Walmart cuts health benefits for part-time associates; increases premium costs
New York -- Wal-Mart Stores Inc. on Tuesday said it will no longer provide health benefits to part-time associates who work less than 30 hours a week in a move to control its rising healthcare costs. The chain, the nation’s largest private employer, said the decision will impact about 2% of its total U.S. work force.
The announcement follows similar decisions by Target, Home Depot, Walgreens and Trader Joe’s to cut health insurance benefits for part-time associates.
Wal-Mart will continue to provide affordable health care to all eligible associates who work more than 30 hours, Sally Welborn, senior VP, global benefits, Walmart, wrote in a blog post on the company’s Web site, but its associates will see an increase in premiums for 2015. The chain’s most popular and lowest cost associate-only plan will rise by $3.50 to $21.90 per pay period, which is still half the average premium other retail employees pay, according to the company.
“We don’t make these decisions lightly, and the fact remains that our plans exceed those of our peers in the retail industry,” said Welborn. “Our premiums remain well below the industry average compiled by expert Aon Hewitt. We also continue to pay the majority of health care costs for associates covered under our medical plans. For example, on average we cover more than 60% of our associates’ total healthcare costs and more than 75% of their premium costs. In contrast, the retail industry pays, on average, about 54% of total health care costs and 68% of employee premiums.”
Wal-Mart said it will be working with consultant, HealthCompare to “personally guide our associates through the process of finding the right, affordable health care.”
In August, Wal-Mart cut its full-year profit forecast, citing higher employee benefit costs, among other things.
The announcement comes a day after the retailer said it is teaming up with online health insurance agency DirectHealth.com to help customers shop for health insurance plans.