Reinsurance doesn't completely let the company off the hook for the costs (in the long run). Even if reinsurance covers 100% of costs above the cap (which it ty

Reinsurance doesn't completely let the company off the hook for the costs (in the long run). Even if reinsurance covers 100% of costs above the cap (which it typically does not), those costs will just get factored into the future premiums charged to the company[0] . It makes it hard to place an exact price tag on how much this employee's coverage would have cost the company without knowing the details, but it's clear that it would have been very expensive to them one way or the other - and certainly a lot more than it cost them to have her switch to her husband's insurance instead. [0] It's just like how your renter's insurance rates will [often] skyrocket immediately if you try to file any claim at all. People aren't used to this in the consumer health insurance market because there's a lot of indirection in the healthcare system, but that's how all insurance models work at a high level[1], so that's how the costs all (eventually) flow (extra emphasis on "eventually"). [1] There's also the added wrinkle that we also use "health insurance" as a political tool to do things that have nothing to do with risk smoothing at all, so the model gets tricky to unpack, but that's a separate matter.