Walmart Reduces Health Care Coverage
Rising health care costs are taking a toll on Walmart and its workers. The nation’s largest private employer is scaling back health care coverage for future part-time workers while raising premiums for many of its full-time workers.
Among the changes:
- Premiums will increase for all employees with the amounts depending on the plan. For the most popular health care plan, an associate who paid $11 per pay period will be paying $15 per pay period next year – a 36 percent hike.
- Walmart will now provide $500 for families to use for health care expenses that are not covered, down from $1,000. For individuals, Walmart will contribute $250 for associates, down from $500.
- Future part-time workers working less than 24 hours a week will no longer receive health-care coverage. Existing employees working those hours won’t be affected.
- Any new employees who average 24 hours to 33 hours a week will no longer be able to include a spouse as part of their health care plan, although children can still be covered. Existing employees working those hours won’t be affected.
- Tobacco users will see premiums increase by about 40 percent. Those with a spouse would pay $141 per pay period for one plan compared with $108 per pay period for a non-tobacco user.
- Preventive care such as annual checkups remains fully covered.
"Over the last few years, we’ve all seen our health care rates increase and it’s probably not a surprise that this year will be no different," Walmart spokesperson Greg Rossiter told The New York 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."
At Walmart, part-time associates become eligible for healthcare coverage after working for the chain for one year. The company defines full-time workers as anyone who works 34 or more hours per week.
MarketWatch noted that according to the Kaiser Family Foundation, U.S. workers paid $3,997 for family health-care coverage they got through their jobs in 2010, 47 percent more than the amount in 2005, while their wages rose only 18 percent. Employers, in contrast, paid 20 percent more toward their employees during the same period.
- Wal-Mart Cuts Some Health Care Benefits – The New York Times
- Wal-Mart cuts some health care coverage – The Associated Press/Bloomberg Businessweek
- Wal-Mart trims some U.S. health coverage – Reuters
- Wal-Mart ups health-care premium, trims benefits – MarketWatch
Discussion Questions: How important are health insurance benefits in workers’ decisions on where to look for employment? Is health insurance as a benefit any more or less important in retail than it is in other industries?