United Parcel Service, the nation’s largest package delivery company, plans to drop health insurance coverage for thousands of employees' spouses in a cost-cutting move it blames partially on President Obama’s health care law.
Of 33,000 spouses on UPS’s plan, about 15,000 are eligible for health coverage through their own employers and won’t be covered by the company beginning next year, according to a memo to employees published by Kaiser Health News.
Since the Affordable Care Act requires employers to provide affordable coverage, the shipping giant says those 15,000 spouses should be covered by their own employer “just as UPS has a responsibility to offer coverage to you, our employee,” the memo said. “Limiting plan eligibility is one way to manage ongoing health care costs.”
UPS said the coverage shift is “consistent with the way many large employers are responding to the costs associated with the health-care reform legislation.”
UPS had about 399,000 employees at the end of 2012, according to a regulatory filing. The insurance change doesn’t apply to 250,000 Teamsters union workers or to employees outside the U.S., the memo says.
The 2010 health care law seeks to extend coverage to more of the nation’s 50 million uninsured and requires all Americans to obtain coverage next year. Employers with 50 or more full-time workers will have to provide health benefits or pay a fee, though the Obama administration announced last month that it was delaying that provision by a year at the request of business leaders.
Meanwhile, the University of Virginia on Wednesday announced it too will stop offering health insurance to spouses who have access to coverage elsewhere.
“With U.Va. facing rising health care costs, spiking expenses of high-dollar claims and looming fees and taxes connected with federal health reform, the modifications are designed to maintain the quality of the plan and contain costs in the years ahead,” said a new release posted on the university’s website.
This article is based in part on wire-service reports.