(Bloomberg) — United Parcel Service Inc.’s decision to drop health benefits for 15,000 of its workers’ spouses may be a sign of the future, as U.S. businesses grapple with rising medical bills and the added burdens of the Affordable Care Act.
The nation’s fourth-largest employer said yesterday that beginning Jan. 1 it will no longer offer health coverage to spouses who can get it through another company. UPS cited the ACA as part of its impetus, saying it would increase costs and provide other insurance options for spouses.
The shift is a sign of corporate America’s increasing willingness to make deep changes to benefits once taken as a given by U.S. workers. The health care overhaul, estimated to boost expenses for businesses by 2% to 4% next year, is adding to the momentum that already spurred higher deductibles and surcharges for covering dependents.
“The feeling is, drastic times call for drastic measures,” says Rich Fuerstenberg, a partner at New York-based benefits consultant Mercer Inc. “What employers are adopting today are strategies that were considered crazy or out of the mainstream just a few years ago.”
The benefits change will only affects workers in the U.S., according to a memo to employees published yesterday by Kaiser Health News. Spouses who don’t work or lack employer-provided insurance will still be covered by the Atlanta-based company’s health plan, as will children of workers, according to the memo. The change won’t affect 250,000 Teamsters union workers or employees in other countries.