In the UPS memo explaining why the company was ending health-care coverage for working employee spouses was a finding, based on “market data,” that 35% of the companies it examined will join them in the practice next year.
We know such moves are becoming more popular, but according to a 2012 Mercer survey cited by The Wall Street Journal, only 6% of companies with more than 500 employees exclude spouses who could get coverage elsewhere.
The UPS figures may overstate things. A Towers Watson survey found that about 12% of companies will exclude working spouses next year. Still, as 2014 approaches, it looks like there are going to be significantly more spouses and families who will be forced to change up their health insurance.
The motivation for companies is clear, as they’ll face initially higher costs starting next year. Many already impose a fee or surcharge for working spouses who choose to use their plans, but taking away coverage altogether is a bigger cost saver.
It’s still going to make a lot of those affected extremely angry. At first glance, this sounds innocuous; all of these spouses are eligible to be covered by their own employer, so no big deal.
In reality, it can be difficult and often expensive for married couples to have separate health-insurance plans. It means having to deal with two different insurers and two different sets of paperwork, potentially having to use different medical providers, and a host of other difficulties.
And since dual-earning couples who prefer the simplicity of one plan tend to go with whichever employer offers better or less expensive coverage, these sorts of moves may force some couples to pick a less appealing plan just because it covers both of them.
That’s a benefit for employers who take this step. They get to stop covering both the employee and their spouse if they switch.
Relatively few employers have taken this step, but the highly publicized move by an employer as large as UPS could well convince more of them to do so.
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.