Delta Airlines is looking at an Obamacare-triggered increase of nearly $100 million next year in the cost of providing health care to approximately 160,000 active and retired employees and family members enrolled in the company program. United Parcel Service has decided to exclude from the company’s plan 15,000 working spouses of employees, since the spouses are eligible for coverage with their own employers. UPS expects to save about $60 million a year as a result.
These developments came to light recently with disclosure of a letter from Delta to the Obama administration and a UPS memo to its employees. The information dramatically shows the consequences — intended and unintended — from implementation of the health care law opposed by a majority of Americans in poll after poll. Not only is Obamacare starting to wreak havoc with employer costs but it also is negatively affecting job growth as already evidenced.
The Delta letter referred to a meeting with an ACA official and representatives of large employers. “The ACA will result in increasing costs for both companies and our employees and will also reduce the benefits provided,” the letter said. Major drivers of higher costs include the mandated annual reinsurance fee of $63 per covered participant if 2014 — which “represents more than $10 million added to the cost of providing health care next year.” The fee supposedly will help stabilize state exchanges as they start up, but “provides absolutely zero direct benefit to our participants,” Delta said, and “is essentially a direct subsidy from us and our employees to those who participate in the exchanges.” Call it an effect of Obama’s “spread the wealth” philosophy.
Under the ACA provision for covering children until age 26 in their parents’ plan, more than 8,000 children have been added to Delta’s rolls, “resulting in a permanent increase in our overall costs of about $14 million per year,” the company said.
Delta also pointed out looming “negative unintended consequences of the ACA,” including the rule that employers must provide coverage for employees working 30 or more hours weekly or pay fees for them. “Many employers are planning to reduce employee’s hours to less than 30 per week” to get around the rule. Delta’s letter said the company favors raising the limit to 40 hours per week.
Even the pro-Obamacare unions are unhappy with the presumably unintended consequences. Three major unions, including the Teamsters, have warned the Democrat leaders in Congress that elements of the ACA “will destroy the very health and wellbeing of our members along with millions of hardworking Americans.” In a letter to the Dems, the unions say unless changes are made in the law, Obamacare will “destroy the foundation of the 40-hour work week that is the backbone of the American middle class.”
The iceberg is bearing down on the Titanic.