UPS Healthcare & Obamacare

August 27, 2013: In response to questions to Teamsters for a Democratic Union (TDU), we consulted an expert attorney who advises healthcare plans regarding compliance with Obamacare. Here are his responses to members’ questions.

Q. January 1, 2014, is a trigger date for implementation of Obamacare (the Affordable Care Act). Does UPS need to have any new health plans in place prior to that date or face financial consequences?

A. No. It really does not matter when a new healthcare coverage kicks in at UPS because, from the Affordable Care Act’s standpoint, affected UPS Teamsters will be covered with adequate care both in their current coverage and in the newly negotiated coverage.

This assumes that that UPS employees will continue to have the coverage they have in place now until it is replaced by any new coverage that is being negotiated, and assumes that any new coverage meets the Obamacare minimum standards for affordability and provides the minimum value required. The TeamCare coverage meets these criteria.

Q. Can UPS maintain a one-year waiting period for newly hired part-timers to get health care, or does this contract provision violate Obamacare?

A. UPS can maintain a one-year waiting period for part-timers, with certain limitations. Obamacare requires that employer health coverage for full-timers must begin within 90 days of the date they are hired into a classification that was eligible for coverage, but if an employer provides health coverage for part-timers, they can have an eligibility requirement based on the number of hours worked, up to 1200, and the 90-day clock could be started when they reach that eligibility threshold. Such an eligibility requirement would have to be clearly stated in the TeamCare Plan itself.

Q. Are any UPS Teamster health plans going to be affected by the “Cadillac” tax imposed on health funds or employers with high-cost plans.

A. No. In fact, the current cost of TeamCare and the other various health plans covering UPS Teamsters cost about half of the Cadillac cost threshold. Benefits can be improved and maintained and will still be well under the threshold.

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