Retail giant Wal-Mart announced Tuesday that it will end health insurance coverage for 30,000 part-time workers, while the company plans to increase premiums for other workers, citing the Affordable Care Act. The announcement could actually be a boon to even more progressive health reform efforts.
The Wall Street Journal reported Wednesday that Wal-Mart is blaming rising costs for the moves, stating that the company's insurance costs are expected to increase $500 million more than it had forecast for the year ending January 31. In response, the company plans to drop coverage for employees who work less than 30 hours per week and will raise premiums for all other workers by 20 percent beginning January 1. A Wal-Mart benefits executive would not tell the Journal how much the company expected to save as a result of the changes.
Starting in 2015, the Affordable Care Act will require employers to offer health coverage to employees working at least 30 hours a week or pay a penalty, so the move won’t generate any fees for the company under the employer mandate.
As the paper noted, this isn’t the first time Wal-Mart has pared back health benefits in recent years. Prior to 2011, the company offered health insurance coverage to part-timers who worked at least 24 hours per week. In 2012, the company stopped offering health coverage to new workers who worked less than 30 hours a week; the policy change announced this week ends coverage for those working 30 hours or less even if they were already employed by the company in 2012.
Wal-Mart’s premium increases met with understandable frustration among employees, who earn an average $11.81 an hour. Its decision to end coverage for part-timers, on the other hand, may actually be a good thing for those particular workers. As Vox’s Sarah Kliff explains, many part-time workers can’t even afford their employers’ insurance plans, and Obamacare’s insurance subsidies will offer part-timers significantly greater financial assistance than the company itself would provide.
Moreover, a shift away from employer-provided coverage could help achieve a single-payer insurance model, a goal long sought by many progressives. At the very least, as more individuals move onto Obamacare’s health care exchanges, it’s not inconceivable that health care consumers will demand greater competition and lower costs – which could then revive the push for a public option. Wal-Mart may not have had that in mind when the company made its announcement yesterday, but it may have helped nudge the country a little closer in that direction.