Employers Behaving Badly

Chelsea Rice, August 26, 2013

In this week's news roundup: Two large employers announce a drastic change to their employee benefits plans, a rural hospital CEO is sentenced in a stalking case, and the results of a compensation survey fail to wow anyone.

If you're tired of preaching to your employees that they should work out, here's an alternative strategy for reducing healthcare costs: Cover fewer people. One way to do that is to stop extending benefits to spouses who can obtain coverage on their own.

Last week, United Parcel Service and the University of Virginia both announced they will stop covering employees' spouses on their healthcare benefits policies if the spouse is able to obtain insurance through his or her own employer. Both companies blamed rising medical costs and the healthcare reform law for this change.

UPS announced its new policy in a memo obtained by Kaiser Health News [PDF], which stated that while 33,000 spouses have health insurance coverage through UPS, approximately 15,000 could obtain coverage through their own employer. The University of Virginia is dropping employee spouses from its benefits plans for the same reason. Like UPS, this change will only affect spouses who can obtain coverage through their own employer.

The reaction to rising costs by these two large employers is a shift from tactics where large employers have simply applied higher premiums to employees who wish to keep their spouses covered.

Although the Patient Protection and Affordable Care Act was built on the promise to insure more Americans, the source of that insurance coverage appears to be shifting. Look for more announcements along these lines as employers crunch the numbers going into open enrollment season.

Chelsea Rice Chelsea Rice is an associate editor for HealthLeaders Media. Twitter

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