Last week the delivery company, UPS, said they will drop over 15,000 spouses of employees from its health insurance plan. The reason, the company says, is the cost of the Affordable Care Act, commonly referred to as Obamacare. UPS is the first major firm to directly blame the controversial health care law for the changes in coverage. In this memo to employees, UPS announced, “Since the Affordable Care Act requires employers to provide affordable coverage at a higher cost, we believe your spouse should be covered by their own employer.”
This is a really big move and can you blame them? UPS is a major employer of 400,000 people and has been very direct about why they are doing this…money! This move will likely give permission for other companies to do the same.
UPS further states that this will save them $60 million. That their health care costs have been escalating about 7% a year, but next year they are expecting an 11.25% increase.
Simply, they just cannot afford it! So true…who could? Employers want healthy employees. They want people to have coverage, but they are struggling with how to pay for it.
Another twist on how the government underestimates the intellect and strength of small businesses is…it will be less expensive for the businesses to pay the penalty than to insure their employees. What some do not know is that this penalty money will go directly into the government’s pockets.
So what to do…the battle has just begun and it will be ugly, unfortunately. The decision to chose your health insurance in the Marketplace begins October 1, 2013. Become more informed on the Affordable Health Care Act and tune into The Wellness 411 Show every third Tuesday at 4:30 on WCHE1520am.
America was built on small business. I am just not sure how much longer they can endure the burden of our government’s shortsightedness in budgeting.