(CBS News) UPS has said it will drop 15,000 spouses of employees from its health insurance plan. The delivery company says one reason is the cost of the Affordable Care Act, commonly referred to as Obamacare. UPS is one of the first major firms to directly blame the controversial health care law for changes in coverage.
In a memo to employees, UPS announced, “Since the Affordable Care Act requires employers to provide affordable coverage, we believe your spouse should be covered by their own employer.”
The move will likely give “permission” for other companies to do the same thing, according to CBS News contributor and analyst Mellody Hobson.
“This is actually a really big move,” she said. “So they are a major employer. They employ almost 400,000 people. They have been very direct about why they're doing it — money. They say this move will save them $60 million. Their health care costs have been escalating about 7 percent a year, but next year they're saying they're expecting 11.25 percent. They say they just can't afford it. I think at the end of the day, it's going to give a lot of other big employers permission to do the exact same thing.”
The changes will be pinned to Obamacare, but as “CBS This Morning” co-host Charlie Rose pointed out and Hobson agreed, they are changes that the company wanted to make anyway.
She added, “Employers want healthy employees. They want people to have coverage, they're just struggling with how to pay for this.”
The changes, though, are not necessarily a bad thing for employees, Hobson said, because the spouses will be covered elsewhere. She pointed out, though, that “those days of where you used to sit down with your spouse and go over each other's benefit plans and pick the best one, those days are probably over.”
She said, “You won't have that option on a going-forward basis in many companies.”