UPS health care cuts: What Obamacare will look like?

Pedestrians are seen reflected in the side of a UPS truck.

UPS has decided to cut health benefits for employee spouses who can get health insurance from their workplaces. The move is the latest by employers to reduce healthcare costs ahead of the Affordable Care Act, known as Obamacare.

Melissa Thomasson knows what it means when a company eliminates spousal health benefits. Her employer, Miami University, cut spouses off a few years ago.

“Luckily, I’m not married,” says Thomasson, a health economist at the university’s Farmer School of Business.

UPS’s decision is part of the new health-care reality. As Obamacare takes shape, she says, employers are re-thinking their health insurance policies.

"This will force some high cost members off of the health insurance plans and help companies rein in costs," she says, adding that some employers may use those savings to eventually give back to their workers. "Hopefully down the line we would see that in an improved ability of employers to offer more generous wage increases."

But some health experts say that UPS’s decision shows how companies are using Obamacare as a punching bag.  At the American Institutes for Research, Marilyn Moon says employers who had decided to put health benefits on the chopping block can now say, "‘Wow, here’s a great a way to do it and blame it on the Affordable Care Act.’"

Some employers are also trying a carrot-and-stick approach to shave health costs. Smokers, for instance, would have to pay higher premiums, but they’d be rewarded with discounts if they kick the habit.

Deborah Chollett, a health economist at Mathematica Policy Research, says companies have been tinkering health benefits for years, and people shouldn’t read too much into UPS’s decision. The change affects just a fraction of the shipper’s U.S. workforce.

"We may see other like-minded employers doing the same kind of thing, but with respect to the impact on employees?  It’s minimal," she says.

That’s because Obamacare, she adds, will offer workers or their spouses other health care options.

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