The Spouse’s Other Coverage Has to Be Real
A spousal incentive HRA is designed for employees whose spouses have access to their own employer coverage. The spouse has to actually be enrolled in that other coverage, and the plan should say how that is shown.
What to know.
The plan should require proof of the spouse’s enrollment, such as a card or an enrollment confirmation, and should say what happens if the other coverage ends during the year.
The employer sets the reimbursement budget and applies it on uniform terms. Check how the arrangement fits with your group plan design before offering it.
Where to look next.
Spousal Incentive HRA Overview
How the plan works end to end.
Spousal Surcharge
A related plan design option.
FSA and HRA Plan Setup
How these accounts are set up.
Documenting the other coverage without over-collecting.
The goal of the proof requirement is to confirm that the spouse really has other coverage, not to collect more personal information than needed. A copy of an insurance card or an enrollment confirmation usually does the job, and the plan can ask for it again at renewal or when coverage changes. Record who reviewed it and when.
Plan the mid-year events too. If the spouse’s coverage ends, the employee should tell the employer promptly and the plan should say what happens to the reimbursement. Because HRA rules interact with the group plan design and with other federal requirements, have your advisor and counsel confirm how this fits before you offer it.
Common questions on this topic.
Four questions to settle before you rely on it.
What proof of other coverage do we collect?
A card or an enrollment confirmation, collected each year.
What if the spouse’s coverage ends?
The plan should say the reimbursement ends with it.
Can we vary the amount by employee?
Only on uniform terms for similarly situated employees.
Does it need to be integrated with a group plan?
Often yes. Ask us how it applies to your plan.
How often should we ask for proof of the spouse’s coverage?
At enrollment and at each renewal is common, along with any time the employee reports a change. The plan document should state the schedule.
What if the spouse switches to a different employer plan mid-year?
The plan should treat that as a change to report. What happens to the reimbursement depends on the plan terms, so spell it out in advance.
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General information, not legal or tax advice. Plan-specific questions belong with your counsel or CPA, and we will bring them in.
Related guides.
Spousal Incentive HRA
The overview this page belongs to.
Compliance Services
How CFH supports the compliance side of your plans.
Spousal Surcharge
A related plan design option.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
Employer-Provided Health Plans (26 U.S.C. 105)
Rules for amounts received under employer health plans.
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