UPS will no longer insure some its employees’ spouses, citing costs associated with the Affordable Care Act. Based on market data it did not provide, the company claims 35 percent of other businesses are doing the same.
UPS detailed the change in a July insurance memo sent to its employees. In a normal year, the company’s healthcare costs rise about 7 percent. Due to Obamacare, the company said the coming fiscal year will see an 11.25 percent increase. The company can reduce expenses by only covering the people it absolutely has to cover. “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 states.
The change only applies to spouses currently employed and eligible for employer-provided health insurance. Stay-at-home moms and part-time workers won’t be affected. But the decision does affect 15,000 employees of other companies, and it’s not clear what effect that will have on their jobs. If many companies follow suit, costs could even out among employers. Couples, though, won’t be able to choose the best plan to cover their entire family. They’ll have to deal with two plans.
UPS is just the latest company to announce changes based on Obamacare. Businesses from restaurants to colleges to retail outlets admit they plan to cut back on employee hours to avoid paying for health insurance. Industry analysts say many more companies will get by with fewer employees or hire them to work fewer hours, just to stay under the cap.
The employer mandate, which the Obama administration decided to delay until 2015, requires companies with more than 50 employees to insure those working 30 hours or more per week. Cutting hours will hurt the poor, people putting themselves through school, and single mothers supporting families, who are often “barely scraping by with overtime.” In this well-done NBC investigation, even unions that support Obamacare acknowledge incomes are dropping—while the Obama administration denies the claims as “anecdotal.”
Popular clothing store Forever 21 became one of the highest-profile companies with Christian owners to acknowledge it will cut employee hours. Consumers took to social media this week to accuse the company of compromising its values, calling it just another greedy corporation. Forever 21 defended itself by saying it has promoted 421 part-time employees to full-time status since March. The 196 employees having hours cut make up fewer than 1 percent of the company’s 30,000 employees. The store did not say whether those 196 included the young and healthy or those with the greatest need for insurance.
Read WORLD’s previous reports on the effects of the Affordable Care Act.