The number of employers whose company health benefits plan cover the working (elsewhere) spouses of their employees has just been reduced by one — and it’s a big one, too.
UPS announced in a memo to employees that it would cut up as many as 15,000 employees’ working spouses from its health coverage rolls.
Citing a trend among “other companies” to refuse coverage to spouses employed by another company that offers coverage, the undated memo cites the Patient Protection and Affordable Care Act as providing the impetus for the “design change.”
In fact, it referred repeatedly to the PPACA as the reason for its decision to cut back on spousal coverage.
“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. 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.”
UPS said in the memo that it first looked at what other companies were doing about working spouse coverage. It concluded that 35 percent of those examined “plan to exclude working spouses eligible for their own employer’s coverage in 2014.”
Just who UPS surveyed wasn’t revealed. The 35 percent is high compared to recent studies that have suggested less than 10 percent of employers are considering dropping working spousal coverage.
Nonetheless, UPS said that “benchmarking analysis tell us that about 15,000 of these (working spouses) would have health care coverage available through their own employers.” Hence the estimate of how many would be cut off.
The company estimated it could save about $60 million a year in health benefit spending by excluding working spouses from coverage.
UPS said in the memo that its verification process would determine whether a spouse was eligible for coverage by another company plan. It will require employees “to certify the eligibility of each of the dependents you’ve listed as eligible for the plan next year.”
The 19-page memo, produced in part in a Q & A format (“My spouse is on Medicare. Can he still be enrolled in the Plan? Yes.”), had an answer for virtually every possible scenario that an employee might toss at HR. It also went beyond the spousal cut-off message to discuss other changes and updates in the benefits package.
For instance, it included a long section on the new $150 monthly “tobacco premium” deducted from a worker’s pay if either the worker or covered spouse uses tobacco. It listed all tobacco products that are taboo, from cigarettes to hookah and even electronic cigarettes.
The company memo touted UPS’s “Quit for Life” program that helps smokers give up the habit and the premium. But it admitted in one Q &A that it really couldn’t tell if a “Quit for Lifer” had taken up tobacco again — it was up to the individual to inform the company of the “changed tobacco status.”