Beginning in January 2026, employees covering a spouse on their medical plan may be required to pay a spousal surcharge. If your spouse has access to medical coverage through their employer and does not elect it for 2026 and you enroll them as a dependent under the State’s medical plan, you will be charged the spousal surcharge.
You may submit a Spousal Surcharge Form to request a waiver of the surcharge if any of the following apply to your spouse:
- Is not employed;
- Also works for the State of Indiana;
- Works for a participating school corporation (see in the FAQs below);
- Is not eligible for their employer’s health plan; or
- Is eligible and enrolled in their employer’s health plan.
A portion of the form may need to be completed by your spouse’s employer. The surcharge will apply if you cover a spouse but do not complete these steps. Health care costs continue to rise, and the State must ensure that the State Employee Health Plan (SEHP) remains viable long-term for employees and their dependents.
How to Complete the Spousal Surcharge Confirmation to request for a waiver:
- Once all required sections of the form are complete, log into PeopleSoft self-service.
- Complete the Spousal Surcharge Certification located in the Benefit Life Event and upload the completed form.
- After you upload the form, INSPD Benefits will review your submission. Spousal Surcharge forms are answered in the order they are received. Due to the high volume of submissions, it may take 3 to 4 business days for your form to be processed. Please be patient as INSPD Benefits reviews each form received.
Once INSPD is finished reviewing your submission, you will receive a workflow indicating if your form has been approved or denied. If denied, you will be responsible for paying the spousal surcharge. However, if your form is approved the spousal surcharge will be waived.
Note: You must report any change to your spouse’s employment that may impact whether you qualify to have the Spousal Surcharge waived. You will not see the surcharge represented on your premiums within the Open Enrollment event or the benefit summary.
If you have any questions about the process, please contact the Benefits Hotline, Monday through Friday, 7:30 a.m. to 5 p.m. ET, by phone at 317-232-1167 or 1-877-248-0007 (toll-free), or via email SPDBenefits@spd.in.gov.
Spousal Surcharge Frequently Asked Questions
- What is the spousal surcharge?
The spousal surcharge is a premium added if your spouse has access to medical coverage through an outside employer but enrolls in the State of Indiana Employee Health Plans (SEHP). The amount is $75 biweekly ($162.50 monthly), deducted on a per-pay-period basis.
The spousal surcharge will be waived if:
- You do not enroll your spouse in SEHP.
- Your spouse is not employed.
- Your spouse is employed but is not eligible for medical coverage through her/his employer.
- You and your spouse both work for the State of Indiana or a participating school corporation.
- Your spouse is enrolled in their employer’s health plan.
- Why is the State adding a spousal surcharge?
The surcharge encourages individuals with access to other employer-sponsored group insurance to review all medical plan options, while helping the State keep our program more affordable.
- Does the Spousal Surcharge apply if I only enroll my spouse on the State’s dental and/or vision plans?
No, the Spousal Surcharge is only applicable to medical insurance.
- If I enroll my spouse in the SEHP and they do not enroll in their employer’s medical plan, do I have to pay the surcharge?
Yes, you will have to pay a surcharge for benefits under State Employee Health Plan (SEHP).
- My spouse is self-employed (often referred to as a 1099 employee), do I have to pay the surcharge?
If your spouse has access to insurance through their employment, even if they are self-employed, they must either enroll in that coverage, or you will be required to pay the surcharge.
- Does the surcharge apply when a dependent child can receive group medical coverage through another medical plan?
The surcharge does not apply to dependent children who enroll in the State Employee Health Plan (SEHP).
- What if my spouse resigns or loses their job, but has access to COBRA? Does COBRA constitute employer-sponsored coverage?
COBRA coverage does not constitute an employer-sponsored medical plan. In this instance, the spouse no longer qualifies for employer-sponsored medical coverage and would not be subject to the spousal surcharge. You must notify the Benefits Hotline within 30 days of the qualifying event at 1-877-248-0007 or spdbenefits@spd.in.gov to make benefit changes.
- I am encountering a qualifying event that results in my spouse, who is covered by the SEHP to no longer be eligible for medical coverage through their employer. Will I be eligible to waive the surcharge?
You may be eligible to waive the surcharge. You must notify Benefits Hotline within 30 days of the qualifying event at 1-877-248-0007 or spdbenefits@spd.in.gov to make benefit changes. The Benefits Division will review the circumstances of the qualifying event and waive the surcharge from your future medical contributions if applicable.
- If I have a qualifying event that results in my spouse becoming eligible for another employer’s medical coverage during the year, would the surcharge apply?
Yes. You must report the qualifying event to the Benefits Hotline within 30 days of the qualifying event at 1-877-248-0007 or spdbenefits@spd.in.gov.
If you continue to cover your spouse, the surcharge will be included in your future medical contributions.
- Is the surcharge deducted before or after income taxes?
The surcharge is included on the same basis as your “regular” medical deductions (before income taxes if your medical premium is before income taxes).
- I am enrolling my spouse in the SEHP. Their employer offers medical coverage but does not have open enrollment at the same time as the SEHP. Does the surcharge apply?
Yes. Some employers may recognize annual enrollment as a qualifying event, and your spouse would have 30 days to change their benefits. We recommend that your spouse contact their Human Resources department to verify the qualifying event criteria and process. If their employer requires documentation of the loss of coverage, you may submit this request to spdbenefits@spd.in.gov.
- How will the State know if my spouse has health insurance available to them through his/her employer?
The Indiana State Personnel Department will conduct audits and reserves the right to use any resources at the State’s disposal to ensure compliance.
- What school corporations participate in the State Employee Health Plans?
The following schools currently participate in the State Employee Health Plans: Canaan, Cannelton City, Charles A. Beard, Lake Ridge, MSD of Shakamak, and Springville Community Academy.
- If I know I am going to be required to pay the spousal surcharge, do I need to complete form and the spousal surcharge certification?
No, if you know you do not qualify for a waiver, you do not need to complete the Spousal Surcharge form or submit the Spousal Surcharge Certification in PeopleSoft.
- What if I cover my spouse, but I don’t complete the Spousal Surcharge form or submit the Spousal Surcharge Certification in PeopleSoft?
The Spousal Surcharge will be applied starting on your first check in January. If you submit the form and certification at any time during the plan year and it is approved, the surcharge will waived on future paychecks.
- Can I get a letter that states my spouse has lost coverage if I remove them?
After Open Enrollment ends, INSPD will provide you with a letter verifying that you removed your spouse from coverage. Please note, the letter will not state that your spouse lost eligibility for coverage. Make sure your spouse’s employer will allow them to enroll if you elect to remove them, but they did not lose eligibility.
Additionally, you will receive a Benefits Summary once you submit your Open Enrollment. This document can also be used as verification for your spouse’s employer that you have removed your spouse from coverage.
