The Wal-Mart “promise” to over a million America workers has been healthcare coverage. Some 1.2 million of its 1.4 million full-time and part-time workforce participates in its healthcare coverage programs. That’s recently become more than Wal-Mart can afford and the nation’s largest retailer and private employer has announced that starting in January, it will no longer provide coverage to part-time workers.
Wal-Mart plans to end coverage for employees who work fewer than 30 hours a week, a change that affects 30,000 workers or about 2 percent of its workforce. In addition, it will raise premiums for its entire workforce – asking workers to share in the pain of higher costs. Bi-weekly premiums for the company’s lowest-cost employee-only plans will rise by 19 percent from $3.50 to $21.90. That may sound nominal, but for employees making an average of $12.92 an hour, it is by no means negligible.
This is all because of ObamaCare and its employer mandate that is set to kick in the 2015. Under President Obama’s signature plan, beginning next year (although that was conveniently delayed until after the elections), companies with 50 or more employees will be required to offer health insurance to those working at least 30 hours a week. This is rule alone is responsible for not just the loss of healthcare benefits for workers at Wal-Mart and other retailers like Target and Home Depot, but a reduction in worker hours and thereby paychecks.
"We had to make some tough decisions," Sally Wellborn, Wal-Mart's senior vice president of benefits, told The Associated Press.
The announcement comes after Wal-Mart said far more U.S. employees and their families are enrolling in its health care plans than it had expected following rollout of the Affordable Care Act…
That has had an impact on Wal-Mart's bottom line. Wal-Mart now expects the impact of higher health care costs to be about $500 million for the current fiscal year, or about $170 million higher than the original estimate of about $330 million that it gave in February.
But Wal-Mart is among the last of its peers to cut health insurance for some part-time workers. In 2013, 62 percent of large retail chains didn't offer health care benefits to any of its part-time workers, according to Mercer, a global consulting company. That's up from 56 percent in 2009.
Wal-Mart has been scaling back eligibility for part-time workers over the past few years, though. In 2011, Wal-Mart said it was cutting backing eligibility of its coverage of part-time workers working less than 24 hours a week. And then in 2013, it announced a threshold of 30 hours or under.
Wal-Mart, like most big companies, also is increasing premiums, or out-of-pocket costs that employees pay, to counter rising health care costs.
The White House and its allies on Capitol Hill are pushing the notion that ObamaCare is a win for Americans. The millions of American workers who have lost their healthcare coverage, however, know better. So do the so-called 29ers (part-time workers whose hours were trimmed to stay below the 30-hour threshold) or the businesses which have postponed hiring and investments for growth. And let’s not forget the two million full-time Americans workers who –according to the CBO- will be incentivized to drop out of the job market.
One year ago, ObamaCare rolled out into a bungled mess. However, the technology woes just scratched the surface of the problems with this healthcare “reform” plan. The fundamental problems with it can’t be patched up by a geek squad of Silicon Valley techies. Those problems spread across the healthcare industry and ripple across our national economy.
Our healthcare system needs changes, but government is not the best driver of those changes nor should it be the architect of reform. At best, government distorts the marketplace, drives prices for all higher, while expanding coverage on the dime of taxpayers. There are some winners, but when everyone loses overall, that’s no net gain.