Walmart’s Choice

Walmart's decision to drop health insurance coverage for part-time workers could be good news for many--but not all.

Walmart’s Decision To Drop Insurance For Part-Time Workers Could In Fact Help Many (But Not All)

“In the long term, this isn’t really news.”

That’s what Washington & Lee law professor Tim Jost told ThinkProgress, upon hearing that Walmart is dropping insurance coverage for about 30,000 part-time employees. The nation’s largest private employer now joins some other big companies like Trader Joe’s, Home Depot, and Target who have made similar decisions recently. While some in the conservative media have tried to use the Affordable Care Act as a scapegoat, the decision is more likely business as usual — and in fact could be good news for many part-time Walmart employees.

Why business as usual? For one, before this decision Walmart was in the minority offering health insurance to part-time employees: Last year, 62 percent of large retail chains offered no health care benefits to their part-time workers at all. In addition, while Walmart acknowledges that an unexpected rise in healthcare costs prompted the move, company executives say that was in large part due to something called the “woodwork effect” — the national attention given to health care in the past year caused more of their employees to sign up for Walmart’s employer-provided insurance plans. That in turn increased the company’s health care costs more than expected.

Why could this be good news for Walmart employees? Unlike when part-time employees lost their health coverage before the ACA, these workers now have an alternative for affordable coverage: the insurance exchanges. Workers with affordable health coverage provided by employers are ineligible for financial assistance through the ACA. With that option now gone, these Walmart employees qualify for subsidies. Vox’s healthcare guru Sarah Kliff crunches the numbers on whether this is a better deal for Walmart’s part-time employees and finds that, typically, it is: a 36-year-old Walmart employee in Washington, D.C. who works 29 hours each week at Walmart’s average wage of $12.73 per hour would save $104 per month in health care premiums by signing up on the exchange.

At ThinkProgress, Tara Culp-Ressler reports that the retail giant is taking proactive steps in other ways to help their employees get covered:

Earlier this week, the company announced that 2,700 of its locations will be staffed with insurance agents to help customers enroll in new insurance plans, either through Medicare or through Obamacare’s private insurance marketplaces. Part-time workers who now need to enroll in Obamacare polices may have an even more personalized option: Walmart told the New York Times that a health coverage specialist will help guide them “through the process of finding alternative coverage.”

With that said, however, not all employees are going to be better off with Walmart’s decision. Employees who fall into the coverage gap — earning below the poverty line in the conservative states that have refused to expand Medicaid — will be out of luck. Walmart now has an obligation to help them by working to make sure those states’ lawmakers change their minds and make the moral and economic choice to expand health care to low-income workers.

BOTTOM LINE: For the most part, the news that Walmart is dropping health coverage for 30,000 part-time workers is nothing to worry about. It could actually save employees who now qualify for ACA insurance subsidies hundreds of dollars a year. But the newly uninsured Walmart employees who fall into the Medicaid coverage gap are not so lucky: Walmart no longer covers them, and now it needs to help them.

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