Current law requires most employers to offer medical coverage to their full-time employees. This means many more spouses and registered domestic partners have health care coverage available at their own place of work. When USC provides coverage to working spouses or partners who have other coverage available, this creates higher costs for employees and USC alike. We want to make sure coverage is available to those who need it most. So USC, like many large employers, has added a working spouse surcharge.
USC believes that all employers should be equally responsible for paying the medical plan costs of their own employees. By continuing to provide primary healthcare coverage for working spouses, USC is subsidizing other employers’ healthcare costs, which is not our intent. This surcharge is to help absorb the cost for healthcare that USC is incurring instead of your spouse’s employer.
To avoid paying the surcharge, your spouse or partner can enroll in his or her employer’s medical plan. You’ll want to compare coverage and total costs both ways to see what makes sense for your family.
Does the surcharge apply to you?
If your spouse/domestic partner’s employer offers medical coverage and you choose to provide him/her coverage under a USC plan, you’ll pay a $100 per month working spouse surcharge. The surcharge is deducted from your paycheck on a pre-tax basis. The surcharge does not apply to dental or vision plans, but only medical.
However, the surcharge does not apply if your spouse:
- Is not employed
- Works at USC
- Is covered by Medicare, Medicaid, Tricare, Tribal health insurance, or other state assistance programs
- Is covered under COBRA
- Works but is not eligible for medical coverage through their employer
- Works but the employer’s medical plan charges 100% of the cost to the employee (includes self-employed individuals)
- Loses job-related medical coverage
During benefits enrollment, all employees enrolled in a USC medical plan covering a spouse will be asked to indicate if spouse has coverage through their own employer. If you are a covering a spouse and you do not answer that question, the surcharge will be applied to you.
Special situations
- If you cover your spouse initially, but later your spouse enrolls in their own employer’s plan, contact the HR Service Center within 31 days of the spouse’s new enrollment to get your surcharge discontinued.
- If your spouse isn’t working now but gets a job that offers coverage, and you decide to keep him/her on the USC medical plan, the surcharge will begin the month s/he becomes eligible for the new employer’s coverage. Contact the HR Service Center to report that coverage has become available to your spouse.
- If your spouse is currently covered by his/her own employer plan, but loses his/her job, or has hours reduced and loses eligibility for coverage, contact the HR Service Center. Your spouse can enroll in a USC medical plan within 30 days of his/her employment change; the surcharge will not apply.
- If your spouse is currently enrolled in a USC plan and has waived coverage through their own employer, but now wishes to enroll in their own employer’s coverage to avoid the surcharge, please contact your spouse’s employer for help. Your spouse will likely be able to enroll in their employer’s medical plan due to what’s called a qualified change in status.
- If your spouse’s employer has a different plan year than USC and their enrollment period is over, IRS rules will likely allow enrollment due to the qualified change in status, so long as the change is made within 30 days of dropping coverage. Your spouse should contact their employer for help. However, if your spouse’s employer has a different plan year and does not allow for this change, the surcharge will not apply until your spouse’s new plan year begins. At that point, if you choose to continue covering your spouse you must update your attestation in Workday within 30 days of the start of your spouse’s plan year.
- The working spouse surcharge is in addition to the normal medical plan premium. You must indicate during open enrollment whether your spouse or partner has employer-sponsored coverage available. If you don’t take action during benefits enrollment, you’ll pay the surcharge if your spouse or partner is on a USC plan.