UPS Health Benefits Cut For Employee Spouses

UPS health benefits are coming to an end for thousands of spouses of the company’s US-based white-collar workforce.

The United Parcel Service attributes this benefits cutback to Obamacare and other related insurance costs. About 15,000 spouses of non-union employees will lose their benefits on January 2014. UPS claims that those who are being removed from its plan can obtain insurance from their own employers.

In a memo to UPS employees, the country’s fourth-largest employer stated that the Affordable Care Act, a.k.a. Obamacare, has necessitated this reduction in spousal benefits. “The increase in [chronic medical conditions] and the rising cost of health care in general, combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost.” The global package-delivery company anticipates an 11.25 percent increase in insurance coverage costs this year and that it will save about $60 million with this change in its benefits package.

The Bloomberg news agency explains that “The shift is a sign of corporate America’s increasing willingness to make deep changes to benefits once taken as a given by workers. The health-care overhaul, estimated to boost business expenses by 2 percent to 4 percent next year, is adding to the momentum that has already spurred higher deductibles and surcharges for covering dependents.”

The UPS health benefits memo further asserts that “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. Limiting plan eligibility is one way to manage ongoing heath care costs…”

About the UPS health benefits reduction, Edward Fensholt, an executive with an international insurance brokerage, commented that “They are simply saying to the spouse outright, ‘If you have coverage somewhere else, you are not eligible here.’ We don’t see a lot of that out there, but more than we used to.”

Yesterday the University of Virginia announced it was similarly dropping health coverage for spouses of employees.