Personal Finance

Just got married - combined health benefits?

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  • Oct 12th, 2014 6:51 pm
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Newbie
Dec 4, 2007
68 posts
61 upvotes

Just got married - combined health benefits?

Hi,

I got married two weeks ago. Now we are trying to figure out if it is worthwhile to declare each other as dependent (spouse) for extension of coverage of our health benefit to each other. By doing that, our monthly contributions will also increase. I work for the federal government and she works for the Vancouver School Board. My health benefit is only average. My wife's health benefit package is superior.

Also, I make around $70000 and she makes $47000. Why would we pay less tax if we file our tax jointly?

Thanks.
11 replies
Deal Addict
Aug 17, 2008
4128 posts
946 upvotes
Sask.
Congrats!
You each need to declare yourselves as married for your insurance, you aren't single anymore. You'll be able to make a claim on one, then what isn't covered on that one, you may be able to claim on the other's insurance.
Regarding tax, there is no joint filing - you each file your own tax forms, but report one another's income - and figure out which benefits each claims by income level and circumstances.
Deal Fanatic
Apr 23, 2009
5161 posts
708 upvotes
South of Ottawa
natalka wrote: Congrats!
You each need to declare yourselves as married for your insurance, you aren't single anymore. You'll be able to make a claim on one, then what isn't covered on that one, you may be able to claim on the other's insurance.
Regarding tax, there is no joint filing - you each file your own tax forms, but report one another's income - and figure out which benefits each claims by income level and circumstances.
OP can chose to have a coordination of benefits, or him and his wife can chose one of the plans and opt out of the other.
Deal Addict
Jan 30, 2012
1836 posts
1399 upvotes
TORONTO
cyberguy69 wrote: Why would we pay less tax if we file our tax jointly?
As natalka pointed out, there is no joint filing with CRA - you just list your spouse on your tax return.

You are allowed to transfer certain types of income & deductions to your spouse. Since your spouse makes less than you, it might be advantageous for her to hold taxable investments instead of you. You might want to talk to an accountant or financial planner.

But generally speaking married people pay more in tax than two single people.
natalka wrote: You each need to declare yourselves as married for your insurance, you aren't single anymore.
It's not mandatory - if they are happy with their current benefits & costs there is no need to cover the spouse under each other's plan. (unless the benefits package has a clause saying that you must accept any other coverage you are eligible for)
Member
Mar 31, 2013
396 posts
84 upvotes
Toronto
M8Rxmjsik wrote: As natalka pointed out, there is no joint filing with CRA - you just list your spouse on your tax return.

You are allowed to transfer certain types of income & deductions to your spouse. Since your spouse makes less than you, it might be advantageous for her to hold taxable investments instead of you. You might want to talk to an accountant or financial planner.

But generally speaking married people pay more in tax than two single people.
Married people certainly do not, generally speaking, pay more in taxes than two single people. As you said in the sentence before, there can be some small advantages to having a lower income spouse. However, if you compare two married people vs two single people (with exact same incomes/investments/credits/etc), there is no possible scenario where the single people pay less. There are scenarios were the single people pay the same.
Deal Addict
Aug 17, 2008
4128 posts
946 upvotes
Sask.
I stand corrected on the insurance - obviously it depends upon the policy, soz.
Deal Addict
User avatar
Oct 31, 2007
3648 posts
800 upvotes
Just run the numbers on the health benefits and check the coverages. When my wife and I got married it was cheaper and with better coverage for me to add her (and now our kids) onto my group plan and opt out of hers. She was also paying an arm and a leg for a small amount of life insurance which she also opted out of and put it into a stand alone life insurance policy. Really depends what you each pay and what is covered in your situation though.
Deal Fanatic
Aug 25, 2005
5485 posts
2762 upvotes
In most cases, it'll be cheaper to go for the family/spouse plan on one side and decline/minimal plan on the other unless you are expecting major health related expenditures in the year.

Without knowing the exact dollar figures, it does sound like you should go for the family plan on your wife's company plan and decline your company's insurance plan.

(surprised to hear that the VSB has a better health plan than feds)
Deal Addict
Jan 30, 2012
1836 posts
1399 upvotes
TORONTO
K1Toronto wrote: Married people certainly do not, generally speaking, pay more in taxes than two single people. As you said in the sentence before, there can be some small advantages to having a lower income spouse. However, if you compare two married people vs two single people (with exact same incomes/investments/credits/etc), there is no possible scenario where the single people pay less. There are scenarios were the single people pay the same.
http://worthwhile.typepad.com/worthwhil ... bate-.html
http://www.advocis.ca/forPublic/tax-twosome.html
http://www.moneysense.ca/taxes/romantic ... t-tax-time

And the big one is that two single people can shelter two principal residences from capital gains tax.

Income splitting can be used in some scenarios, but not all: http://www.theglobeandmail.com/globe-in ... e19937684/

This RFD thread was complaining about this exact issue:

http://forums.redflagdeals.com/common-l ... es-561452/
Jr. Member
Oct 10, 2014
176 posts
27 upvotes
Toronto, ON
M8Rxmjsik wrote: As natalka pointed out, there is no joint filing with CRA - you just list your spouse on your tax return.

You are allowed to transfer certain types of income & deductions to your spouse. Since your spouse makes less than you, it might be advantageous for her to hold taxable investments instead of you. You might want to talk to an accountant or financial planner.

But generally speaking married people pay more in tax than two single people.



It's not mandatory - if they are happy with their current benefits & costs there is no need to cover the spouse under each other's plan. (unless the benefits package has a clause saying that you must accept any other coverage you are eligible for)
I have to agree it's not mandatory. The one thing you do have now is a 'Life Event' that will generally allow you to change your benefit election without any proof on good health. Obviously you both work for bigger employer, so it may be more flexible, but i have seen cases where couples tried to change there status later (mainly because one's benefit cost had been increased so much so couple one one side, and opt out was better) and the employer+insurer refused without full medical, since it no longer was within 31 day of a defined Life event.

oh and the opposite would also apply, if you opt out from one and suddenly the plan you were both in is not as attractive (benefit cuts, cost increase, etc.) the plan you opted out from would not consider this a reason to allow you to change your election without proof of good health (i have seen that happened a few times)
Deal Addict
Jul 21, 2005
2087 posts
1134 upvotes
Alberta
My benefits were much better than my wife's so we opted out of hers and added her on to mine. Co-ordination of benefits is a little bit painful to do since you have to submit to one, then to the other and all that, wasn't worth the cost for us as she had to pay for her benefits at work, and the difference we had to spend any given year that wasn't covered by my policy was not as much as her paying her monthly, so overall it came out cheaper for us to just use my insurance, and definitely easier to file, just submit to mine and be done with it.

Also, when my wife canceled hers, it basically says that a major life event has to happen in order to change your mind and get the benefits back from her workplace, so the only two options are if we divorce or have a baby, that's pretty much the only time she can apply to get her benefits back, so make sure you think about this and calculate what is cheaper. My health benefits for example are 80% on everything for drugs and we don't do that many prescriptions, so her paying $70 per month didn't make sense for her insurance as 20% of our monthly prescription costs wasn't even close to $70, my dental is like 100% pretty much for everything, so once again, it depends on your benefits. If you are only 60% on something, then maybe holding hers makes more sense.
Jr. Member
Oct 10, 2014
176 posts
27 upvotes
Toronto, ON
eblend wrote:
Also, when my wife canceled hers, it basically says that a major life event has to happen in order to change your mind and get the benefits back from her workplace, so the only two options are if we divorce or have a baby, that's pretty much the only time she can apply to get her benefits back, so make sure you think about this and calculate what is cheaper. .
she likely would be able to get back in if you lost your benefit from job loss, since this would easily be argued as not anti-selection, but most plan would not have this contractually, so it would be negotiation with plan administrator..

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