UPS cites Obamacare in cutting benefits to spouses

Analysts say such reductions are part of a larger business trend to trim employee costs overall, and health care is a big target.

By Bruce Kennedy Aug 22, 2013 9:19AM

File photo of a UPS package (© Paul Sakuma/AP Photo)Shipping giant UPS (UPS) is the latest large company to point to Obamacare as it cuts employee health benefits.

The company has told its white-collar workers that 15,000 of their spouses who are eligible for health care benefits through their own jobs will be taken off the UPS plan next year. A spokesman says that move will save UPS about $60 million annually.

According to a report from Kaiser Health News, working in collaboration with USA Today, the changes apply to nonunion U.S. workers only. And in a memo to employees obtained by KHN, UPS says rising medical costs, "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."

On Wednesday, the University of Virginia also announced that, starting next year, employees' spouses who have access to health care coverage through their own employers will no longer be eligible for coverage under the university's plan.

"The modified plan will provide new options and reward those who participate in wellness programs," university vice president and chief human resources officer Susan Carkeek said in a press release. "But we must make adjustments or face millions of dollars in rising costs, fees and taxes that would be passed along to employees."

Industry analysts say the moves by UPS and other businesses are part of a growing trend of companies reducing their benefits overall and requiring employees to pay extra when it comes to medical coverage for their working spouses, or even denying that coverage.

"They are simply saying to the spouse outright, 'If you have coverage somewhere else, you are not eligible here,'" Edward Fensholt, a senior vice president at international insurance brokerage Lockton Companies, told KHN. "We don't see a lot of that out there, but more than we used to."

"When health care reform came on the scene a few years ago, we definitely saw an uptick in companies wanting to explore a working-spouse provision," said Steve Noury, a national sales director for HMS Employer Solutions. "We have seen (them) over the past two or three years putting those in place."

Supporters of the Affordable Care Act are scoffing at the argument that the law will have a major impact on health costs for large companies.

"The notion that those are going to be make or break when they are otherwise absorbing 7% to 10% a year (in broader health cost increases) is kind of ridiculous," Jonathan Gruber, an MIT economist who advised the Obama administration on health policy, told KHN.

In a 2009 analysis of health insurance premiums under the Affordable Care Act before it was passed, the nonpartisan Congressional Budget Office projected Obamacare's effect on premiums for large employers would be "negligible."

More on moneyNOW

Aug 22, 2013 10:58AM

OBAMACARE in one sentence.....


We are going to be gifted with a health care plan that we are forced to purchase and fined if we don't, which purportedly covers at least ten million more people without adding a single new doctor but provides for 16,000 new IRS agents, written by a committee who's chairman says he doesn't understand it and passed by a congress that didn't read it but exempted themselves from it and was signed by a president who smokes with some of it being administered by a treasury chief that didn't pay his own taxes for which we are taxed for four years before any benefits take effect by a government that has already bankrupted medicare and social security and is all to be overseen by a surgeon general that is obese and financed by a country that is broke.



Aug 22, 2013 10:58AM
What a surprise.  Obamacare is the worst idea in the history of ideas.  But it keeps moving forward and people still love the idiot in the White House.
Aug 22, 2013 10:45AM



if you like your healthcare you can keep it.- obama




not looking good for you obama supporters.

Aug 22, 2013 10:34AM
The Teamsters union overwhelmingly supported Obama with votes and campaign contributions.  Now its time to pay the consequences.
Aug 22, 2013 11:03AM
It is not just UPS - many more companies are doing it. But don't complain Amerika, you voted for it - twice!
Aug 22, 2013 10:56AM
Some day soon even the dumbest Dem will realize that Obamacare is a horrible program.
Aug 22, 2013 9:50AM
This same thing happened last year at the hospital where my wife works.  If spouses wanted coverage, they had to sign an affidavit that they couldn't obtain insurance through their own employer.

In other news, here is a story that bears repeating over and over again, so I am.

"WASHINGTON (AP) - The average American household is earning less than when the Great Recession ended four years ago, according to a report released Wednesday.

U.S. median household income, once adjusted for inflation, has fallen 4.4 percent in that time, according to the report from Sentier Research. The report is based on an analysis of Census Bureau data.

The median, or midpoint, income in June 2013 was $52,098. That's down from $54,478 in June 2009, when the recession officially ended. And it's below the $55,480 that the median household took in when the recession began in December 2007.

The report says nearly every group is worse off than four years ago, except for those 65 to 74. Some groups have experienced larger-than-average declines, including blacks, young and upper-middle-aged people and the unemployed."

Aug 22, 2013 10:59AM
Yeah boy, that Obama care is looking better all the time????? BS!  Where are all the Dems on this thing----under some rock somewhere? Wait until 2014---see how many of them run on this thing. And BO wants to refocus his agenda on the economy? This is the economy stupid.
Aug 22, 2013 11:56AM

All I know is that I was promised 3 things.  1. My health insurance would cost less.  2. My health insurance will cover more.  3. My taxes won't go up.  All 3 promises were broken by close of business on Jan 2, 2013.


And remember, the Supreme Court ruling was that the only way the individual mandate was constitutional is if it is a tax.  Then the Federal Government has the right to demand payment and penalize those that refuse.  Remember Nancy Pelosi stating arrogantley that the Supreme Court got it wrong?  Remember her saying it's not a tax and it's moving forward anyway?  Well then why is it being administered by the IRS?


All of you Obama drones make me laugh.  They lie and lie and you just keep acting as if nothing happened.  They take from you and give to the government and you pretend it never happened.


 "In a democracy, people get the government they deserve," Alexis de Tocqueville.  As far as I'm concerned you all got what you deserve.

Aug 22, 2013 11:32AM
I'm sure it's all G. W. Bush's fault, right Bo-Dumbo-RATS?? 
Aug 22, 2013 9:45AM
My company is doing it too.  WE are currently undergoing audits to make sure they  can't.  You have to sign a legal affidavit saying they can not get healthcare elsewhere.  I would much rather have my wife on mine, but I am not allowed.
Aug 22, 2013 11:21AM
I wonder how the union UPS workers feel about this latest development! Union people helped get him elected!
Aug 22, 2013 11:33AM

The Affordable Care Act is a joke. It is only going to cause health care costs to increase, private insurance premiums to increase and employer coverage to decrease. Just one more nail being driven into America's coffin by Obama and his cronies!


"The notion that those are going to be make-or-break when they are otherwise absorbing 7% to 10% a year [in broader health-cost increases] is kind of ridiculous," Jonathan Gruber, an MIT economist who advised the Obama administration on health policy, said to KHN.


Hey Gruber, are you going to guarentee this claim?


You can't because no one knows how this will turn out. Most of America hates it.


But we do know that Gov staffers in Washington DC, and companies like Mcdonalds are exempt..

Aug 22, 2013 10:30AM
I worked a company that did this to spouses BEFORE Obamacare was even being considered.  With the rising costs of healthcare, why should a company pay for a spouse who can obtain their own insurance through their own employer?  Many of these companies, including UPS, provide coverage if the spouse doesn't work or have coverage through their employer. 
Aug 22, 2013 11:18AM
$60 million = negligible (only when it is someone else's money!)
Aug 22, 2013 11:22AM

LMMFAO, more proof nobama was, is and will always be wrong. You goons made your bed, now lay in it.

Aug 22, 2013 10:55AM
Aug 22, 2013 11:26AM
Welcome to the real world.  It is called the "Working Spouse Rule" and it has been increasingly adopted by companies over the last 30 years--- That is correct.  The only time you got to go on your  spouses insurance was if you lost your insurance and then you had to prove it to the spouse's  insurance company. This is not new and has been a trend for 30 years.  Just like jobs moving overseas. Where have some of you been? In your own little world?
Aug 22, 2013 11:11AM
There are Colleges that are cutting spouse benefits if the spouse has benefits via their job.
All of this time and cost by employers and the gov. would be a moot point if we finally decided that we should get healthcare off the backs of the companies and gov. Workers need to be covered for workman's comp, short term disability, and a cheap policy for LTD if they are hurt on the job. Basic healthcare should not be associated with employment. Should be on the open market. Why did this ever happen? Unions? Employers wanted to attract good workers? Heck, give the workers a decent salary and some tax free dollars towards healthcare purchase (tax free for employer and employee). We need some real structural changes. To bad we can't get non-profit healthcare in this country.
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