Walmart Cuts Employee Health Care Benefits

Oct 21, 2011 1:12pm
gty walmart ll 111021 wblog Walmart Cuts Employee Health Care Benefits

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Walmart is increasing employee health insurance premiums and no longer offering the coverage for new part-timers because of rising costs.

Walmart informed employees last week that it is eliminating healthcare for future part-time employees who work less than 24 hours a week, the New York Times reported.

The nation’s largest private employer with 1.4 million workers, most of whom are full-time,  made the changes as part of its open-enrollment period for next year’s coverage. Walmart does not disclose the percentage of full-time employees.

The company is continuing coverage for current part-timers, who previously didn’t have a minimum number of hours they had to work but were eligible after one year of employment.

“The current health care system is unsustainable for everyone. At Walmart we’ve made choices we have not wanted to make, like many employers in the country,” Greg Rossiter, Walmart spokesman, told ABC News.

The most popular plan for employees for “quality coverage” will cost $15 per pay period, every other week, an increase of $4 per pay period from last year, Rossiter said.

The company said the health care changes are not related to federal health care legislation.

While coverage for full-time employees has and will continue to include options for spouses, Rossiter said spouses of part-time workers are not covered, continuing with its current policies.

Walmart has provided coverage for part-time employees since 1996, according to Rossiter.

Health insurance premiums shot up 9 percent in 2011, nearly three times the rate of inflation and the most since 2005, a study from the  Kaiser Family Foundation/Health Research & Educational Trust in September showed. This year, annual premiums paid out for employer-sponsored programs topped $15,000. Increasing costs and a weak economic recovery have caused half of Americans to cut corners regarding their health.

Alan Sager, professor of health policy and management at Boston University’s School of Public Health, said it was not surprising to read about “yet another cut in health insurance coverage.”

“It’s sad because of the harm to people who lose coverage, because of the increase in worry, pain, and debt they will face as they are washed down the rapids of medical insecurity,” Sager said. “It’s not surprising because the financial deck is stacked against private-sector financing of health care for lower- and middle-income Americans.”

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