U.P.S. to End Health Benefits for Spouses of Some Workers

Tim Boyle | Bloomberg | Getty Images

United Parcel Service has told its white-collar employees that it will stop providing health care coverage to their spouses who can obtain coverage through their own employers, joining an increasing number of companies that are restricting or eliminating spousal health benefits.

U.P.S., the world’s largest package delivery company, said its decision was prompted in part by “costs associated with” the federal health care law that is commonly called Obamacare. Several health care experts, however, said they believed the company was motivated by a desire to hold down health care costs, rather than because of cost increases under the law.

In a memo addressed to employees, U.P.S. said, “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.”

The memo also estimated that about 33,000 spouses were covered under its insurance plan for white-collar employees and that “about 15,000 of these would have health care coverage available through their own employers.”

In explaining its move — which was first reported by Kaiser Health News and USA Today — U.P.S. told employees, “Since the Affordable Care Act requires employers to provide affordable coverage, we believe your spouse should be covered by their own employer — just as U.P.S. has a responsibility to offer coverage to you, our employee.”

“In an effort to maintain premiums at or below current cost,” Andrew McGowan, a U.P.S. spokesman, said, “U.P.S. made a change that affects a limited number of employees.”

U.P.S. is one of the biggest companies so far to drop spousal coverage for some segment of its work force, and its announcement was viewed by some as a harbinger of a broader trend in employers’ restrictions on health care benefits.

Large employers like Xerox and Teva Pharmaceuticals already impose surcharges for spousal coverage. And some cities, like Terre Haute, Ind., decided to follow what many of its private corporations were doing, by adopting a “spousal carve-out” so that working spouses would not be covered under its health plans.

The limits on coverage are occurring as some cities and companies are also considering changes to coverage for retirees under 65 and not eligible for Medicare, who might be shifted to the health insurance exchanges being established in states under the Obama health care law.

While the percentage of employers adopting changes in policies like U.P.S.’s new limits remains in the single digits, it is growing. According to a corporate survey by Mercer, a consulting firm, 6 percent of companies with 500 or more employees excluded coverage for spouses in 2012 if their spouses could obtain coverage through their own employer. That is double the percentage in 2008, Mercer found.

Mercer’s survey also found that 6 percent of employers required a surcharge for workers who keep their spouses on their health coverage even though their spouses could obtain coverage from their own employer. A Towers Watson survey found that 33 percent of large employers said they would impose such a surcharge by 2015.

The new U.P.S. policy does not apply to the children of those employees. Nor does it affect the company’s 250,000 unionized workers, who belong to the International Brotherhood of Teamsters. At the end of last year, the company had around 399,000 employees.

Several health care experts said companies were taking these moves partly because the federal health care law does not require employers to provide spousal coverage, but does require them to offer it to employees and their children. U.P.S. made clear that it would continue to provide coverage to spouses who did not have it through another employer.

Assessing U.P.S.’s new policy, Gary Claxton, a vice president and health care expert at the Kaiser Family Foundation, said, “It’s clear that it’s a competitive industry, and they want to cut costs.”

Barry Schilmeister, a senior health consultant at Mercer, said one reason more employers were embracing this policy was to help avoid being hit by the so-called Cadillac tax, which imposes a 40 percent tax on health care premiums above a certain threshold. In 2018, when that tax takes effect, the threshold will be $10,200 for individual coverage and $27,500 for family coverage.

“The Cadillac tax is going to be a serious extra cost for plans that exceed a certain level,” Mr. Schilmeister said. He added that with this move, “U.P.S. is in an indirect way addressing its overall costs — it’s going to lower its total exposure by potentially covering fewer people.”

Mr. Schilmeister predicted that many companies would shun the policy because it posed numerous problems. “It’s not going to be a popular move among employees,” he said.

He added that it would put many employers and employees in an uncomfortable position, with companies that adopt this policy often requiring employees to sign an affidavit affirming that their spouse was not being offered health coverage by another employer.

Many corporations have complained that their health costs would rise as a result of various provisions of the Affordable Care Act, like the requirement that insurance plans cover workers’ children up to age 26 and the prohibition against a lifetime cap on the amount insurance plans would pay for an employee’s health care. Both those provisions took effect in 2010.

Joanne Peters, a spokeswoman for the Department of Health and Human Services, pointed to numerous studies that predicted that employers would continue to offer coverage notwithstanding the law’s requirements.

Moreover, premiums have been rising modestly, she said. In a survey of employers released on Tuesday, the Kaiser Family Foundation found that the average annual premium for a family rose 4 percent in 2013, to $16,351.

Mr. Claxton, the vice president with the Kaiser Family Foundation, said he doubted provisions like the requirement to insure employers children up to age 26 were creating strains on U.P.S. and other companies.

“Those things are trivial in terms of expenses — just pennies per month,” Mr. Claxton said.

By: Steven Greenhouse NYTimes

Embrace Reality

A lot of Republicans seem to believe that if they can gum up the works and make this law fail, they’ll somehow be sticking it to me. But they’d just be sticking it to you.

President Obama, Saturday

“On the unstoppability of Obamacare: We have this system in which Congress passes laws, the president signs them, and then they go into effect. The Affordable Care Act went through this process, and there is no legitimate way for Republicans to stop it.” – Paul Krugman

Job Well Done


driver, Maurice Lynch was finishing his route in Wildwood Point when he noticed a lawnmower with no driver on it rolling through a yard toward a house.

Lynch backed up his truck and pulled into the yard, where he found the body of a large man lying face down in a three foot deep, muddy ditch. Lynch immediately called 911 and ran over to help the man, who showed no signs of life.

The man’s wife came running out of the house to join in what would become a life-saving rescue. After consulting with the 911 dispatcher, CPR was commenced with the wife giving mouth-to-mouth resuscitation and Lynch performing the chest compressions.

“At first it did not appear to be working,” said Anderson. “Then after a few more moments there was a slight movement.”

The duo continued CPR, and suddenly, the man caught his breath, his heart started beating and the color returned to his face.

Great effort Maurice Lynch, you are certainly a hero.

Hyundai, Kia labor unions vote to strike

SEOUL, South Korea—Labor unions at Hyundai Motor and its affiliate Kia Motors said workers voted to strike after talks with management for increased pay and benefits collapsed.

Hyundai union spokesman Kwon Oh-il said Wednesday that management refused all demands by the union during three months of annual talks.

The union wants workers to get improved benefits, including 10 million won ($8,900) support to help children of unionized workers seek jobs instead of entering college, a 130,000 won ($116) increase in monthly base income, bigger bonuses and full reimbursement of medical expenses if workers are diagnosed with cancer.

Kwon said 46,000 Hyundai workers will determine the extent of the strike early next week. Kia’s 30,000 workers are taking a similar step.

Hyundai said it had offered to resume talks with the union on Friday.

“We regret that the union has begun preparations to strike despite the company’s proposal to outline its offers in the next round of talks. There are also many aspects of the union’s demands that are hard to accept from the company’s point of view,” Hyundai said in a statement.

Kwon said Hyundai’s proposal was insincere and short of a full response to the union’s demands.

Hyundai and Kia, which together form the world’s fifth largest automaker, have been plagued by disputes with their unions for the past two years.

Hyundai’s latest earnings were hit by its union’s refusal to allow overtime for three weeks earlier this year and by the rising popularity of foreign cars in South Korea. European and U.S. carmakers lowered prices after free trade deals took effect. The maker of the Elantra said the industrial action resulted in lost output of 83,000 vehicles worth 1.7 trillion won ($1.5 billion).

The company estimated it lost production of 82,000 vehicles worth 1.7 trillion won due to 92 hours of walkouts by workers in 2012.

With labor strife at home and waning demand from Korean consumers, South Korea’s largest automaker has increasingly looked abroad to ramp up production. Hyundai is considering increased production in China, its chief financial officer said last month.



FAA: UPS jet crashes in Birmingham, Ala.

BIRMINGHAM, Ala. (AP) — A large UPS cargo plane crashed early Wednesday near an airport in Birmingham, Ala.

Federal Aviation Administration spokeswoman Kathleen Bergen told The Associated Press the A300 plane crashed on approach to the airport before dawn.

The plane was en route from Louisville, Ky., to Birmingham as UPS Flight 1354, Bergen said.

Toni Bast, a spokeswoman for Birmingham’s airport authority, said the cargo plane crashed near Birmingham-Shuttlesworth International Airport. Bast said the crash site is outside the airport’s perimeter fence and has not affected airport operations.

Neither Bergen nor Bast had any information on injuries.

A photo from the news site al.com showed a plume of smoke rising from the site in an open field. Several fire trucks and other emergency vehicles were lined up on a narrow road nearby.

Representatives for Atlanta-based UPS could not immediately be reached Wednesday morning.