UPS to Drop 15,000 Spouses from Employee Healthcare Plan

By Natasha L. Foreman

According to an article written by Jose Pagliery for CNN Money, United Parcel Service (UPS) intends to drop 15,000 spouses from their employee healthcare plan, and the company blames “ObamaCare” (Affordable Care Act) for their decision. Simply put, spouses who are working and eligible to receive insurance through their jobs are being released from coverage under UPS’s plan. Those spouses of UPS employees who are unemployed, have no insurance plan option at their job, or are not eligible for insurance coverage at their place of employment, will continue to be covered by UPS’s insurance.

Basically, UPS only wants to take care of their own, and feels that other companies should cover their employees. So if you are employed by UPS and your spouse is employed by company XYZ, who offers insurance coverage to employees, then UPS says that your spouse needs to get insurance through their employer and not through UPS. This actually makes logical sense. But of course it costs employees less money from their paychecks when they double-dip in a joint coverage plan, versus a single-insured plan.

In an undated memo obtained by Kaiser Health News, UPS said that this change only applies to spouses of non-union workers in the U.S. The memo also blames its decision on several aspects of ObamaCare, including government fees and the mandatory coverage of employees dependent children through the age of 26—great for families with dependents (and for the children), but a punch in the gut for many companies who gladly practiced withdrawing coverage of dependents once they turned 18 to 23 years of age.

According to the internal memo, UPS fears an additional cost increase of 4.25% annually beginning in January 2014, which would cost them 11.25% annually, which includes (or is in addition to) a fee of approximately $63.00 per insured person. Jose Pagliery wrote that the federal Department of Health and Human Services explained that the fees will be in place to help with the transition over to the new healthcare system and acceptance of newly sick individuals and those who were previously uninsured.

In the UPS memo it stated that they believed 35% of other companies would also be making similar cuts and changes to their insurance plans, although no specific market data was cited. The fear is truly kicking in and companies are reacting fast.

So how is your company affected by or responding to the new changes that ObamaCare brings?

If you are a business owner/CEO with employees, do you embrace the change or are you trying to find ways to cut associated costs so that you are impacted less by the fees and increased commitments? What fears do you have as a business owner?

If you are an employee at a company that currently offers health plan coverage, what are your fears about the pending changes? How will you and your family be impacted by these changes? How have you already been impacted?

Pagliery’s article also shared a link about what companies will actually pay:

Another interesting article you might consider reading uncovers the overblown ObamaCare myths connected to small business:

To read Pagliery’s article in full and to chime in to his questions about employer-sponsored health insurance visit:

Only through healthy, respectful dialogue can we address these issues, dissect perceived problems, and find acceptable solutions. Let’s sit down and really talk.

Copyright 2013. All Rights Reserved. Foreman & Associates, LLC. Natasha L. Foreman.

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