Just days after Democrats were crowing about their new jobs report, the biggest employer in the country has finally decided to make drastic cuts to their health insurance coverage. Wal-Mart announced this week that they would be eliminating health insurance for many of their part-time employees starting in January, making them one of the last major retailers to protect themselves from Obamacare’s burdensome costs.
Starting at the first of the year, the retail giant will no longer offer health insurance plans to those employees who work less than 30 hours a week, a move that will affect some 30,000 employees nationwide. This only accounts for approximately 5% of Wal-Mart’s workforce, but this isn’t the first move the chain has made towards mitigating the damage. In 2011, they already made significant cuts to the number of part-time workers eligible for benefits.
Wal-Mart is the employer of record for 1.4 million Americans, most of whom participate in the company’s healthcare coverage. The company has seen their bottom line take a hit with the expanded requirements of the Affordable Care Act, a law that has been anything but affordable for American businesses. To stay ahead of the game without raising prices, Wal-Mart has to find ways around the $500 million in healthcare costs they expect to shoulder this year.
One by One
Health care coverage for part-time workers has never been a universal guarantee by any means, but the number of companies dropping it has risen substantially. Wal-Mart now joins chains like Target, Home Depot, and Trader Joe’s in reserving their healthcare coverage only for those employees who work full time. According to Trader Joe’s, workers are better off getting insurance from the Obamacare exchange than from the company.
Part-time workers aren’t the only employees being affected by the changes, however. Wal-Mart has acknowledged that premiums for full-time employees will be rising in the coming year as well.
The news from Wal-Mart comes on the heels of Obama’s most arrogant rhetoric yet regarding the Affordable Care Act. Speaking at Indiana company Millennium Steel Services this week, Obama was confronted by general manager Miher Paranjape about rising healthcare costs. He asked the president respectfully if they could expect that trend to continue.
After joking that Millennium Steel’s CEO would be the man to ask about that, Obama said, “The question is whether you guys are shopping effectively enough.” He went on to insist that healthcare premiums, though growing, were doing so at the lowest rate we’ve seen in 50 years.
That Obama would throw a voter’s concerns back in his face so casually is remarkable; that he would do so this close to a national election is stunning. Obama has already frustrated Democrats by saying the midterms should be viewed as a referendum on his policies. At a time when they could use all the help they can get to hold on to the Senate, Democrats had hoped to distance themselves from the unpopular president.
It remains to be seen whether Wal-Mart’s reduction in health coverage is the last big failure of Obamacare or just the tip of the iceberg.