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I speak to dozens of brokers and employers every week, and the refrain is consistent: something has to give. Employers are struggling to sustain the cost of providing rich benefits, while employees are feeling the squeeze in their paychecks as their share of premiums keeps going up.
This is what leads brokers and employers to connect with Healia. They want to find novel solutions to make healthcare more affordable for employees and more sustainable for their business.
A spousal HRA gives employees another way to access coverage through a spouse's health plan, with the potential for providing up to 100% reimbursement of eligible healthcare expenses.
A broker emailed me this summer about a group that had just gone live. They were over the moon because 14 households in the first year of the Total Care Option (Healia’s spousal HRA) were responsible for $2.5M in claims from the previous year.
Those 14 families were provided another coverage option that worked for their households, and their employer was able to support that decision with a meaningful healthcare benefit. At the same time, the financial impact for the employer was significant.
It's what makes spousal HRAs different, and it's why I am such a believer in what we do here at Healia.
Subtraction by addition
I'd be remiss if I didn't point out a quote from the great Andy Bernard of NBC's The Office: "addition by subtraction." We're basically flipping it on its head here.
But, I digress.
A spousal HRA is simple. You give employees another option for how their family gets covered: they can enroll in a spouse's group health plan, and the employer helps cover their eligible healthcare expenses through an HRA.
That can include deductibles, coinsurance, and copays, and the spousal HRA can also be designed to reimburse premiums. Employers can also choose to expand eligible expenses under IRS Section 213(d).
The result: employees get more help paying for healthcare, and employers create an opportunity to spend less.
And this isn't a benefit that requires everyone to participate to have an impact. Roughly 30% of enrolled employees have access to coverage through a working spouse, and those households typically represent about 40% of total healthcare costs.
For those families, the spouse's plan may be the better fit: lower premiums, better coverage, or simply a better match for what their household actually needs. A spousal HRA gives them a reason to take a closer look.
This is precisely what happened with the 14 households above. They chose another coverage option, and their employer was able to support that decision with a benefit that ultimately had a material financial impact.
For employers, the math is compelling. You don't need to change the benefits experience for everyone to create meaningful savings. A relatively small number of households making a different coverage choice can have a meaningful effect on overall healthcare costs.
For self-funded employers, there can be an additional benefit. A self-funded employer pays its employees' medical claims directly, rather than paying a fixed premium to an insurance carrier, and typically carries stop-loss insurance as a backstop against unusually expensive claim years. When employees and their families move to other group coverage, their medical bills stop running through the employer's plan altogether, which can reduce overall claims exposure and potentially lower stop-loss exposure as well. The exact impact depends on the group's population and plan design.
And for fully insured employers, moving eligible households to other coverage can reduce the amount the employer is spending to cover those households and create savings that can be put back into the broader benefits strategy.
That's the idea behind "subtraction by addition." You're not taking a benefit away. You're adding an option that can make healthcare more affordable for employees while making the overall benefits strategy more sustainable for the employer.
What we're hearing from employers and brokers
Over the past year, we've had a lot of conversations about what happens once you actually put a spousal HRA in front of employees. A few things come up again and again.
Employees are asking for ways to improve their healthcare benefits.
For some families, the spouse's plan is simply a better deal. It might have lower premiums, better coverage, or both. The problem is that knowing another plan might be better and actually figuring out whether it's better are two very different things. Closing that gap is exactly why we provide free access to the Decision Support Tool (DST).
Open enrollment feels different when you're adding something.
Most benefits teams aren't exactly walking into open enrollment with a long list of good news. Premiums are up. Deductibles are up. Networks change. Employee contributions go up.
Adding a new benefit doesn't solve all of that, but it gives HR something positive to talk about. And a spousal HRA can be a meaningful one. Depending on the plan design, eligible out-of-pocket costs can be reimbursed up to 100%.
Voluntary matters.
One of the first questions employers ask is how the program will look to employees. Nobody wants employees thinking they're being pushed off the company's plan.
Healia doesn't require employers to implement a working spouse surcharge or carve-out. Some employers do choose to use one alongside a spousal HRA, while others don't. Either way, communication matters: employees should understand what their options are, what each option costs, and what the HRA covers before they make a decision.
The DST makes the comparison much easier.
This is one of the questions we hear most often from employees: which option is the least expensive for my family? That's a harder question to answer than it sounds. Employees have to compare premiums, deductibles, coinsurance, out-of-pocket maximums, and the specifics of their family's healthcare needs. Most people aren't doing that analysis for fun (except the tried-and-true masochists).
Healia's DST lets an employee upload their spouse's benefit documents and creates a comparison with their available options. The AI processes the plan information first, and Healia's operations team completes its review within about 4–6 business hours on average.
The goal is simple: give employees enough information to make an informed decision without making them become health insurance experts first. At the end of the day, the decision is theirs.
The four questions brokers ask us
A lot of the brokers we talk to are hearing about spousal HRAs for the first time. Brokers are already familiar with HRAs; they've been designing and explaining them for years. What's different here is the application: using an HRA to give employees a financial reason to consider a spouse's plan, rather than just funding out-of-pocket costs on the company's own plan.
What about adverse selection?
This is usually the first question I hear on calls. If the employees who benefit most from the HRA are also the employees driving the most cost on the plan, aren't you intentionally selecting against your own plan?
That's actually the point of the strategy. A spousal HRA is designed to appeal primarily to medium- and high-cost households, because those employees have more to gain from having their eligible healthcare costs reimbursed.
How is this going to look to employees?
An employer can love the economics and still be worried about how the program will be received. Nobody wants employees thinking, "My company is paying me to leave its health plan."
Which is why education matters so much. Healia recommends starting communication 2–4 weeks before open enrollment and using multiple touchpoints, including webinars, Q&As, one-on-one meetings, and decision support.
Is it fair to employees who don't have a working spouse?
A spousal HRA isn't useful to every employee. That's worth acknowledging rather than trying to talk around it.
The broader question is whether the savings generated by the program create enough value across the overall benefits strategy to make it worthwhile. It's a conversation each employer should have with its broker and benefits team.
Who's actually going to run this?
This one is less philosophical. Benefits teams are busy; they don't need another vendor creating work for them.
Healia handles the spousal HRA administration and claims process, and clients don't need to pre-fund the account. Healia pays approved claims and invoices the employer at the end of each week.
Spousal HRA mythbusters
Here are the objections we hear most often, along with the answers.
"Adverse selection will hurt my plan."
The households most likely to enroll in a spousal HRA are also more likely to have higher utilization. Dual-eligible families have the most to gain from moving to a spouse's plan, so they're naturally the ones who act.
Because reimbursement only happens against claims employees actually submit, higher usage from these households never turns into an open-ended bill. You're paying for real expenses as they occur, up to a cap, not underwriting a guess.
The result flips the usual "adverse selection" story on its head. The families leaving your plan are often the ones driving higher costs, which means the risk of your remaining group decreases. Compare that to a cash opt-out, where it's typically your healthiest, lowest-cost employees who take the money and walk, leaving you with a higher risk pool.
"This will look like we're pushing spouses off our plan."
It doesn't have to. A spousal HRA can be offered without a spousal surcharge or carve-out, and employers can structure the benefit around their own workforce and goals. Some employers do pair the HRA with a surcharge or carve-out because they find that combination effective. Whatever the design, employees should understand that the HRA is there to give them another option, not simply take one away.
"My employees will think we're cutting benefits."
This is actually one of the easiest myths to bust, because the facts are on your side: no existing benefit goes away. A spousal HRA is net new, an additional coverage option layered on top of what employees already have.
It's also completely voluntary. No employee is required to move, and the ones who do are opting in because it's a better fit for their household. There's no cost of entry: accessing the HRA doesn't pull a single dollar out of anyone's paycheck.
All that to say, in my experience, you can't over-communicate something this complex, especially when it touches healthcare decisions for someone's whole family. That's why clear, repeated messaging matters so much during open enrollment, and it's exactly what Healia's webinars, Q&As, one-on-one meetings, decision support, and employee education materials are built for.
"My team doesn't have room for another vendor."
And with Healia, they don't need to make room. Healia handles the HRA administration, claims processing, education, technology, and ongoing support.
The program is pay-as-you-go. Employers don't pre-fund the HRA or maintain a reserve account. Healia pays approved claims and invoices the employer at the end of the week, and unused HRA dollars remain with the employer.
Implementation can be completed quickly, although Healia recommends going live 2–4 weeks before open enrollment so employees have time to understand the benefit. File feeds aren't required; employers can also upload enrollment data through Healia's secure portal.
"How quickly are claims processed?"
Healia reviews claims daily and processes 95%+ within two business days, with most processed within one day. Reimbursements are issued through ACH.
The claims process is also designed to be simple for employees. They can submit an EOB, provider bill, or prescription receipt through the mobile-friendly portal, and the system extracts the information needed to process the claim.
What happens next
That broker called the first group a test case. Six months in, the results were good enough that he was already thinking about which other clients could benefit.
That's usually how it goes: one employer tries it, someone pulls the claims data, and the conversation shifts fast from whether this actually works to which other groups should be looking at it next.
If you've got a client who's looking for unique solutions to manage costs and is eager to take a proactive approach to employee benefits, a spousal HRA is worth looking at.
Healia can run a savings analysis using three things: the client's benefits and plan design, enrollment counts by plan and coverage tier, and employer costs by family tier.
Send me those numbers and we'll show you what the economics could look like for your group. And for what it’s worth, I believe in the strategy enough that I’m a Total Care Option enrollee myself.
Ask me about a spousal HRA.