The Economics Of Why UPS Threw 15,000 People Under The Big Brown Box Truck According To The Free ObamaCare Guide

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The Free ObamaCare Guide has released a report that sheds some light on some key points of this story that are not being covered in the news. According to the Free ObamaCare Guide's report, there was much more incentive for UPS's bottom line to cut coverage than to try to keep it in place.

Recently, the team at the Free ObamaCare Guide read the report from Kaiser Health News* and other outlets such as Fox News**, that starting in January 2014, UPS would no longer offer insurance coverage for the spouses of more than 15,000 UPS workers. After learning the details and then reading the memo issued by UPS, the team at Free ObamaCare Guide was disappointed that UPS seemed to place the blame for the increased healthcare costs they are projecting on the Affordable Care Act, also referred to as ObamaCare.

Brad Hayes, Communications Director for the guide said the following regarding the guides response.

"First and foremost, we should be clear that we have a lot of respect for UPS, which is a great American business that employs a lot of people. That said, we felt that the data released and the focus of the media seemed incredibly biased and does not bring to light some important points. Our organization believes that if UPS were to be perfectly candid with their employees, they would simply need to say that ObamaCare now provides them with the ability to save $60 million dollars by no longer offering this coverage because someone else will. Their decision had little to do with the ACA, this is just one of the advantages they can leverage. While this may be an inconvenience to some, UPS has the opportunity to save $60 million by dropping 15,000 people while placing the blame on ObamaCare."

According to the memo*** UPS provided its employees, it had seen annual insurance cost increases of 6% to 7% for general reasons, meaning not relating to the ACA and ObamaCare. This year they anticipate the increase will be 11.25% and UPS specifically attributed 4% of that rise to ObamaCare.

Here is specifically what UPS said in the memo:

“Historically, the cost of providing coverage to our union-free population has increased yearly, ranging from 6% to 7%. We anticipate an 11.25% increase from 2013 to 2014. That percentage includes 7.25% for trend, or health care inflation; and 4.0% due to the impact of the Affordable Care Act. Our goal for 2014 was to minimize or eliminate cost increases paid by the majority of our people.”

UPS stated that by no longer offering insurance benefits to those 15,000 non-union worker spouses, they will see savings of more than $60 million dollars a year. That $60M figure has been thrown around by some news agencies in a way that can mislead a person to believe that ObamaCare would have cost UPS an additional $60 million this year. This is clearly not true and the organizations that are perpetuating this false information are likely doing so for political reasons only. If we quickly do some math, we find out what the truth of the matter really is.

According to UPS estimates, ObamaCare would have cost them an additional 4% to cover those 15,000 spousal policies.

4% of $60 million is $2.4 million.

$2.4 million divided by 15,000 policies is $160 per policy, for the year.

UPS had two options: ask for an additional $15 a month from those who wanted to keep their spouse's insurance policies, or as Brad Hayes, Communications Director for the Free ObamaCare Guide has stated, "throw 15,000 people under the Big Brown Box Truck and save $60 million dollars for the year and blame it on ObamaCare."

Ultimately, the most comically ironic part of all of this is that the news outlets reporting that the ACA cost these people their healthcare are the same ones that cite "industry insiders", who say that ObamaCare will increase insurance rates by 30% or more in 2014. Obviously they missed the part of the UPS memo that indicates ObamaCare will only increase costs by 4%. If any organization should know the costs of ObamaCare compliance it is UPS, which has self-funded healthcare benefits and manages its costs directly.

Brad Hayes, Communications Director for The Free ObamaCare Guide continued,

"I personally get the impression that UPS is just like some media outlets that want to play both sides of the story and spin this to their advantage. The company saved $60 million by dropping coverage for 15,000 people while crying foul of ObamaCare and how it drastically increased costs, when in reality, according to UPS, it is only responsible for a 4% increase. Asking for a $15 a month increase versus dropping coverage for 15,000, or at least giving their employees that option, would have been a better way to handle this. UPS has no idea if these people will have better options elsewhere, nor does it seem that they really care. We won't ever know how many of those 15,000 would have opted to pay an additional $15 a month, all we do know, is the choice UPS made for them."

To read an extended version of this report which contains additional information on UPS, including specifics on the companies recent struggles and declining profits, and to gain access to numerous links to the source material used for the Free ObamaCare Guide report on UPS please go to http://FreeObamaCareGuide.com/UPS.

FreeObamaCareGuide.com provides consumers with unbiased information and easy access to other websites where consumers can get free information on ObamaCare.

Free ObamaCare Guide is based out of West Palm Beach, Florida.

*http://www.kaiserhealthnews.org/Stories/2013/August/21/Insurance-For-Working-Spouses-At-UPS.aspx (Published by Kaiser Health News, 8-21-2013)

**http://www.foxnews.com/politics/2013/08/21/employers-dropping-coverage-for-thousands-spouses-over-obamacare-costs/
(Published by Fox News, 8-21-2013)

***http://capsules.kaiserhealthnews.org/wp-content/uploads/2013/08/UPS-Spousal-Coverage.pdf
(Published by Kaiser Health News, 8-21-2013)

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