August 22nd, 2013
02:48 PM ET

UPS to Cut Coverage for Thousands

Corporate America just fired another shot in the war over Obamacare.

The United Parcel Service says the health care law is so costly, they'll have to drop thousands of people from their coverage starting in January.

The iconic brown package delivery service will discontinue coverage for 15,000 of its non-union workers' spouses.

“These are spouses who are eligible for coverage through their own employers, and UPS is squarely blaming Obamacare here,” reports CNN'S Christine Romans.

“That affects roughly half of the company's workforce.”

In an internal memo obtained by Kaiser Health News, UPS states: "... we believe your spouse should be covered by their own employer - just as UPS has a responsibility to offer coverage to you, our employee."

The memo also says the company's health care costs usually increase by about 7 percent a year, but that due to Obamacare, they’re are expected to rise 11.25 percent in 2014.

UPS told Kaisner Health News the cut is expected to save them $60 million yearly to hopefully "offset cost increases due to the [Affordable Care Act],”

The shipping giant is blaming several clauses of Obamacare for the cut, including mandatory coverage of dependents up to 26, and new government fees.

The announcement makes UPS one of the highest-profile employers barring working spouses from the company plan.

Many employers already require employees to pay a surcharge for working spouse medical coverage, while others are paying a bonus if a spouse gets coverage elsewhere, “because companies are trying to really limit their coverage.”

This move by UPS hints a ripple effect for Americans across the board.

The intention behind Obamacare was to insure coverage for everybody, but now people with insurance are saying they are feeling the effects of Obamacare.

“Companies who provide insurance are going to start tweaking and changing their rules and plans,” Romans says. “Everyone’s going to feel it.”

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  1. dontblamemeforthis

    Sounds like a smart business decision, given that the spouses have coverage through their own jobs. A no brainer.

    UPS employees are SPOILED IMO and have been for years.

    August 22, 2013 at 3:29 pm | Reply

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