Obamacare: UPS Dropping Some Spouses From Insurance, Charging Smokers

Originally published: August 21, 2013
Updated: December 29, 2014 at 11:14 am

NEW YORK (MorichesDaily) – UPS is the latest in a growing list of big companies that plan to end health insurance coverage of employees’ spouses this fall if they can get coverage elsewhere — and the companies are blaming Obamacare.

Some UPS employee’s received a memo that outlined an increase in medical costs, “combined with the costs associated with the Affordable Care Act (ACA), have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost,” UPS said.

UPS says that the move will affect an estimated 15,000 working spouses at that company, and they estimate it will save the company about $60 million annually.

In a report, Kaiser Health News and USA Today said UPS spouses may have difficulty finding similar coverage in their own workplaces because the UPS plan is more generous than the national average.

Many companies already add hefty surcharges to provide coverage for employees’ spouses, but like UPS, more businesses are beginning to drop spouses altogether, the report says.

For example, the $500 in-network family deductible for UPS’s basic plan is less than the nationwide average of $733, according to the Kaiser Family Foundation.

“They are simply saying to the spouse outright, ‘If you have coverage somewhere else you are not eligible here,’” said Edward Fensholt, a senior vice president at Lockton Cos., a large insurance broker. “We don’t see a lot of that out there, but more than we used to.”

This year 4% of large employers surveyed by consultants Towers Watson excluded spouses if they had similar coverage where they work. Another 8% planned such a change for 2014, according to the survey.

Smokers too could be in for a shock when this fall, due to a controversial clause in the Affordable Care Act, or ACA, that allows insurers to penalize smokers by continuing to charge higher rates to tobacco users.

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UPS said in the memo that on January 1st, 2014 they will implement an extra $150 monthly premium for smokers — unless they quit by September 1st of this year.

Under the ACA, popularly known as Obamacare, a worker whose employer offers company-subsidized health insurance that costs the worker less than or equal to 9.5 percent of household income is considered to be receiving “affordable coverage.”

Workers with access to that supposedly affordable coverage from their employers are not eligible to reject it and instead buy insurance on the Obamacare state exchanges using government subsidies in the form of tax credits. Those credits are available to households whose incomes fall below 400 percent of federal poverty levels, which for a family of four is $94,200.

Many believe that Obamacare is bad for America and President Barack Obama is pledging to do everything he can to make sure the new health care law works the way he intended.

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2 Responses to Obamacare: UPS Dropping Some Spouses From Insurance, Charging Smokers

  1. […] They are being offered a certain amount to buy their own insurance. We have a friend who works for UPS said his wife, who is SAHM, is getting dropped from his insurance as of Oct 31. Just as expected, […]

  2. Gibson on October 18, 2013 at 12:10 am

    It is a good step taken by our governor. Health insurance is one type of assurance and support for future. We can use it in emergency. We should go for health insurance because now days many people affected by several disease. Huge amount of money needed for treatment. In such cases health insurance will helpful for us.

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