UPS Drops Health Coverage For 15,000 Employee Spouses, Blames Obamacare

UPS has decided, as a result of increased costs and provisions of the Affordable Care Act (ACA), to stop covering employee’s spouses who can get coverage from their own employer, according to a memo
obtained by Kaiser Health News,

Some effects of Obamacare are already being felt, like having to provide insurance for employee’s children under the age of 26. Costs are going to increase starting in 2014, as companies have to pay fees to fund research on medical intervention effectiveness and cover those employees who currently opt out of insurance.

UPS makes the cut in the fact of health care costs that rose $US49 million in the first half of fiscal 2013 alone, which it attributes largely to the ACA, according to the Wall Street Journal.

This move will likely be particularly unpopular as it can be difficult and costly for married couples to have separate insurance. Many other employers allow spousal coverage for a fee, which UPS considered, but chose not to allow.

A full 250,000 of the company’s 322,000-strong American workforce is unionized, and will still be able to insure their spouses under their union contracts. Only about 15,000 spouses will be affected, leading to saving of around $US60 million, according to a company spokesman.

Pretty much every large employer is going to be combing through their health care expenses to figure out what more they might cut.

When UPS looked at other companies’ health coverage plans while trying to make its decision, it found that 35% of them plan a similar move next year.

Below is a portion of the company’s memo which explains the policy change. The full memo is available here.

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