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UPS to drop spouse health insurance, blames ACA

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in Compensation and Benefits,Human Resources

UPS will stop offering health insurance to many employees’ spouses next year, a move the company said was prompted by fears that the Affordable Care Act health care reform law won’t be affordable after all.

UPS estimates the move—which affects some 15,000 spouses who can obtain health coverage from their own employers—will save $60 million in 2014, according to a report by Kaiser Health News. In a memo to employees, UPS said it would reduce premiums for those whose spouses are dropped from the insurance plan.

Starting in 2015, the ACA requires most large employers to offer health benefits to employees and their dependent children, but not spouses or domestic partners.

A recent Towers Watson survey found that 4% of employers now exclude spouses from health coverage; 8% said they would in 2014. About 20% of employers said they collect a surcharge for spouses who could buy insurance through their own employers.

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