Can anyone help or refer me to the proper sources for the following:

We are a company of 130 employees and we have a self funded plan.
Due to costs, we are looking at different plans of action relating to dependent coverage.

Can we terminate the spouse of an active employee when they reach age 65?

No you cannot. It would be considered discriminatory. Unfortunately, you can't charge them higher premiums either.

The Medicare folks put out some helpful guidance on this issue. Afraid I do not have the link handy but basically Medicare-eligible spouses of active employees must be treated the same as any other spouse of active employees. While some employers attempt to "nudge" Medicare eligible folks into selecting Medicare coverage or even "bribe" them by agreeing to pay Medicare premiums, etc. in order to get these folks off the group plan, employers must be very careful to avoid such actions or risk running afoul of the Medicare rules. Thus, while an employer might provide medicare-eligible spouses a notice of their medicare rights and discuss medicare secondary payer rules, etc., the employer should not coerce any decision to drop group coverage in favor of Medicare.