First, I apologize. I am getting behind on the many things to report. There is more to come this week as I get time between clients. Secondly, don’t you just love how a headline can skew the perception of an article and thus skew an opinion?
So, there was an article yesterday with the headline “UPS to drop 15,000 spouse from insurance, cites Obamacare”. I don’t know if you have noticed, but the term Obamacare tends to be a polarizing term. The company referred to the Affordable Care Act, but the author chose to put Obamacare in the title for affect. She might have done it for search results. That is a possibility I won’t dismiss, but it slants the opinion and audience of the article. My point is I think this is ineffective. But I digress… Let’s get into the details.
What UPS did was poll their employees to find out which employees had spouses that were eligible for coverage through their own employer. The ACA law states that employers must cover employees and their dependent children but not spouses or domestic partners. So, they chose to not cover spouses that have coverage available with their own employer and this only applies to the non-union workforce. In the statement from UPS, they refer to the rising costs due to ACA but at the same time saving $60 million as a result of the move. Yes, it is true that ACA adds additional costs to healthcare benefits for an employer. This is not due to just the rising cost of health insurance due to the increases in coverage requirements. It is also due to ACA fees that insurers must pass along to their customers such as the Health Insurer Fee, the Reinsurance Fee and the PCORI Trust Fund Fee. So, UPS was looking for a consistent way to exclude coverage without overly harming their workforce. Unless you can think of another way, UPS decided the smallest, legal pool of people to exclude was the spouses who were eligible for insurance with their own employers regardless of the cost of those plans. Why did they do that? Because the law allowed it. Was this an unintended consequence? I would bet on it.
So, my point to this post is that businesses have to make decisions that may not be popular with their workforce or the public. Healthcare costs are continuing to escalate and this law does nothing to slow those increases for big business. In fact, with the additional fees, they must find other ways to curb the increase in healthcare costs. In fact, since there is no mandate for 2014 for businesses, there is actually a dis-incentive to provide health insurance to employees for 2014 as those fees I stated above are placed on the insurance companies and passed along to corporations or the policy holders. In the end, UPS found a solution that had the smallest affect on their workforce.
I wouldn’t be surprised if we hear of more businesses following UPS’s lead if they haven’t done so already. Here is the link to the original article:
Thank you to Diane for bringing this article to my attention. More to come…