Post on 14-May-2015
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UPS Concerned About ObamaCare
Costs - Are You Concerned With
Your Cost?
In March 2010, Healthcare Reform was signed into law. Healthcare Reform contains
provisions that have changed and will continue
to change the health insurance industry in
substantial ways. Here is a company that is seeing the effects and higher cost for
it's operation.
The company United Parcel Service Inc. plans to drop
health-insurance benefits for working spouses of nonunion
employees, if they can get coverage elsewhere. With the
changes in the new health care law it sees no other choice and blames it for their decisions.
The company has over 15,000 employees and and has nearly
33,000 spouses it covers currently; however will drop
those spouses effective January 1, 2014 for spouses of United
States employees.UPS cited a benefits consultant's survey that found more companies are planning
on restricting benefits for working spouses.
UPS said it was making the change because of rising
health care costs and the 2010 law championed by President Barack Obama. The company said that it considered letting employees pay extra to cover
their working spouses but decided that would be difficult
to do.
"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," the company said in a memo to
employees.
According to benefits consultant Mercer LLC,
relatively few large companies exclude coverage
for spouses who have the option of other employer
coverage.
Mercer said that in 2012, just 6 percent of companies with 500 or more employees
excluded such spouses, although that was double the percentage in 2008. It
said another 6 percent levied a surcharge to cover
those spouses.
"Employers are thinking about it because (health
insurance) costs are continuing to go up," said
Mercer partner Joan Smyth. "They're trying to walk a
fine line between being fair to their employees but also being fiscally responsible."
Smyth said employers are waiting to see whether spouses can find coverage from public
insurance exchanges to be created under the health law. Other provisions of the law,
such as a per-participant fee to subsidize premiums for high-cost people in the individual-
policy market, encourage employers to reduce the
number of people they cover, she said.
Paul Fronstin, a senior research associate at the
Employee Benefit Research Institute, said that the
percentage of employers booting working spouses off
plans is still small — it's more common to simply add a
surcharge for insuring them.
"But trends start with small numbers," he said. "There's a herd mentality. When you
have a big employer like UPS do this, it's easier for other employers to do the
same thing."
In explaining the change to employees, UPS cited a
survey by consultant Towers Watson. That firm surveyed 583 employers and reported
growing interest in reducing coverage for
working spouses.
It said 4 percent already exclude spouses who can
get coverage through their own employer and another 8 percent plan that in 2014. Many more — 20 percent
now and rising to 33 percent next year — impose
a surcharge for covering that same working spouse.
Andy McGowan, a UPS spokesman, said the change was part of the company's
effort to keep health-insurance premiums at or below current levels for a "significant" number of employees. He said the
company's premiums have risen sharply in recent
years.
UPS told employees that spouses will no longer be eligible for physical and
mental health benefits and prescription-drug coverage.
"However, you may enroll her in dental, vision and
supplemental benefits such as life insurance" even if
the spouse's employer provides those, UPS told workers. It added that
spouses eligible for Medicare won't be excluded
from coverage.
The change also won't affect UPS' union workers, many of
them represented by the Teamsters. Their health
benefits are spelled out in labor contracts.The new policy will produce one
benefit for the nonunion employees: Those whose spouses lose UPS coverage will see their share of their insurance decline.
The company said it could be almost $1,600 for some workers.
The UPS change was first reported by Kaiser Health
News and USA Today. We cannot predict the outcome of any future legislation or litigation related to Healthcare
Reform. As described under “Item 1. Business—Health
Insurance Industry and Market Opportunity,” we
expect
Healthcare Reform to result in profound changes to the individual health insurance market and our business.
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