Wal-Mart cuts some health care benefits: why reform won’t bring them back

at 10:47 AM ET, 10/21/2011


(John Gress - REUTERS)
Wal-Mart will drop health insurance benefits for its part-time workers, the New York Times reports this morning. “Over the last few years, we’ve seen our health care rates increase and it’s probably not a surprise that this year will be no different,” spokesman Greg Rossiter told the Times. “We made the difficult decision to raise rates that will affect our associates’ medical costs. The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

Wal-Mart didn’t blame the health reform law for the decision; rather, the company pointed a finger at the steadily rising cost of health care. But, it turns out, the health reform law won’t do much to encourage Wal-Mart to provide coverage for these employees either.

The health reform law’s employer mandate does require large employers to offer insurance starting in 2014. But that requirement only applies to full-time workers, not part-time. For those who don’t put in a full work week, employers don’t face any penalty for not providing a health plan. The only place that part-time workers factor in, at all, is in determining whether or not a company is “large,” and has more than 50 employees. Wal-Mart will undoubtedly meet this 50-employee threshold.

“You don’t have to cover the part-time employees but they do count in calculating how many employees you have,” says Tim Jost, a law professor at Washington & Lee University. “In terms of the penalty though, they don’t count.”

One weird twist to this: Wal-Mart’s definition of a “part-time employee,” according to the Times, ranges between 24 and 33 hours-per-week. The health reform law sets the threshold slightly lower, counting anyone who works 30 hours-per-week as a full-time employee. “Their definition of part time did seem to include people who might be considered full time under the health reform law,” says Judy Solomon, vice president for health policy at the Center on Budget Policy and Priorities. This means that Wal-Mart could, come 2014, be required to cover some of the employees it’s now dropping.

Wal-Mart was an early supporter of a health reform law that required companies to provide insurance. “We are for shared responsibility,” the company wrote in a June 2009 letter to the White House. “Not every business can make the same contribution, but everyone must make some contribution. We are for an employer mandate which is fair and broad in its coverage.” Wal-Mart did indeed get a mandate, but also one that allows a fair amount of wiggle room in how much coverage a company must provide.

 
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