and other times it limits your options.
Be prepared to prove your domestic partnership with other information like shared bank accounts or proof of address. For more information, visit our blog for updates.
Coverage For The Children And Former Spouse*
The spouse who has health insurance is usually asked to keep the former spouse under the plan for as long as the plan allows, or until the spousal support obligation ends.
Many plans allow a former spouse to remain insured under the insureds health policy until a divorce is finalized. Other plans terminate coverage for a former spouse immediately upon a separation. Some high-end executive-type insurance policies may be more flexible, but still need to have the carriers underwriter approve any continuation of benefits.
Former spouses may have to apply for their own individual health insurance if their employer does not provide a group benefits plan. Discuss this with the former spouse well in advance of the coverage ending; generally, a non-insured spouses right to apply for coverage expires after 60 days of being removed from the insured spouses plan in order for them to have their pre-existing conditions covered under their new plan.
If the non-insured spouse has pre-existing medical conditions, some policies dont require medical information, but the premiums tend to be high and the coverage limited. If the former spouse is healthy, they may get better benefits by applying for individual coverage that does require medical information. This type of plan provides more coverage and options.
Where To Enroll: Nyu Benefits Resource Center
The Benefits Resource Center provides secure and efficient access to decision support tools and allows employees to make benefits elections, declare life events, designate life insurance beneficiaries, and more.
To access the Benefits Resource Center, login to NYUHome with your NetID and password credentials. Select the Work page, and click “Go” on the Benefits Resource Center card. Information and tools will help you:
- Compare NYU health plans and identify the optimal plan for you and your dependent
- Estimate anticipated total health care costs
- Estimate total out-of-pocket expenses for Flexible Spending Account contributions
- Contact health plan vendors
If I Get Married Can I Be Carried On My Parents’ Insurance
If you have health insurance, it’s usually no problem to provide added coverage for your spouse. With domestic partners, it depends on the employer. Many companies won’t grant your unmarried partner, straight or gay, the same benefits a spouse gets automatically. If you don’t know your company’s policy, ask your employer’s HR department for the facts.
Health Insurance Coverage For Spouses/partners
The Affordable Care Act has opened up a world of options for many Americans that either paid for expensive, insufficient health insurance or who were shut out of the health care system entirely. Likewise, the legalization of same-sex marriage has impacted how couples can meet eligibility requirements for their spouses employer-sponsored health insurance plans. With these newfound benefits have come added complexity in how health insurance is managed by employers and offered on the private market, and it is important to understand how they work so that you can make the best choice for yourself and your family.
Spousal health insurance plans
If one of you receives health insurance from your employer, while the other buys private insurance from a health insurance exchange, it may indeed prove cheaper to take advantage of the employer-sponsored plan. Again, check the costs of your polices against the cost of a family plan at your employer to make sure both the price and the coverage are better than what you are currently receiving.
Domestic partnership health insurance plans
Additional Information & Resources
What You Can Do Right Now
Spousal Coverage Not Required
Employers are not required to offer coverage to spouses. The Affordable Care Act requires large employers to offer coverage to their full-time employees and their dependent children. But there’s no requirement that employers offer coverage to employees’ spouses.
That said, the majority of employers that offer coverage do allow spouses to enroll in the plan. Some employers offer spousal coverage only if the spouse does not have access to their own employer-sponsored plan.
Whats Not Required To Add Your Children As Dependents
Besides keeping track of whats required to claim your child as a dependent, you should also remember what isnt required to claim a child as a dependent:
- Living with parents: Your child doesnt have to be living with you at the time you enroll them in your health insurance plan, provided theyve lived with you long enough to meet the residency requirement.
- Marital status: your child is still eligible for coverage if he or she is married or has children.
- Enrolled in school: it doesnt matter if your child is enrolled or not enrolled in school.
- Eligible for employer-based coverage: you can still add your child to your health plan even if they chose to not enroll in their employers health insurance plan.
- Tax status: you can add your child to your plan even if you dont claim them as a tax dependent.
As long as your children meet these other requirements, you can usually still include them in your coverage.
Why Health Insurance Before Marrying A Non
Before marrying a non-US citizen, you need to do a bunch of things. I wont list them all here because you can go to any immigration law website and find out.
That is right. You did not know that, right?
Here is something you do know: you know how important and expensive health insurance is here in the US, right?
Your spouse cant be on your health insurance until he or she receives her social security card, and essentially receives the green card. Of course, some foreigners can if they meet certain exceptions as defined by CMS.
Obtaining the green card usually 2 takes years, but it can be more. Dont be surprised.
So, once settled in, you need to figure out a health insurance plan for your new wife or husband. Better yet, start taking care of it now.
You dont want to wait. A sickness, illness, or injury can happen at any time. Moreover, we receive many phone calls from frantic US citizens feeling rushed to get this done. Dont wait so you can truly analyze the best option for you and your non-US citizen spouse.