United Parcel Service Inc. plans to remove thousands of spouses from its medical plan because they are eligible for coverage elsewhere. The Atlanta-based logistics company points to the Affordable Care Act, or Obamacare, as a big reason for the decision, reports Kaiser Health News.
The decision comes as many analysts are downplaying the Affordable Care Act’s effect on companies such as UPS, noting that the move reflects a long-term trend of shrinking corporate medical benefits, Kaiser Health News reports. But UPS repeatedly cites Obamacare to explain the decision, adding fuel to the debate over whether it erodes traditional employer coverage, Kaiser says.
Rising medical costs, “combined with the costs associated with the Affordable Care Act, have made it increasingly difficult to continue providing the same level of health care benefits to our employees at an affordable cost,” UPS said in a memo to employees.
According to Kaiser, UPS (NYSE: UPS) told white-collar workers two months ago that 15,000 working spouses eligible for coverage by their own employers would be excluded from the UPS plan in 2014.
UPS expects the move, which applies to non-union U.S. workers only, to save about $60 million a year, company spokesman Andy McGowan said.
The health law requires large employers to cover employees and dependent children, but not spouses or domestic partners, Kaiser adds.
Kaiser said the Obama administration would not respond directly to UPS’ statements, but said that employer coverage increased when Massachusetts implemented its own version of the health overhaul.
“The health care law will make health insurance more affordable, strengthen small businesses and make it easier for employers to provide coverage to their workers,” said Joanne Peters, spokeswoman for the U.S. Department of Health and Human Services.
Earlier this week, Forever 21 Inc. became the latest national company to cut employee hours to counter the impact of Obamacare, according to Policymic.com.
Atlanta-based AAA Parking, a parking garage operator that employs more than 1,600 companywide, moved about half of its 500 full-time hourly employees to part-time status on April 15, in response to the law.