Target Joins Other Companies in Dropping Health Coverage

Posted: Jan 22, 2014 10:42 AM
Yesterday afternoon, Target announced that it would be cutting health benefits for part-time workers, defined as those who work fewer than 30 hours per week.

Bloomberg reported:

About 10 percent of Target’s part-time employees, defined as those working fewer than 30 hours a week, use the company’s health plans now, according to an announcement posted on the Minneapolis-based company’s website. Target said it would pay $500 to part-timers losing coverage and a consulting firm will help workers sign up for new Obamacare plans.

Coverage for Target employees who work fewer than 30 hours will end April 1, the company said. Open enrollment for 2014 under the Affordable Care Act closes a day earlier.

Trader Joe's, Home Depot and other large national retailers have dropped health coverage for part time workers recently in response to the regulatory mandates imposed by Obamacare.

In 2011, Target's biggest rival Walmart did something similar, dropping and rolling back health coverage for a large number of its workers who worked fewer than 24 hours per week. What's interesting about that is only a few years earlier, Walmart expanded coverage to a lot of these employees.

Walmart was a large part of the lobbying effort to pass Obamacare. Jeffrey Young wrote for The Atlantic how Walmart might have been using Obamacare as a vehicle to hurt its rivals:

Wal-Mart is a massive, massive company, making it better able to shoulder the burden of additional healthcare costs compared to other companies, as Peter Suderman at Reason notes. Wal-Mart's revenues were $405.6 billion last year. Target, the Fortune-ranked 28th largest company in America, took in $65 billion.

Not for nothing, but Wal-Mart is also one of the biggest drug stores in the United States. If universal health coverage means more prescriptions get filled, all the better for Wal-Mart. Bonus: Sam's Club sells health insurance policies!

Walmart expanded their health insurance coverage for employees, lobbied the federal government to pass Obamacare, then cut back on coverage to the minimum level mandated. They might still stand to benefit from the law - and now their rivals are in the headlines for dropping coverage.

Recommended Townhall Video