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United Parcel Service will drop health coverage for the working spouses of 15,000 employees.

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Citing health law, UPS says it will end coverage for 15,000 working spouses

  • Article by: Mary Jane Credeur and Alex Nussbaum
  • Bloomberg News
  • August 21, 2013 - 8:59 PM

 

United Parcel Service, one of the biggest U.S. employers, plans to drop health insurance coverage for about 15,000 working spouses of white-collar employees to curtail rising costs.

Many spouses in the workforce will have access to employer-provided insurance under President Obama’s health care law, and UPS will remove them from its coverage, according to a copy of a memo to employees that was published online by Kaiser Health News.

Of 33,000 spouses on UPS’ insurance plan for white-collar workers, about 15,000 are eligible for health coverage through their own employers and won’t be covered by UPS starting next year, according to the memo. Spouses who don’t work or who lack employer-provided benefits still will be eligible for coverage by Atlanta-based UPS.

“Since the Affordable Care Act requires employers to provide affordable coverage, we believe your spouse should be covered by their own employer — just as UPS has a responsibility to offer coverage to you, our employee,” UPS said in the memo. “Limiting plan eligibility is one way to manage ongoing health care costs.”

UPS, the world’s largest package-delivery company, had about 399,000 employees at the end of 2012. The insurance change doesn’t apply to 250,000 Teamsters union workers or to overseas employees.

The coverage shift is “consistent with the way many large employers are responding to the costs associated with the health care reform legislation,” according to the memo. White-collar employees’ children will retain coverage, according to the memo.

The 2010 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, though the Obama administration announced last month that it was delaying that provision by a year at the request of business leaders.

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