New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

UPS Retirees Face Rising Health Care Costs: What You Need to Know

Healthcare Provider Update: Healthcare Provider for UPS: UPS is served by the UPS Health and Wellness Program, which provides a range of health benefits through various partnerships with healthcare providers and facilities aimed at supporting the well-being of its employees. Potential Healthcare Cost Increases in 2026: As 2026 approaches, healthcare costs are anticipated to surge significantly, primarily driven by the expiration of enhanced federal premium subsidies and rising medical expenses. Many states are facing projected premium increases, with some exceeding 60%. This scenario poses a daunting challenge as over 22 million Marketplace enrollees-92% of policyholders-could experience out-of-pocket premium hikes surpassing 75%. With insurers anticipating aggressive rate hikes and a landscape already strained by increased healthcare utilization, families and individuals will need to navigate these financial pressures carefully to maintain access to necessary healthcare services. Click here to learn more

'With rising premiums, shifting federal programs, and mounting medical debt, UPS employees must take a more deliberate approach to budgeting for health care in retirement to help avoid financial pitfalls that could derail long-term plans.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'As health care policy continues to evolve, UPS employees should regularly revisit their retirement strategies to account for potential coverage gaps and unexpected medical expenses that could strain fixed budgets.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

How rising health care premiums and shrinking federal support may affect pre-Medicare retirees.
The impact of medical debt, weakened consumer protections, and changing credit rules on retirement outcomes.
Adjustments to Medicaid and government health care programs that could disrupt early retirement plans.

Health Care Costs Continue to Climb for Retirees

The following article has been revised to reflect recent changes in health care policy and economics for individuals with longstanding corporate careers. UPS retirees and employees preparing for retirement are experiencing higher medical expenses, tighter household budgets, and new health care regulations—an especially relevant concern for those managing fixed incomes or long-term savings goals.

Premiums Rising, Coverage Shrinking

One key factor driving up costs is the anticipated end of Affordable Care Act (ACA) premium subsidies. If these subsidies expire, annual out-of-pocket premiums could increase by an average of $1,247—a 75% jump. ¹ This would affect UPS retirees relying on ACA plans prior to Medicare eligibility. Additionally, the One Big Beautiful Bill Act (OBBBA), passed in July 2025, calls for nearly $1 trillion in cuts to federal health care spending, with Medicaid bearing the brunt over the next ten years. ²

These reductions could result in up to 10.9 million Americans losing health care coverage by 2034, according to the Congressional Budget Office (CBO). ³

Eroding Consumer Protections

Policy changes are also exposing UPS retirees to greater financial stress. A federal ruling overturned a consumer-friendly rule that prevented medical debts over $500 from appearing on credit reports. ⁴ As a result, credit scores for millions could be affected—an issue that carries implications for mortgages, employment applications, and other financial decisions during retirement transitions.

The Weight of Medical Debt

Across the country, medical debt remains a persistent challenge: ⁵

- 40% of adults report having dental or medical debt.
- 1 in 6 borrowed money or used credit cards to pay off medical bills.
- Over 20 million owe $250 or more; 14 million owe over $1,000; and 3 million owe more than $10,000.
- Adults aged 50–64 carry more debt than those 65–79 due to delayed Medicare access.

These statistics underscore the pressure on UPS employees who retire before reaching Medicare eligibility.

Health Decisions at Risk

According to Tyson Mavar, a financial advisor with Wealth Enhancement, 'Credit scores may not be affected for those who hold medical debt, potentially resulting in delayed treatment.' This concern is amplified for UPS retirees who may have limited health care coverage and rising expenses.

While some households cope with medical debt by cutting back on food and housing, depleting savings, or borrowing more, these approaches only serve to contribute to poorer health and higher stress.

Government Program Adjustments

Medicaid changes under OBBBA bring added burdens, particularly for early retirees in rural areas. Adjustments include stricter eligibility verification, new work requirements, and increased co-pays of up to $35 per visit for those near the poverty line. These revisions may impact millions of rural Americans and bring added stress to rural health care facilities that are already stretched thin.

A $50 billion Rural Hospital Transformation Fund was announced, but it is expected to address just 37% of anticipated losses and is set to expire by 2032. ⁶

Why It Matters for UPS Families

Recent health care changes are reshaping retirement planning. Even though UPS offers a range of employee benefits and retirement options, not all workers transition into Medicare or employer-based retiree coverage without gaps. According to Fidelity, a 65-year-old individual retiring in 2025 may need to spend $172,500 health care throughout retirement—not including long-term care. ⁷

Future policy shifts could add thousands more to that estimate. Keeping an eye on health care policy and evaluating benefit elections are now essential components of retirement planning.

The Bottom Line

Navigating today’s health care system is like taking a road trip with higher tolls, fewer exits, and less reliable maps. UPS employees near or in retirement are encountering a shifting landscape of costs, coverage, and legal rules. If these developments are overlooked, retirement plans may be exposed to financial disruptions that are difficult to recover from.

Being proactive with coverage reviews, medical budgeting, and credit management can help retirees steer clear of costly missteps and adapt to an increasingly complex health care environment.

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Sources:

1. Business Insider. “ Millions of Americans could pay up to $1,247 more for Affordable Care Act health insurance next year ,' by Juliana Kaplan, 23 July 2025.

2. The Guardian. “ Democrats Use New Tactic to Highlight Trump’s Gutting of Medicaid ,” by Stephanie Kirchgaessner, 27 July 2025.

3. USA Today. ' Neary 11 million Americians would lose insurance under Trump's tax bill, analysis says ,' by Ken Alltucker, 4 June 2025.

4. Medicare Rights Center. ' Federal Court Reverses Federal Medical Debt Protections ,' by Julie Carter, 31 July 2025.

5. Peterson-KFF, Health System Tracker. ' The burden of medical debt in the United States ,' by S. Rakshit, M. Rae, G. Claxton, K. Amin, and C. Cox, 12 Feb. 2024.

6. KFF. ' A Closer Look at the $50 Billion Rural Health Fund in the New Reconciliation Law ,' by Zachary Levinson and Tricia Neuman, 4 Aug. 2025.

7. Fidelity. ' How to plan for rising health care costs ,' Fidelity Viewpoints, 12 Aug. 2024.

How can employees take full advantage of the retirement benefits offered by UPS, including the pension plan enhancements implemented in 2024, and what specific eligibility criteria must they meet to secure these benefits? In your experience, how have changes in the UPS pension plan over the years, especially the recent increases to service pension benefits, impacted the financial planning of UPS employees nearing retirement?

To fully take advantage of the UPS retirement benefits, including the pension plan enhancements implemented in 2024, employees must meet specific eligibility criteria, such as length of service and retirement age, which are outlined in the company's pension plan documents. Recent increases in service pension benefits, particularly for employees nearing retirement, have allowed UPS workers to better secure their financial future, giving them a more stable foundation as they transition out of the workforce. These changes have made financial planning more predictable for those close to retirement.

What are the steps that part-time employees at UPS need to follow to transition to full-time status, and how does this transition affect their eligibility for the UPS Pension Plan? Additionally, can you outline how the accrual of Credited Service works for both part-time and full-time UPS employees under the current plan rules?

Part-time employees at UPS must follow an established process to transition to full-time status, often based on seniority, availability, and performance reviews. Once they transition to full-time, their eligibility for the UPS Pension Plan improves, allowing for faster accrual of service credits. Accrual of Credited Service for part-time employees is typically prorated based on the hours worked, while full-time employees accumulate service credits more quickly, based on a 40-hour workweek under the current plan rules.

Considering the rise in healthcare costs, what healthcare options are available to UPS employees upon retirement, and how do the TeamCare plans differ between full-time and part-time retirees? How does the retiree medical coverage through TeamCare ensure that UPS employees maintain health insurance access without significant financial burden after retirement?

UPS offers comprehensive healthcare options through TeamCare for retirees, which vary for full-time and part-time employees. Full-time retirees generally receive more extensive coverage, while part-time retirees may have more limited options. TeamCare ensures that UPS retirees have access to affordable healthcare coverage post-retirement by providing plans designed to reduce the financial burden of rising healthcare costs, helping retirees maintain health insurance with manageable out-of-pocket expenses.

How does the UPS pension plan accommodate employees who have worked in multiple states or for different employers within the Teamsters system? What provisions are in place to ensure that their service credits are recognized and valued, particularly for those who may approach retirement age with a patchwork of employment history?

The UPS pension plan accommodates employees who have worked in multiple states or for different employers within the Teamsters system by recognizing their service credits across various jurisdictions. This ensures that even employees with patchwork employment histories can count their service toward pension eligibility, helping them qualify for retirement benefits despite moving between employers or locations within the Teamsters network.

What specific provisions exist for retirees at UPS who may choose to return to part-time employment post-retirement? Can you detail how this affects their pension benefits and any other retirement-related income they might receive, alongside UPS's policies regarding reemployment for retirees?

UPS retirees who choose to return to part-time work after retirement can do so under certain conditions without affecting their pension benefits. However, there may be limits on how much they can work without reducing their pension income. UPS’s policies on reemployment allow retirees to maintain some of their retirement-related income while taking on part-time roles, ensuring financial stability alongside continued employment.

How can employees at UPS navigate the process of filing a grievance if they feel their retirement benefits have not been administered fairly? What are the resources available to them, and how does the grievance procedure relate to the overall benefits they receive under the UPS pension and welfare plans?

If employees feel their retirement benefits have been unfairly administered, they can file a grievance through the UPS grievance procedure. This process often begins with discussions between the employee and management, with the option to escalate the issue to the union for formal dispute resolution. Resources such as union representatives and detailed plan documents are available to help employees navigate these disputes under the UPS pension and welfare plans.

With the introduction of new benefit contribution rates in 2024, how do these changes reflect UPS's commitment to its employees' financial futures? In what ways are employees encouraged to participate in decision-making regarding their benefits, and how might this shift impact employee satisfaction and retention rates at UPS?

The new benefit contribution rates introduced by UPS in 2024 reflect the company’s commitment to securing the financial futures of its employees. These changes encourage employees to be more engaged in the decision-making process regarding their benefits, which can lead to greater satisfaction and retention. UPS fosters this involvement by providing clear communication about how benefits are structured and how employees can contribute to their long-term financial health.

For employees looking to enhance their retirement savings beyond the UPS Pension Plan, what additional options are available, such as 401(k) or health savings accounts, and how do these integrate with the retirement benefits provided by UPS? Additionally, how can employees get the most out of these supplemental plans during their working years at UPS?

Beyond the UPS Pension Plan, employees have additional retirement savings options, such as 401(k) plans and health savings accounts (HSAs). These plans complement the pension benefits and allow employees to further enhance their retirement savings during their working years. UPS offers matching contributions for the 401(k), and employees are encouraged to maximize these plans to ensure robust retirement savings.

How does UPS support employees facing long-term disabilities in relation to their pension plans and health care coverage? Can you explain the interaction between long-term disability benefits and retirement benefits, particularly for employees who may leave the workforce earlier than anticipated due to health issues?

For employees facing long-term disabilities, UPS provides both long-term disability benefits and continued healthcare coverage, which are integrated with their pension plans. Employees who leave the workforce early due to health issues can rely on these benefits to maintain financial stability, as the long-term disability benefits help bridge the gap until they reach retirement age and are eligible for pension payments.

For employees seeking more information on their retirement benefits and options available through UPS, what channels are best for contacting the benefits department? Are there specific representatives dedicated to assisting employees with retirement questions to ensure they understand the nuances of their benefits effectively?

UPS employees seeking more information about their retirement benefits can contact the benefits department through designated channels, such as the employee portal or direct phone lines. UPS also provides representatives who specialize in retirement benefits, ensuring employees receive personalized guidance to understand the nuances of their pension plans and other retirement options effectively.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

UPS offers both a traditional defined benefit pension plan and a defined contribution 401(k) plan. The defined benefit plan includes a cash balance component, where benefits grow based on years of service and compensation, with interest credits added annually. The 401(k) plan offers company matching contributions and various investment options such as target-date funds and mutual funds. UPS also provides financial planning resources and tools to help employees manage their retirement savings.

UPS offers RSUs that vest over time, giving employees shares upon meeting vesting conditions. Stock options are also provided, allowing employees to purchase shares at a fixed price.