Target dropping health coverage for part-timers

by Jason Millman - Politico


Target acknowledged the move will be jarring for some employees.

Target is the latest retail giant to drop health coverage for part-time employees, citing changes under by the health care law and low participation in its company health plans.

The company Tuesday night announced a plan to transition employees working fewer than 30 hours a week onto Obamacare health insurance exchanges, where they can get subsidized coverage.

Target said Tuesday night that just fewer than 10 percent of its employees bought into its health plan for part-time workers, and it said that many employees could get financial help in the exchanges, also known as marketplaces.

“Health care reform is transforming the benefits landscape and affecting how all employers, including Target, administer health benefits coverage,” Jodee Kozlak, Target vice president of human resources, wrote in a blog post. “Our decision to discontinue this benefit comes after careful consideration of the impact to our stores’ part-time team members and to Target, the new options available for our part-time team and the historically low number of team members who elected to enroll in the part-time plan.”

Starting next year, the Affordable Care Act requires businesses of 50 or more employees to offer coverage meeting minimum standards to employees working 30 or more hours a week — but there’s no coverage mandate for those working fewer than 30 hours. The company’s decision to ditch health coverage for part-time employees follows similar moves by other major retailers last year, including Trader Joe’s and Home Depot.

HHS spokeswoman Joanne Peters said this morning that “employers have been dropping coverage for more than a decade, long preceding the Affordable Care Act.” In a statement, she noted that increases in premiums and health care costs have slowed in recent years and that with the health law, employees now “have the option of shopping in the [ACA] Marketplace for quality, affordable coverage, where they may be able to qualify for a tax credit to help pay for the cost.”

Target acknowledged its move will be jarring for some employees.

“We recognize this change may be better for some and also may cause disruption for those who previously elected to enroll in this benefit,” Kozlak wrote.

Target employees losing company coverage on April 1 will receive a one-time $500 payout, and the company is providing benefits counseling to those workers.

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