UPS dropping health coverage for working spouses

Will save $60M; higher costs seen under Obamacare

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Citing in part the new health care law, the United Parcel Service said it will drop health coverage for about 15,000 working spouses of employees who are eligible for coverage from their own employers.

The company said the move was its best option to keep health care costs in check, given the health care law’s fees and mininum-coverage requirements.

“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,” the company said in an undated memo first reported Wednesday by Kaiser Health News. “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.”

The move should save the company about $60 million per year, Kaiser reported, citing a company spokeswoman. Its announcement had an air of corporate self-defense, claiming about 35 percent of other companies are planning to do the same thing.

Republican opponents of President Obama’s signature law jumped on the move as evidence the reforms are flawed and unworkable for average Americans.

“Another day, another broken promise. It turns out that if you are on your spouse’s health care plan, and you like it, you may not be able to keep it as the new health care law kicks in,” House Republicans on the Energy and Commerce Committee said Wednesday.

Similarly, GOP leaders of the House Ways and Means Committee said “American families who are already grappling with higher health care costs under the law are also coming face-to-face with the stark reality that they will lose the coverage they have and like.”

Adding fuel to the furor, the University of Virginia on Wednesday announced several changes to its health coverage, citing in part the fees and taxes associated with the health care law.

The Charlottesville, Va., institution said spouses who are eligible for their own employer-based plan will no longer be covered, and that premiums would increase by $40 per month unless an employee completed two aspects of the university’s wellness program.

It also noted that, “ironically,” the university’s more generous plans would be subject to a “Cadillac tax” on high-cost coverage starting in 2018.

The war of words over Obamacare is ramping up as key implementation deadlines loom.

Obama administration officials say they are on track to begin enrolling Americans in state-based insurance exchanges on Oct. 1 for coverage that takes effect in January. The exchanges will allow qualified consumers without employer-based coverage to buy health plans with the help of government subsidies.

Sixteen states and the District of Columbia decided to set up their exchanges on their own, while the rest of the states decided to let the federal government take on the task for them or share in the responsibilities.

Mr. Obama video-conferenced with state officials running their own exchanges Wednesday to thank them for “working on the front lines” of the law’s implementation and to keep tabs on their progress, a White House spokesman said.

The administration also touted a survey released Tuesday that said increases in annual premiums among employer-based plans have leveled off after years of soaring costs.

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