Wal-Mart to End Health Care Benefits for 30,000 Part-Time Employees

Author: Gloria Ju

October 13, 2014

Effective January 1, 2015, Wal-Mart will stop providing health insurance to part-time employees who work fewer than 30 hours per week. According to a blog post on Wal-Mart's website, the company is not only changing eligibility for part-time employees, but also raising full-time employees' premiums due to rising health care costs.

"This year, the expenses were significant and led us to make some tough decisions as we begin our annual enrollment," Sally Welborn, Senior Vice President of Global Benefits, said in the blog entry.

Approximately 30,000 part-time employees - two percent of Wal-Mart's total US workforce - will be affected. Wal-Mart said it will be working with a third-party organization to help the employees find alternative insurance. In 2011, the company had eliminated health coverage for employees working fewer than 24 hours per week.

Other major retailers, including Trader Joe's, Target and Home Depot, have dropped health coverage for part-time workers in response to the Affordable Care Act (ACA).

The ACA's employer shared responsibility (or pay or play) mandate requires employers to provide full-time employees with health coverage that is affordable and meets minimum value requirements, or else pay a penalty. Full-time employees are defined as those who work 30 or more hours a week. Beginning in 2015, the mandate applies to employers with 100 or more employees. In 2016, the mandate takes full effect and applies to employers with 50 or more employees. Employees losing coverage will be able to buy insurance through the federal or a state health care exchange (or marketplace) established by the ACA, and may be eligible for premium subsidies depending on their location and household income.