15,000 UPS spouses to be cut from health care plan…

UPS announced that spouses that are eligible for health insurance at their own place of employment will be dropped from the UPS health plan. This will apply to white collar, non union positions, only.

“Many spouses in the U.S. workforce will have access to employer-provided insurance under President Barack Obama’s health care-system overhaul, and UPS will remove them from its coverage, according to a copy of a memo to employees first published online by Kaiser Health News. Spouses who don’t work or lack employer-provided benefits will still be eligible at Atlanta-based UPS, according to the memo…

In its memo, UPS said the coverage shift is a response to expenses from the 2010 Affordable Care Act and “the rising cost of health care in general.” U.S. businesses have been increasing premiums to cover working spouses for years, said Paul Fronstin, a director at the Washington-based Employee Benefit Research Institute. Still, he said the total exclusion by UPS may be a first for a company its size.”

While this practice is not common, there is a growing trend to adapt this practice…

Denying health coverage to working spouses who are eligible for health insurance through their own employers is a rare practice, though it is growing. About 6% of companies with more than 500 workers have excluded spouses who could get coverage elsewhere, up from 3% in 2008, according to a 2012 survey conducted by Mercer, a consulting unit of Marsh & McLennan Cos.

Ozburn-Hessey Logistics LLC, a Brentwood, Tenn., third-party logistics provider, two years ago excluded from its health plans working spouses who are able to get health-care coverage through their own employer, said Hoyt Fitzsimmons, executive vice president of human resources.

In a memo, UPS representatives talked about “employer responsibility”…

“Since the Affordable Care Act requires employers to provide affordable coverage, we believe your spouse should be covered by their own employer — just as UPS has a responsibility to offer coverage to you, our employee,” UPS said in the memo. “Limiting plan eligibility is one way to manage ongoing health care costs.”

The company estimated it could save about $60 million a year in health benefit spending by excluding working spouses from coverage. This will also reduce the cost of the “Cadillac Tax” that will begin in 2018.

But, this will not leave anyone “uninsured.” Spouses will just have to take the coverage offered to them by their own employers.

I am sure this will be spun into another giant fail of the ACA.

5 thoughts on “15,000 UPS spouses to be cut from health care plan…

  1. It is a huge fail and the political backlash will be explosive. Obama promised that everyone would keep their coverage. Now you have a spouse in the service sector kicked off a premium plan to pay all of the expenses and copays of a minimally compliant bare bones plan. The marriage penalty is that household income derived of the better job will make the lion’s share of the cost of this step down fall on the spouse. That employers would game the ACA for profit was a given. When the race hits bottom, then what?

  2. I’m with Iless. It IS a big fail.

    I’d be interested to see the results of a poll where people are asked, “When Obama promised that ACA wouldn’t change your existing insurance, you did realize he didn’t mean you personally, right?”

  3. By all means, lless and quixote, let’s blame Obama for this when it’s the BUSINESS that’s responsible for the problem. Or would you only be outraged if UPS had decided to cut health insurance coverage for ALL its employees, not just the spouses? (And, it’s pretty noteworthy that the UNION employees’ spouses aren’t being kicked off the company’s insurance coverage–just the “white-collar” workers’ spouses.)

  4. It will only get very much worse. The elimination of spousal coverage is just a start and it will become the employer norm in a blinding flash. There will be attempts to play ping pong with the dependent coverages between the high and low plans. Then the “Cadillac” penalty will operate to price fix plans by lowering coverage across the board “to escape the penalty”. Invariably some employers will hit on the idea of the 401K type benefit and give employees a fixed sum to buy “their own” coverage from the exchanges. Now the ACA is being scapegoated as the cause of all this. With labor hopelessly in surplus and benefits under siege, employers would eventually have worked around exceedingly expensive health care to make these cuts anyway. But the ACA is set up to be the political patsy. When you aggregate all of the adjustments at a macro level, I expect that the consumer will wind up paying more for less coverage across a broad enough base that despite the extension of insurance to millions of previously uninsured, society as a whole will be worse served for a higher price. The very real “death panels” will still be internal to the profit controls of the insurance industry and there will be no will to regulate these huge donors. The most insidious cost of this is that if it blows up the lesson will be again to run away from the problem. There is no way that national health coverage emerges as a probability from a debacle, even as Medicare cruises on for all to see.

  5. Of course, it’s a fail. No spinning required. Under Obama Care, the spouse now has to get his/her own coverage (not health care, by the way, health insurance), at a cost of at least several hundred dollars a month. I don’t see how anybody not in the top 1% could shell out that extra dough, especially when most wages these days are at best stagnant. And if the spouse doesn’t fork over some moolah (probably a whole lot, with a massive deductible) to some insurance company (which will use every trick in the book to deny coverage), then the spouse pays a penalty, taken from any tax refund.

    Whatever good Obama Care might do (and I personally think it has done and will do no good whatsoever, since Medicaid has not been expanded as promised and since there is no limit on what insurers can charge), it is going to decimate the “middle class.” It is merely a conduit to force citizens to pay to private corporations (so blatantly unconstitutional it makes my head spin to hear that Obama was a constitutional scholar (har har har)), with no cost containment whatsoever.

    It is also a gift to companies that cover spouses – since now they don’t have to! Obama Care is any corporation’s dream come true. And, no, it doesn’t fall to a corporation to continue to fund exorbitantly expensive insurance for spouses when they have been given a green light not to. They’d be idiots. The cost of health insurance is driving them batty – and broke – too.

    Medicare for All.

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