is it really cheaper to move part-timers health-care to teamsters

[brown_trousers]

I know its already been decided... but im just wondering how it can be cheaper for UPS to move part-timer's healthcare to the teamster's. It seems that having such a young demographic of PTers with lots of turnover, would actually be a cheap demographic to insure. Especially compared to the older demographic of FTers that actually utilize their benefits With costly medical procedures.

Id imagine that the overall cost of PTers insurance for a year, divided by the number of PTers that worked that year, would be a pretty low number (compared to other healthcare plans)

 

[PiedmontSteward]

I know its already been decided... but im just wondering how it can be cheaper for UPS to move part-timer's healthcare to the teamster's. It seems that having such a young demographic of PTers with lots of turnover, would actually be a cheap demographic to insure. Especially compared to the older demographic of FTers that actually utilize their benefits With costly medical procedures.

Id imagine that the overall cost of PTers insurance for a year, divided by the number of PTers that worked that year, would be a pretty low number (compared to other healthcare plans)

From my understanding of it, UPS wanted to get out of the health care industry and was able to use Obamacare as part of the reason to justify it. UPS essentially administered the benefits for those in the company plans and that includes a ton of overhead.

 

[Benben]

6 years ago yes, but UPS screwed that up trying to save a dime. 6 years ago we had college kids loading our trucks. They were in college so we knew they could tell the difference between a 2000 pal and a 7000 pal so the drivers were happy! The college kids wanted 2 things; Beer money and insurance (encase they broke their arm balcony-diving after drinking their beer.....that's the only time a male college kid goes to the doctor....ok that and when the girl down the hall gave them an itch somewhere not so fun to have an itch.) The long and short of it is the insurance rarely, if ever, got used.

UPS changed the game and made new workers wait over a year before they could get their insurance. The college kids weren't so dumb as to realize they make the same money for doing 1/10th the work everywhere else and without the insurance working PT at UPS had no upside. As we lost the college kids they were replaced not by other college kids but with people who are there ONLY FOR THE INSURANCE, again, the pay is the same everywhere else and the work is sooooo much easier everywhere else! The new PT'ers are not there for insurance for themselves but insurance for their family! So now the cost of insurance goes way up due to covering a family of 4+ where as it used to be just a college guy wanting a beer!

UPS saved a dime but it cost them dollars to do so. Now don't get me wrong, UPS is smart as hell. Look at what they just did last month................They just pawned healthcare costs off onto the Teamsters!!!!!
The costs for healthcare always goes up and in a few years the Teamsters are going to be forced to either raise the deductable AND copay or decrease coverage. Either way the teamsters will be blamed by the members (and rightfully so!) as UPS laughs all the way to the bank. The sick part of this is they still won't be hiring the strong-backed college kids who can count and won't use the insurance!!!

 

[Brownslave688]

It's not cheaper so much as accounting wise it'll look much better for investors.

 

[Benben]

Brownslave, I hear what your saying but I don't think that's the driving motivator. The stock hit an all-time high last month and will do so again by the end of the year.

 

[PiedmontSteward]

Brownslave, I hear what your saying but I don't think that's the driving motivator. The stock hit an all-time high last month and will do so again by the end of the year.

UPS wanted to drop that $6 billion liability from their books because -- as BrownSlave said -- it looks better for investors. Looking better for investors equals more profit. Profit is the only driving motivator a publicly traded company like UPS possesses.

Also, I think your analysis of the new hire workforce is a bit off. UPS has traditionally hired people in the 17-30 year old demographic for PT work. Very rarely do I see a PT'er get hired over the age of 40. Hoaxster posted here that the corporate "vision" for the workforce is college-aged PT'ers that move on after 4-5 years once they graduate college; the wear-and-tear of working in a hub becomes a big deal after that time frame.

 

[Benben]

They didn't drop the liability, they just fixed their costs and the teamsters now have to deal with that "variable" and will take the hit if the coin comes up tails that particular year. The liability is still baked into the stock price and it sure as hell won't hide when the financials are released every quarter. Investors know, or should know, how to read the reports so someone has to explain it to me how it looks better because it is still a liability.

As for the "vision" I wish it was reality because I have yet to see a 18-22 year old start on the pre-load in 2013. I have seen a 70% quit rate, or shall we say a 70% failure-to-come-back-after-the-break rate.

 

[brown_trousers]

It seems to me... looking at it from a bottom line standpoint. That they would pay less per PT employee being self insured as opposed to what they will pay per employee to have teamsters buy an insurance plan for us. But brownslave makes a good point.

Maybe my hub isnt a good indicator, but all the PTers I work with are 18-26 yrs old, and most dont even seem to know they have great coverage, probably because they rarely if ever go to the doctor. Seems like it would just be really cheap to keep them insured on the company plan.

 

[PiedmontSteward]

It seems to me... looking at it from a bottom line standpoint. That they would pay less per PT employee being self insured as opposed to what they will pay per employee to have teamsters buy an insurance plan for us. But brownslave makes a good point.

Maybe my hub isnt a good indicator, but all the PTers I work with are 18-26 yrs old, and most dont even seem to know they have great coverage, probably because they rarely if ever go to the doctor. Seems like it would just be really cheap to keep them insured on the company plan.

Regardless of how often a PT'er was using their insurance, UPS was/is still required to contribute a certain dollar amount per PT'er on each bargaining unit member's behalf into the either the company plan or a Taft-Hartley plan in order to keep it funded. For a single PT'er (no spouse/family), this was roughly $450-500/month.

They're making similar/greater contributions to TeamCare under the TA, but are no longer fiscally responsible for retiree health care liabilities (which resulted in a massive hit on their books, as retiree/near-retiree health costs must legally be shown as a financial liability to investors) and administration.

 

[Benben]

Regardless of how often a PT'er was using their insurance, UPS was/is still required to contribute a certain dollar amount per PT'er on each bargaining unit member's behalf into the either the company plan or a Taft-Hartley plan in order to keep it funded. For a single PT'er (no spouse/family), this was roughly $450-500/month.

They're making similar/greater contributions to TeamCare under the TA, but are no longer fiscally responsible for retiree health care liabilities (which resulted in a massive hit on their books, as retiree/near-retiree health costs must legally be shown as a financial liability to investors) and administration.

The second part of your post is the best/most information given in all this yet, thank you! I need to research this and do some thinking. I had not factored in the retire's healthcare costs.

As for the first part its a bit more murky. I was a doctor before coming to UPS, and I promise you it gets a bit more complicated. Self insured entities realize massive gains when their workers are younger and access their healthcare programs less frequently or more as a preventive measure than for urgent or critical care. That's the entire principle behind ObamaCare, lowering the cost by spreading the risks. This is why you saw a large movement into plans "administered" by the likes of BC/BS or Principle. They may have been required to contribute but at the end of the year they either received a rebate or a decrease in the next years premiums. IMO, This is a primary driver in the recent push to get management to stop smoking.

I need to do some thinking.

 

[Anonymous 10]

I think it might have something to do with the 6,000,000,000 that ups has to have in the bank at all times starting in 2015 to cover the liability. I think it has something to do with Obama care.

 

[Nimnim]

Ok, first, I'm enjoying this conversation as it has a similar vein to some thoughts I've had on the subject.

I was a doctor before coming to UPS, and I promise you it gets a bit more complicated.

Second, you were a doctor, and upon leaving your practice went to work for UPS? Unless you were hired off the street as a driver I can't see the rational for this. Even then it's a little iffy to me without asking probing questions.

 

[brownmonster]

Ok, first, I'm enjoying this conversation as it has a similar vein to some thoughts I've had on the subject. Second, you were a doctor, and upon leaving your practice went to work for UPS? Unless you were hired off the street as a driver I can't see the rational for this. Even then it's a little iffy to me without asking probing questions.

​I was a rocket scientist but got layed off when they ended the shuttle program.

 

[Catatonic]

​I was a rocket scientist but got layed off when they ended the shuttle program.

​In that case, I guess you piss in a half-parabola.

 

[Benben]

Met and married a great girl while at school in Kansas City. Being young I said, "sure I'll move to your home town after I graduate." Our city has the highest concentration of doctors in my field to total population, something I did not know before moving.

Out of school I was an associate in a multiple doc practice then went into a partnership with an older doctor and finally opened my own office. The office paid the bills but not much more.

 

[Inthegame]

I was a doctor before coming to UPS...

Did you stay at a Holiday inn Express last night.

 

[Wally]

Why don't they give us the option to opt out of coverage? Many part timers are covered under insurance by parents. Those that opt out would get more per hour.

 

[East coast navy]

With this issue the younger work force wouldn't use their insurances as much or at all. The company would get a better group rate. Also would get a bigger tax break. I think everyone is right on this. Yes the company is making lots of money but working quarter to quarter is not a good way to make money. You are taking a big risk on a long term scale. Something will give. Next is treating your employees like crap. If you treat them well. They will take care of you. This is a method that has been used for thousands of years. If not you would get an uprising. Our problems are because of one man. SCOTT DAVIS. He is a penny pincher. This is what happens when you make an accountant your CEO. They are good to have in the company. There just not good at the top. There needs to be someone above him to make the big decisions. Accountants are not willing to take risks or seen as visionaries.

 

[Catatonic]

This pretty well explains it:

Rahm Emanuel: You never want a serious crisis to go to waste - YouTube

 

[Ouch]

Ups has raised the deductible every year on the ins. By raising the deductible there saving money on premiums, higher deductible=lower premium. They will be saving enough money so that when you get the raises twice a year, its not costing ups cause there saving money on the premium. Really we are losing more than just a benefit we are losing our raise also.