Via Daily Finance:
Walmart Stores (WMT) 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.
Starting Jan. 1, Walmart 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.
“We had to make some tough decisions,” Sally Wellborn, Walmart’s senior vice president of benefits, told The Associated Press.
Walmart 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 Walmart 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.
“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.
Walmart has been scaling back eligibility for part-time workers over the past few years, though. In 2011, Walmart 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.
Walmart, like most big companies, also is increasing premiums, or out-of-pocket costs that employees pay, to counter rising health care costs. Walmart 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 each pay period, up from $18.40, starting Jan. 1.