Should You and Your Spouse Have Separate Health Insurance Plans?

Spouses tend to be covered on the same health insurance policy. But that's not always possible, nor is it always the option that makes the most sense.

This article will explain the rules that apply to spousal coverage and the questions you should ask before deciding whether or not you and your spouse should—or can—be on the same health insurance policy.

Out-of-Pocket Exposure

Families need to consider the total out-of-pocket exposure of whatever health plan or plans they have or are considering. The Affordable Care Act (ACA) imposed an upper cap on total out-of-pocket costs (for in-network treatment of essential health benefits), which is adjusted for inflation each year by the Department of Health and Human Services.

In 2024, the upper limits on out-of-pocket costs are $9,450 for an individual and $18,900 for a family plan. (These limits do not apply to grandmothered or grandfathered health plans, or to plans that aren't regulated by the ACA, such as short-term health insurance).

For 2025, the upper limits on out-of-pocket costs will decrease (for the first time) to $9,200 for an individual and $18,400 for a family plan.

So if a family opts to have one spouse on one plan and the other spouse on a separate plan with the couple's children, each plan will have its own out-of-pocket limit, and the total exposure could be higher than it would be if the whole family were on one plan.

Note that Original Medicare doesn't have any cap on out-of-pocket costs, and this didn't change with the Affordable Care Act. Original Medicare enrollees need supplemental coverage—either a Medigap plan, a Medicare Advantage plan, or coverage from a current or former employer—to limit out-of-pocket costs.

Healthcare Needs

If one spouse is healthy and the other has significant medical conditions, the best financial decision might be to have two separate policies.

The healthy spouse might choose a lower-cost plan with a more restrictive provider network and higher out-of-pocket exposure, while the spouse with medical conditions might want a higher-cost plan that has a more extensive provider network and/or lower out-of-pocket costs.

This won't always be the case, particularly if one spouse has access to a high-quality employer-sponsored plan that will cover them both with a reasonable premium. But depending on the circumstances, some families find that it's prudent to pick separate plans based on specific medical needs.

Implications for Health Savings Accounts

If you have a Health Savings Account (HSA) or are interested in having one, you'll want to be aware of the implications of having separate health insurance plans.

In 2024, you can contribute up to $8,300 to a health savings account if you have "family" coverage under an HSA-qualified high deductible health plan (HDHP). Family coverage means at least two members of the family are covered under the plan (i.e., anything other than "self-only" coverage under the HDHP). If you have an HSA-qualified plan under which you're the only insured member, your HSA contribution limit in 2024 is $4,150. (These limits are updated annually by the IRS, and tend to increase each year.)

It's important to understand that although HDHPs can provide family coverage, HSAs cannot be jointly owned. So even if your whole family is on one HDHP and making the family contribution amount to a single HSA, it will be owned by just one family member.

If you and your spouse want to have your own HSAs, you can each establish one and split the total family contribution between the two accounts. However, this isn't necessary in order to have the money available for each spouse. Although HSAs are not jointly owned, you're allowed to withdraw money to cover medical costs for your spouse or dependents, just as you can for your own medical costs.

If one of you has an HSA-qualified plan (with no additional family members on the plan) and the other has a health insurance plan that isn't HSA-qualified, your HSA contribution will be limited to the self-only amount.

Employer-Sponsored Health Insurance

Roughly half of all Americans get their health insurance from an employer-sponsored plan—by far the largest single type of coverage. If both spouses work for employers that offer coverage, they can each be on their own plan.

If the employers offer coverage to spouses, the couple can decide whether it makes sense to have their own plans, or add one spouse to the other's employer-sponsored plan. But there are several things to keep in mind when you're deciding the best course of action:

Spousal Coverage Not Required

Employers are not required to offer coverage to spouses. The Affordable Care Act requires large employers (50 or more workers) to offer coverage to their full-time employees and their dependent children. To avoid a penalty, the coverage has to be considered affordable for the employee. But there is no requirement that the coverage for dependents be considered affordable. And there's no requirement that employers offer coverage to employees' spouses.

That said, the majority of employers that offer coverage do pay the majority of the cost of family coverage and do allow spouses to enroll in the plan.

However, some employers offer spousal coverage only if the spouse does not have access to their own employer-sponsored plan. Others will only allow a spouse to enroll in secondary coverage if they're eligible for their own employer's plan. In that case, the spouse can only get primary coverage from their own employer's plan.

Family Glitch Fix

Under the ACA, the coverage large employers offer to their full-time employees must be considered affordable, or else the employer faces the possibility of financial penalties. However, employers are not required to ensure that coverage for spouses (or dependents) is affordable.

And through 2022, families could not access premium subsidies in the exchange/Marketplace, even if their offer of family coverage from an employer was unaffordable. This was because the affordability calculation was based only on the cost of the employee's coverage, but it then applied to the whole family.

This was known as the family glitch. It meant that some families faced significant costs to add the family to the employer-sponsored plan, but were also ineligible for subsidies in the exchange.

The good news is that the Biden administration implemented a fix for the family glitch as of 2023, making some employees' families newly eligible for premium subsidies in the marketplace.

However, other families may still find that their total premium costs are higher than they expected. Under the family glitch fix, affordability levels are determined separately for the employee and the rest of the family.

This could result in the employee using the employer-sponsored plan while the rest of the family qualifies for subsidies in the Marketplace—which might not be as high as they expect—if the employee is on a separate plan.

Employers Often Bear Costs

But many employers do pay the lion's share of the cost to add family members, even though they're not required to do so. In 2023, the average total premiums for family coverage under employer-sponsored plans was $23,968—roughly $2,000 per month—and employers paid an average of nearly 73% of that total cost.

But the amount the employers pay varies considerably depending on the size of the organization; smaller firms are much less likely to pay a significant portion of the premium to add dependents and spouses to their employees' coverage.

Spousal Surcharges

Some employers add surcharges to the premiums for spouses if the spouse has an option for coverage at their own workplace. In 2022, about 5% of employers charged an additional surcharge, on top of the regular premiums, if an employee's spouse had an option for coverage from their own employer but rejected it and opted to be covered under their spouse's plan instead.

If your employer does this, the total cost will need to be taken into consideration when you crunch the numbers to see whether it's better to have both spouses on the same plan, or have each spouse use their own employer-sponsored plan.

These are questions you'll want to address with your human resources department during your initial health plan enrollment period and your annual open enrollment period. The more you understand about your employer's position on spousal coverage (and your spouse's employer's position), the better equipped you'll be to make a decision.

Individual Health Insurance

If you buy your own health insurance, either through the health insurance exchange (also known as the health insurance Marketplace) or outside the exchange, you're in what's known as the individual market (sometimes called the individual/family market). You have the option of putting both spouses on one plan or selecting two different plans.

You can pick separate plans even if you're enrolling in the exchange with premium subsidies. To qualify for subsidies, married enrollees must file a joint tax return, but they don't have to be on the same health insurance plan. The exchange will calculate your total subsidy amount based on your household income and apply it to the policies you select.

You'll reconcile the subsidies on your tax return the same way you would if you had one policy covering your family, and the total subsidy amount you receive will be the same as it would if you were together on one plan.

The amount you pay in premiums will be different, however, since the total pre-subsidy cost for the two plans will likely be different from the total pre-subsidy cost to have both spouses on one plan.

You can also choose to have one spouse get an on-exchange plan and the other an off-exchange plan. This might be something to consider if, for example, one spouse is receiving medical treatment from providers who are only in-network with off-exchange carriers.

But keep in mind that there are no subsidies available outside the exchange, so the spouse with an off-exchange plan will pay full price for the coverage.

And it's also important to understand how premium subsidies work in that scenario. The spouse with exchange coverage is still eligible for subsidies based on the total household income and the number of people in the household. However, the total subsidy amount could be considerably lower than it would have been if both spouses had enrolled in a plan through the exchange.

Government-Sponsored Health Insurance

In some cases, one spouse might be eligible for government-sponsored health insurance, while the other is not. Some examples include the following:

• One spouse turns 65 and becomes eligible for Medicare, while the other is still younger than 65. Even once both spouses are eligible for Medicare, all Medicare coverage is individual, rather than family. Each spouse will have separate coverage under Medicare, and if they want supplemental coverage (either via a Medicare Advantage plan that replaces Original Medicare, or Medigap and Medicare Part D to supplement Original Medicare), each spouse will have their own policy. (It's common for Medigap insurers to offer a discount if both spouses enroll through the same insurer, but these are still two separate policies.)
• One spouse is disabled and qualifies for Medicaid or Medicare, while the other does not qualify for these programs.
• A pregnant person may qualify for Medicaid or CHIP (guidelines vary by state), while their spouse does not.

When one spouse is eligible for government-sponsored health insurance, the other can continue to have private health insurance. This sort of situation might change over time.

For example, someone who is pregnant might no longer qualify for Medicaid or CHIP after the baby is born and may need to return to a private health insurance plan at that point. (The amount of time that postpartum Medicaid/CHIP coverage lasts varies from state to state but has been extended to 12 months in most states.)

Summary

There are numerous reasons spouses may have separate health insurance. This can be due to coverage offers from employers, eligibility for government-run programs like Medicaid or Medicare, or just personal preference.

There's no one-size-fits-all in terms of whether spouses should be on the same health insurance plan. In some cases, they don't have access to the same plans, and in other cases, it's advantageous for them to have separate plans, for a variety of reasons.

If you and your spouse are considering your health insurance options, you may find it helpful to talk with a health insurance broker or with your HR representatives at your jobs, to determine what approach will best suit your needs.