Wal-Mart Eliminating Health Insurance For 30,000 Part-Timers

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Wal-Mart, the country’s largest private employer, is now cutting its health insurance coverage for 30,000 part-time U.S. employees as a result of ballooning health-care costs.

The company will no longer offer health insurance to employees working less than 30 hours a week, a Wal-Mart senior communications director told The Daily Caller. The 30,000 workers are just five percent of all Wal-Mart’s part-time workforce. That’s on top of previous cut-backs Wal-Mart has made to part-time health benefits since 2011, according to The Associated Press.

Wal-Mart is joining a long list of large companies — Target, Home Depot, Trader Joe’s — that have cut health insurance plans for part-time workers in the wake of the health-care law.

“We had to make some tough decisions,” Sally Wellborn, senior vice president of benefits, told the AP. “We are trying to balance the needs of [workers] as well as the costs of [workers] as well as the cost to Wal-Mart.”

The massive company employs 1.4 million people for both full- and part-time work. Of that, 1.2 million workers and family members take part in the company’s health care plan. Wal-Mart expects to pay $500 million more on health benefits this year just due to the growth of health care costs — already $170 million higher than its February estimate of $330 million.

Large retail chains have significantly shifted away from offering part-time workers health insurance in the past several years. According to consulting firm Mercer, 62 percent of retail chains didn’t offer health benefits to part-time workers in 2013, up from 56 percent that lacked benefits in 2009.

Target, Home Depot, and notably, Trader Joe’s created waves last year for dropping their health care coverage for part-time workers as well. That company argued that it was in their workers’ best interests to have their coverage canceled so that they’d be newly eligible for subsidies on Obamacare exchanges. Other companies, such as UPS, dropped coverage for some spouses as well.

While most part-time workers are losing coverage at Wal-Mart, even full-time workers who are eligible for the company’s health benefits will see their costs rise over the next year. Wal-Mart is upping employees’ share of premiums for all full-time workers. The company will take out of enrolled workers’ paychecks for a basic health plan will rise to $21.90 per pay period beginning Jan. 1, up from $18.40.

Wal-Mart is also cutting the percentage of out-of-pocket costs the company covers for full-time workers that use health reimbursement accounts and health savings accounts. Next year, the company will pay 75 percent of out-of-pocket costs after employees meet their deductibles, down from 80 percent this year.

President Obama addressed a question from a manager at large employer Millennium Steel last week about the ongoing rise is health care costs by advising the company to shop better. (RELATED: Obama To Questioner On Rising Health Costs: You’re Doing It Wrong) 

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Sarah Hurtubise