Wednesday, October 8, 2014

qotd: Will Walmart raise wages of those losing their insurance?

October 7, 2014
Providing Quality Health Benefits for Our Associates
By Sally Welborn, Sr. Vice President, Global Benefits, Walmart

In the U.S., the 1.3 million people who work at our stores, clubs and
distribution centers are vital to a great experience for the 140 million
customers shopping with us each week. We're in business because our
associates bring us their unique skills and talents – and so we do our
absolute best to offer all the benefits that come with a great job,
particularly affordable health insurance.

Like every company, Walmart continues to face rising health care costs.
This year, the expenses were significant and led us to make some tough
decisions as we begin our annual enrollment. As a result, today we
announced that our associates will see an increase in premiums for 2015.

We're also changing eligibility for some part-time associates. We will
continue to provide affordable health care to all eligible associates,
including part-time, who work more than 30 hours. However, similar to
other retailers like Target, Home Depot, Walgreens and Trader Joe's, we
will no longer be providing health benefits to part-time associates who
work less than 30 hours. This will impact about 2% of our total U.S.

We don't make these decisions lightly, and the fact remains that our
plans exceed those of our peers in the retail industry. 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 health care 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.


The New York Times
October 7, 2014
Walmart to End Health Coverage for 30,000 Part-Time Workers
By Hiroko Tabuchi

Walmart Stores, the world's largest retailer and the nation's largest
private employer, said on Tuesday that it would terminate health
insurance coverage for about 30,000 part-time workers, joining a string
of retailers that have rolled back benefits in response to the
Affordable Care Act.

Starting on Jan. 1, Walmart will no longer offer insurance to employees
working less than an average of 30 hours a week, a move the retailer
said was in response to an unexpected rise in health care costs.

The workers losing their coverage make up about 5 percent of the
company's part-time work force of about 600,000, including in-store,
logistics and corporate workers, said Brooke Buchanan, a company
spokeswoman. Walmart did not disclose what percentage of the part-time
work force would be left without coverage. Many part-time employees were
never covered for a variety of reasons.

Walmart said that it would work with a health coverage specialist to
guide workers through the process of finding alternative coverage.


Comment by Don McCanne

Large retailers are infamous for low wages and limited benefits. Walmart
has been a special target of critics, no doubt in part because a few
members of the Walton family are amongst the very wealthiest people in
the world - not just in the top 1 percent, but at the very top of the
0.01 percent. Providing more generous health benefits for all of their
employees would cost only a small fraction of the annual net gain in
wealth of the Walton family.

It is not as if Walmart's health plans are comparable to those
traditionally offered by most other large employers. According to their
release, they cover only 60 percent of their employees' health care
costs - a level equivalent to the bronze plans in the very bottom tier
of the insurance exchanges created by the implementation of the
Affordable Care Act (ACA).

As ACA was being crafted it was decided that employers would not have to
provide health care coverage for employees working under 30 hours per
week. To no surprise, many employers adjusted the hours of their
part-time employees to avoid having to include them in their health
plans. Walmart previously had less than 24 hours a week as the cut-off
for providing health coverage, but they changed that to under 30 hours
since ACA allowed them to get more hours out of their employees without
having to provide health benefits.

Walmart intends to provide guidance to the 30,000 employees who will
lose their insurance. Those with poverty level incomes will no doubt be
directed to Medicaid in those states in which they are eligible. Those
just above poverty wages will likely be sent to the exchanges where they
may be eligible for generous taxpayer supported subsidies. Why should
the Walton billionaires provide coverage for these workers when the
taxpayers will do it for them?

This should provide a good test of the principle that almost all
economists preach: that employer-sponsored health plans are paid for by
the employee in the form of forgone wage increases. Now that 30,000
employees working 30 hours or less will lose their insurance, surely
Walmart will provide them with wage increases equivalent to perhaps
three-fourths of the the employer contribution to the health plan
premiums (since they work three-fourths of the full time hours). Walmart
takes every opportunity to publicize how well they are taking care of
their employees, yet they remain silent on wage increases for those
losing their insurance. Economists need to take another look at the
slight of hand revealing the deception of the forgone wage increases.
Wage increases are forgone when health care costs increase for the
employer, but just try to get the employers to restore alleged forgone
wages when the health benefits are terminated.

When we change to a single payer national health program - and we will -
employers will be relieved of their responsibility under ACA to provide
health insurance for their employees. At that time efforts can be
concentrated on ensuring that employees then receive living wages. That
could be another great spin-off benefit of an improved Medicare for all.

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