Brokers delivering renewal quotes, and employers opening them know the feeling: staring at the number, hoping it's a typo, wishing someone would just move the decimal one or two digits to the left.
HR is stuck between a rock and a hard place. They have to sell finance on the value of the benefit itself, while employees just want to know what next year is going to cost them.
Brokers are burning the midnight oil trying to find new ways to contain costs and keep the client, all while their actual mandate covers the employee's coverage, not the spouse's. They're still on the hook for the group's total cost either way.
Most companies and brokers are living this exact problem right now. Something has to give.
Group health plans were built for one kind of household: one job, one paycheck, one health plan. Nothing about the design has caught up since. Here's the number that never gets its own line in a renewal: about 30% of enrolled employees have a working spouse with coverage of their own. That same 30% accounts for roughly 40% of total plan cost. The design assumption is decades out of date.
Enter the spousal HRA.
What is a spousal HRA and how does it work?
A spousal health reimbursement arrangement (HRA) (sometimes called a spousal incentive HRA) reimburses an employee's family for the coinsurance, copays, and deductibles they pay on a spouse's employer-sponsored plan.
Healia calls its version of this the Total Care Option, or TCO. It covers up to 100% of what a family pays out of pocket on the spouse's plan: an easy decision for the employee, a cheaper one for employers.
Employers fund the HRA. The family can spend it on out-of-pocket medical expenses on the spouse's plan. If they don't spend it all, neither do Healia’s customers. If employees don't enroll, employers owe nothing.
What a $5,000 deductible means for families
Here's the story that never makes it into a renewal deck. A $5,000 family deductible looks like real coverage on paper, but recent surveys found more than half of working Americans can’t cover a $500 emergency expense. For those families, a $5,000 deductible and a $5 billion deductible are functionally the same number: both out of reach. Coverage a family can't afford to use isn't coverage. It's a line item.
A spousal HRA closes that gap. Families stop rationing care around a deductible they were never going to hit, and they stop making one of the biggest financial decisions of their year with no one in their corner.
Spousal HRA vs. other ways to manage spousal costs
Most employers have already tried something: a surcharge here, a carve-out there, a deductible bump nobody enjoyed announcing. Most solutions act as a bandaid instead of addressing the real issue. Here's how the common approaches compare.
Employers who haven't made a move yet aren't standing still: the cost of waiting compounds every renewal.
Why the math works: the 40% problem
Dual-income households usually have two paths to coverage: their employer’s plan, or a working spouse's plan. Employers built their benefits strategy around the first path, but nobody asked about the second path. So, families stay on the employer’s plan by default, and the employer pays full price either way.
There are roughly 30 million dual-income households in the US today, and about 30% of enrolled employees are in a dual-income household themselves. One might expect a cost problem of that size to show up somewhere obvious. It doesn't. It just sits inside an employer’s total spend, unnamed, until someone finally asks why a third of an employer’s population is driving 40% of the employer's cost. A spousal HRA turns that invisible math into a number employers can actually act on.
Plan design decides how many people enroll
Enrollment isn't automatic. The HRA amount is the difference between a benefit employees notice and one they file away and forget.
Employers who fund the HRA near the ACA's out-of-pocket maximum, $21,200 for family coverage in 2026, see roughly 2.5 times the enrollment of employers who offer a flat credit, like $8,000. That cost difference is immaterial to finance, but it moves enough high-cost claimants off the plan to pay for itself several times over.
The amount dedicated to medical expenses isn't the only lever. Whether it reimburses premium on the spouse's plan, not just out-of-pocket costs, matters just as much. Employers who add premium reimbursement to the design see enrollment climb from 8% to 12% in year one, and 12% to 32% by year two: a 2 to 4x lift over a design that only covers medical expenses. Same pattern as the HRA amount: cover more of what moving actually costs a family, and more families enroll and the more the employer saves.
What one employer saved
An industrial distribution company rolled out the Total Care Option for the first time. In year one, 37 families enrolled.
Average savings per family: $7,053. Separately, the employer kept $383,000 in net savings that same year: a 6x return on what it paid for the program.
A national medical equipment provider had significantly more enrolled families: 363 families enrolled in year two, a 4.5x increase over the roughly 80 families enrolled the year before.The company's net savings amounted to $2.5 million that same year, a 7x return on the program, and it cut its combined stop-loss liability from $174 million to $4.5 million.
An enterprise ecommerce company posted $164,454 in net savings in year one, a 3.8x return, and an average of $4,510 saved per family.
"Healia has been really great for our employees. Utilization has been strong, the experience has been seamless, and the return on investment has been impressive for our finance team," says the company's Strategic Rewards Partner.
And the success stories don’t end here.
Frequently asked questions
Does this work for self-funded and fully insured employers?
Both. Self-funded employers remove high-cost households from their claims exposure entirely, which helps protect stop-loss costs. Fully insured employers spend less than what they would have had the household been enrolled; plus, their risk pool improves for renewal rerating, since the carrier isn't pricing in those claims anymore. The mechanics are identical either way: the spouse's plan becomes primary, and the employer’s plan carries less risk.
Is this the same as paying employees cash to waive coverage?
No. A cash opt-out payment is taxable income, and the employee gets it whether or not they have any medical costs that year. This benefit only pays out against real medical expenses, and the reimbursement itself is tax-free. Cash incentives also tend to attract the healthiest employees first, which is a polite way of saying that employers pay to lose the people who were never going to cost much anyway. The Spousal HRA targets the households actually driving the employer’s cost.
Should we pair this with our own spousal surcharge or carve-out?
That's optional. Healia doesn't require a surcharge or carve-out to offer this HRA on its own. Some employers add a surcharge on their working-spouse population, or a carve-out that moves spouses off the group plan entirely, then pair it with the HRA so employees have somewhere to go. That combination tends to increase how many eligible households switch. Others prefer an incentive-only approach with no surcharge at all. Healia can model either one.
Does enrollment in the spousal HRA cause adverse selection?
Participation tends to skew toward higher-cost, dual-eligible households, since they have the most to gain from switching. The HRA is also a capped, pay-as-you-go reimbursement, so higher utilization among enrollees never turns into open-ended liability for employers. It also means the households leaving are the highest-cost dual-eligible families, not the healthiest employees, so the risk pool remaining on an employer’s group plan actually improves. That's the reverse of what happens with a cash opt-out, where the healthiest employees are usually the ones who leave.
Does this meet ACA requirements?
Yes. This type of HRA is required to integrate with a group health plan that provides major medical coverage, and the spouse's plan fills that role. Employees attest to having qualifying spousal coverage before they can file a claim. Coverage like Medicare, Medicaid, ACA marketplace plans, and TRICARE doesn't qualify.
What does it cost to offer this?
Healia charges a flat monthly fee for enrolled households only. No setup fees, no minimums. If nobody enrolls, employers don't pay anything, which is either the easiest pricing model in benefits or the most honest one. Possibly both.
Review the numbers
Healia runs a savings analysis from three inputs: the benefits booklet, enrollment by coverage tier, and cost per tier. There's no census to hand over and nothing to commit to upfront. If nobody enrolls, employers don't pay anything.
Schedule a call with our team at support@healiahealth.com. Bring the numbers. We'll bring the math.