Last Thursday, US Uncut leaked an internal memo from Forever 21 informing full-time staff they would be demoted and lose their health benefits and paid time off. The story was reported Jezebel, Huffington Post, CBS Marketwatch, the Washington Post and also from right-wing organizations such as Fox News, Breitbart, and the Heritage Institute. A petition demanding Forever 21 retract their decision has collected nearly 30,000 signatures.
The leaker told us the decision was related to ObamaCare, but the company said the decision was based on expected store sales. Forever 21 made the decision in the middle of back-to-school shopping season, so this explanation doesn't pass muster. Now UPS is eliminating health insurance for half the spouses of white collar workers, but unlike Forever 21, UPS is explicitly blaming Obamacare.
President Obama delayed the provision requiring large employers to provide health insurance until 2015, so UPS is blowing smoke when they blame it on Obamacare. But I saw plenty of people, including Occupiers, parroting UPS executives blaming it all on Obamacare.
This rant ends in two lessons.
One is that US employers will squeeze workers when the economy is doing poorly...and when the economy rebounds. Companies have the full discretion of choices, but they like to attribute their internal decisions to anything other than their discretion.
Two, as evidenced by the recent poll revealing Louisiana Republicans blame Obama for the government's response to Katrina, a large portion of Americans blame all their troubles on the black guy rather than the guys actually screwing them over.
UPS to end spouse's health coverage for some
By STEVEN GREENHOUSE
The New York Times
August 23, 2013
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.
UPS, 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, UPS 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, UPS 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 UPS has a responsibility to offer coverage to you, our employee."
"In an effort to maintain premiums at or below current cost," Andrew McGowan, a UPS spokesman, said, "UPS made a change that affects a limited number of employees."
The limits on coverage are occurring as some cities and companies also are considering changes to coverage for retirees younger than 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.
Although the percentage of employers adopting changes in policies like UPS' 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 UPS 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 2012, 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. UPS made clear that it would continue to provide coverage to spouses who did not have it through another employer.
Assessing UPS' 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," Schilmeister said. He added that with this move, "UPS is in an indirect way addressing its overall costs — it's going to lower its total exposure by potentially covering fewer people."
Schilmeister predicted that many companies would shun the policy because it poses 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.
Last Thursday, US Uncut leaked an internal memo from Forever 21 informing full-time staff they would be demoted and lose their health benefits and paid time off. The story was reported Jezebel, Huffington Post, CBS Marketwatch, the Washington Post and also from right-wing organizations such as Fox News, Breitbart, and the Heritage Institute. A petition demanding Forever 21 retract their decision has collected nearly 30,000 signatures.
The leaker told us the decision was related to ObamaCare, but the company said the decision was based on expected store sales. Forever 21 made the decision in the middle of back-to-school shopping season, so this explanation doesn't pass muster. Now UPS is eliminating health insurance for half the spouses of white collar workers, but unlike Forever 21, UPS is explicitly blaming Obamacare.
President Obama delayed the provision requiring large employers to provide health insurance until 2015, so UPS is blowing smoke when they blame it on Obamacare. But I saw plenty of people, including Occupiers, parroting UPS executives blaming it all on Obamacare.
This rant ends in two lessons.
The leaker told us the decision was related to ObamaCare, but the company said the decision was based on expected store sales. Forever 21 made the decision in the middle of back-to-school shopping season, so this explanation doesn't pass muster. Now UPS is eliminating health insurance for half the spouses of white collar workers, but unlike Forever 21, UPS is explicitly blaming Obamacare.
President Obama delayed the provision requiring large employers to provide health insurance until 2015, so UPS is blowing smoke when they blame it on Obamacare. But I saw plenty of people, including Occupiers, parroting UPS executives blaming it all on Obamacare.
This rant ends in two lessons.
One is that US employers will squeeze workers when the economy is doing poorly...and when the economy rebounds. Companies have the full discretion of choices, but they like to attribute their internal decisions to anything other than their discretion.
Two, as evidenced by the recent poll revealing Louisiana Republicans blame Obama for the government's response to Katrina, a large portion of Americans blame all their troubles on the black guy rather than the guys actually screwing them over.
UPS to end spouse's health coverage for some
By STEVEN GREENHOUSE
The New York Times
August 23, 2013
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.
UPS, 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, UPS 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, UPS 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 UPS has a responsibility to offer coverage to you, our employee."
"In an effort to maintain premiums at or below current cost," Andrew McGowan, a UPS spokesman, said, "UPS made a change that affects a limited number of employees."
The limits on coverage are occurring as some cities and companies also are considering changes to coverage for retirees younger than 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.
Although the percentage of employers adopting changes in policies like UPS' 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 UPS 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 2012, 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. UPS made clear that it would continue to provide coverage to spouses who did not have it through another employer.
Assessing UPS' 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," Schilmeister said. He added that with this move, "UPS is in an indirect way addressing its overall costs — it's going to lower its total exposure by potentially covering fewer people."
Schilmeister predicted that many companies would shun the policy because it poses 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.
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