A big concern in today’s economy is health care. It’s always been expensive, whether it’s a routine physical, a special test or procedure, or even prescription drug coverage. Many people know what it’s like to go without it. Now, the nation’s largest private employer is scaling back on its employees’ eligibility for the company’s health plan.
Wal-Mart Stores Inc., will be limiting the eligibility of future part-time workers as well as raising premiums for many full-time employees. Experts say the move could affect more than just Wal-Mart employees, as it may be a sign of things to come from other employers who have previously been mulling such a decision.
Wal-Mart employs over 1.4 million workers in retail locations and distribution facilities across the country. With that many workers, the company said it was forced to make the changes. Starting next year, all future part-time employees that work less than an average of 24 hours per week cannot seek coverage from the plan. Existing employees with health coverage will suffer a major blow. Wal-Mart has decided to raise their premiums, as well as reduce by half the amount it contributes for each worker to help pay for non-covered health expenses. Some of those hit hardest will be tobacco users, who are likely to see a doubling of premiums.
Companies seeking to cut their health care costs have turned to shouldering more of the expenses on their employees. The cost of employer-sponsored health insurance soared 9% this year. Only about 42% of overall companies offer health care coverage to part-time employees. About 28% of retailers don’t offer health care coverage for part-time workers. Retailers are the ones most under pressure to cut costs as they seek to offset a slow rebound in consumer spending. One answer has been to reduce staffing during “lulls” while increasing the number of employees on duty during peak times.
The amount for uncovered expenses is being halved to just $500 for families and $250 for individuals. Preventative care, such as annual checkups and mammograms, will remain fully covered under all plans.