UPS is dropping thousands of spouses from its medical plan because they can get some kind of coverage elsewhere. It cites the
Affordable Care Act as a reason for the move.
Kaiser Health News reports:
The health law requires large employers to cover employees and dependent children but not spouses or domestic partners.
UPS spouses may have difficulty finding similar coverage at their own employers. The $500 in-network family deductible for UPS’s basic plan, for example, is less than the nationwide average of $733, according to the Kaiser Family Foundation. (Kaiser Health News is an editorially independent program of the foundation.)
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The new plan at UPS, which earned $807 million last year on revenue of $54.1 billion, affects about a quarter of its U.S. workforce. The company is sharing part of the savings with employees, reducing premiums for workers whose spouses leave the plan.
Neither the company nor the Teamsters union would say whether a pending contract for blue-collar workers includes health-coverage changes for working spouses.
To explain the switch, UPS gave workers a memo, obtained by KHN, that repeatedly mentions the health act.
While acknowledging that overall health spending continues to rise, the company also blamed cost increases on the Affordable Care Act’s research fee (initially $1 per health plan member, then rising to $2) and an a temporary fee of $63 per member to stabilize new online marketplaces for consumers buying directly from insurers.
Other factors are the act’s ban on annual and lifetime coverage limits and its requirement to cover dependent children up to age 26, UPS said. The law’s mandate for individuals to obtain coverage will nudge employees who previously opted out to enroll, also raising costs, the company said.
The health law is “one of the reasons that UPS is implementing the changes,” McGowan said.
