Skip to: Content
Skip to: Site Navigation
Skip to: Search


UPS drops health benefits for 15,000 spouses. An Obamacare bellwether?

UPS cited the effect of Obamacare on health-care costs in announcing the move, which deprives the 15,000 spouses of the option of keeping their current coverage, an Obama promise.

(Page 2 of 2)



A July analysis by the consulting firm Mercer detailed the challenge, from the viewpoint of employers.

Skip to next paragraph

Last year they slowed benefit cost growth to its lowest level in 15 years, but in 2014 they have the new fees and the likelihood of new enrollment to contend with [due to the ACA] on top of normal medical inflation,” said Mercer chief executive officer Julio Portalatin.

The Mercer analysis focused on the recent decision by the Obama administration to delay a core provision in the law – a requirement that employers must pay a penalty if they don’t offer coverage to all employees working 30 or more hours per week.

Even with those penalties off the table for a year, the law will result in fees, changes in benefit-plan design, and increases in enrollment that will raise health-plan costs by 2 to 3 percent next year, according to the Mercer analysis. 

At the heart of the ACA are the mandate on employers who have 50 full-time workers to offer health benefits (now delayed until 2015) and a mandate that individuals obtain health insurance (or pay a tax penalty) starting in 2014.

Millions of uninsured Americans are expected to gain health benefits because of those steps, which the law couples with an expansion of Medicaid and subsidies to help low-income households buy insurance.

Seeking to counter the view that the law is causing America’s part-time workforce to expand, the Obama administration says a large majority of the nation’s new jobs are full time.

According to a Mercer survey, about one-third of employers don’t extend coverage to all employees who work at least 30 hours a week. Many of those employers had made plans to extend that coverage in 2014, before the White House announced the delay in penalties for not doing so.

It remains to be seen how many employers will push ahead with an expansion of coverage next year.

What’s clearest is that health-care costs remain a huge concern to families and employers alike.

“Limiting plan eligibility is one way to manage ongoing health-care costs, now and into the future, so that we can continue to provide affordable coverage for our employees,” UPS said in a memo to employees, which has been quoted in news reports this week.

Already, many employers levy a surcharge on benefits for spouses who have access to other coverage plans through their own employers.

For employers with 5,000 or more workers, about 14 percent imposed such a surcharge as of last year, and 4 percent denied coverage entirely for spouses with other coverage options from their own employers, according to a Mercer survey.

Permissions

  • Weekly review of global news and ideas
  • Balanced, insightful and trustworthy
  • Subscribe in print or digital

Special Offer

 

Doing Good

 

What happens when ordinary people decide to pay it forward? Extraordinary change...

Danny Bent poses at the starting line of the Boston Marathon in Hopkinton, Mass.

After the Boston Marathon bombings, Danny Bent took on a cross-country challenge

The athlete-adventurer co-founded a relay run called One Run for Boston that started in Los Angeles and ended at the marathon finish line to raise funds for victims.

 
 
Become a fan! Follow us! Google+ YouTube See our feeds!