Spouses Losing Health Insurance Coverage at UPS

UPS announced this week that they will no longer cover some of their employees’ spouses’ health insurance.  There has been quite an uproar, especially from those who are opposed to the Affordable Care Act going into effect next year.  This latest UPS announcement is adding fuel to the fire for Americans who are against the changes that will be raising insurance costs for many employers.  In the article “UPS cuts insurance to 15,000 spouses, blames Obamacare,” Jose Pagliery of CNN Money tells us that Kaiser Health News made this announcement from an internal memo that recently went out to employees.  When asked, UPS discussed the matter with Kaiser and told them that this only applies to workers who are non-union.  Most of the UPS delivery and truck drivers are in a union and receive their health insurance through a union plan.

But employees who are not in the union will be effected when this change occurs.  Now there is one important aspect of this new rule that I haven’t heard as much chatter about.  The spouses that will be cut from UPS’s insurance plan are those who work and are eligible for health insurance through their own job.  Spouses who do not work or who don’t have health insurance through their employer will not be kicked out of the UPS employee plan.  UPS has a point in saying that other employers should bear the burden of increasing health care costs just as they do for their employees.  Adding coverage to dependents through age 26 and a yearly government fee on all employees are two of the reasons that UPS cited for dropping spouses’ coverage.

Yearly, UPS says that their health care costs typically go up around 7% each year, but they estimate their costs to rise more than 11% next year because of the Affordable Care Act.  They also claim that 35% of companies will be making a similar requirement to their workers’ spouses.  Towers Watson did a study regarding that claim and found that 18% of companies planned to force spouses to use their own employer’s health insurance if it is available to them.  The government fees will start at $63 a person next year, so dropping insurance for 15,000 people will certainly save UPS some money.

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