Wal-Mart has announced that starting January 1, it will no longer offer health insurance to employees who work less than an average of 30 hours a week. Sally Welborn, senior vice president of global benefits, said the decision follows other major U.S. retailers who already made the decision to take the same action, including Target, Home Depot, Walgreens, and Trader Joe’s. The changes come as U.S. companies prepare for the January 2015 deadline under the Affordable Care Act, which requires companies with 50 or more employees to offer health insurance to those working at least 30 hours a week.
Wal-Mart told The Associated Press that starting Jan. 1, it will no longer offer health insurance to employees who work less than an average of 30 hours a week. The move affects 30,000 employees, or about 5 percent of Wal-Mart’s total part-time workforce [2% by company reports], but comes after the company already had scaled back the number of part-time workers who were eligible for health insurance coverage since 2011.
The company announced the changes in a blog post with the title “Providing Quality Health Benefits for Our Associates”, ironic given the subject.
For those employees who no longer have access, Wal-Mart has prepared a third-party option.
We will be working with a specialist, HealthCompare, to personally guide our associates through the process of finding the right, affordable health care.
The decision comes the day after posting another announcement to its website on a partnership with DirectHealth.com which will host insurance agents at about 2700 stores.
An Associated Press report noted that Wal-Mart wouldn’t receive a percentage of each sale but would likely benefit from related purchases in the store.
Wal-Mart won’t receive commissions on health coverage sales and hopes to benefit partly by luring customers into stores. DirectHealth is absorbing most of the costs to operate the program, Labeed Diab, senior vice president and president of Wal-Mart’s health and wellness division, told The Associated Press.
Pressure has increased on the company after 18 months of flagging sales, which correlates with erratic consumer spending.
As a result, full-time workers will also see premiums rise across the board as Wellborn noted that cutting the company’s total expenses was a concern as Wal-Mart had not passed on the increased costs yet.
“Health care costs keep going up for all of us in the U.S.,” Wellborn said on a conference call.
Wall Street Journal
Wal-Mart also is raising premiums for all workers next year. About 40% of enrolled workers are on its least expensive and most popular plan and will now pay $21.90 per two-week pay period, a 20% increase, starting Jan. 1. Across all three plans, Wal-Mart said it estimates workers will pay an additional $10 a pay period. The average Wal-Mart hourly worker earns $11.81 an hour.
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