NEW YORK Wal-Mart Stores Inc. plans to eliminate health insurance coverage for most of its part-time U.S. employees in a move aimed at controlling rising health care costs of the nation's largest private employer. <\/p>\n
Starting Jan. 1, Wal-Mart told The Associated Press that it will no longer offer health insurance to employees who work less than an average of 30 hours a week. The move, which would affect 30,000 employees, follows similar decisions by Target, Home Depot and others to eliminate health insurance benefits for part-time employees. <\/p>\n
\"We had to make some tough decisions,\" Sally Wellborn, Wal-Mart's senior vice president of benefits, told The Associated Press. <\/p>\n
Wellborn says the company will use a third-party organization to help part-time workers find insurance alternatives: \"We are trying to balance the needs of (workers) as well as the costs of (workers) as well as the cost to Wal-Mart.\" <\/p>\n
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. Wal-Mart, which employs about 1.4 million full- and part-time U.S. workers, says about 1.2 million Wal-Mart workers and family members combined now participate in its health care plan. <\/p>\n
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. <\/p>\n
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. <\/p>\n
\"Retailers who offer part-time benefits are more of an exception than the rule,\" says Beth Umland, director of research for health and benefits at Mercer. <\/p>\n
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. <\/p>\n
Wal-Mart, like most big companies, also is increasing premiums, or out-of-pocket costs that employees pay, to counter rising health care costs. Wal-Mart told The Associated Press that it's raising premiums for all of its full-time workers: For a basic plan, of which 40 percent of its workers are enrolled, the premiums will go up to $21.90 per pay period, up from $18.40, starting Jan. 1. <\/p>\n
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