UPS is dropping health insurance for dependents! What does that mean for me?

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If you haven’t heard by now, UPS announced yesterday that it’s dropping health insurance coverage for around 15,000 dependents.
What does that mean for you?
It might mean something for you even if you’re not one of them. (If you are one of them, we can help you find an individual health insurance plan to replace what is being dropped!)
To get to the point… it won’t be surprising at all to see many employers, both large and small, taking a similar approach beginning in 2014. There are several reasons for this:

  • Cost. The price of health insurance is already very high, and it grows every year (reflecting the ever-increasing cost of healthcare itself). We are not attempting to be policitical here, but the “Affordable Care Act” unfortunately does not help address this issue. In fact, it adds new mandates, taxes, fees, and such that will result in higher prices.
  • Availability of individual health insurance options. Beginning in 2014 there will no longer be underwriting on individual health insurance policies. Nobody can be declined coverage or have pre-existing conditions refused or add to the price. So employers can tell employee dependents to go buy a policy on their own and know they can actually get one.

Here’s the kicker:
This will actually benefit many employees. Stick with us on this one. Under the Obamacare law, individuals who meet certain income requirements can have a portion of their premiums paid by the government (via a subsidy). If you make less than 4 times the federal poverty limit, you’ll get some kind of aid. The less you make, the more aid you’ll get.
BUT, that subsidy is not available if you have the option of being insured through your employer.
Now, employers with more than 50 employees will be required to offer health insurance to those employees. So most of them will offer that and cover a lot of the cost for the employees themselves — but many employers won’t cover the premiums for spouses and kids. So that would leave working families having to shoulder the burden of higher premiums for the spouse and kids, without the government subsidy. If they want to go into the individual market, they still will not get a subsidy because there is a group plan available to them (and the prices won’t be any better).
So in reality, many working families will be helped by employers not offering to cover dependents. Strange but true.
Want to talk about your family’s insurance? Your company’s insurance? Let’s do it! Hit the contact button at the right!