4 Reasons We Shouldn’t Be Too Quick to Celebrate Walmart’s 30,000-Employee Health Insurance Cut
On Tuesday, Walmart announced it would be cutting health insurance from its 30,000 part-time employees—specifically those who work less than 30 hours a week on average. Some media have taken the news surprisingly well, noting that these employees can now get Obamacare, which provides better, more affordable coverage anyway.
In addition, most media outlets are touting an “everyone’s doing it” theme, mentioning Walmart is one of the last large employers to slash health benefits for part-time workers. ("Target and Trader Joes already did it!") But before we take it so easy on the largest private employer in the world, here are some things to consider.
1. Part-time workers in conservative states may not qualify for healthcare. GOP governors in more than 20 states have said they won't expand Medicaid for those making less than about 138 percent of the federal poverty level in their states—even though the federal government would largely subsidize it. This means that if someone working part-time at Walmart makes less than this (which is totally possible considering Walmart’s low wages and unreliable hours) they may end up worse off.
It’s impossible to know just how many employees this could affect because Walmart doesn’t publish part-time employment by state. But as ThinkProgress stated, the corporation “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 healthcare to low-income workers.”
2. Workers were given no voice or warning in the matter. The Washington Post published a piece by a part-time, pregnant Walmart worker who writes about how hard it is suddenly to lose your health insurance. She states: “It’s just really bad and depressing that you have to hear from outside that they’re cutting your insurance. They told us months in advance about the uniform change, and something important about this, they don’t give you warning, couldn’t put something on the board about it.”
This is indicative of the lack of respect Walmart has for its workers on a daily basis. Walmart claims it will be guiding its workers through the process of finding healthcare. For some workers, however, this help may come too late.
3. Walmart could do better—just look at Costco. Instead of having low standards for Walmart because other companies are getting rid of health insurance for part-time employees, perhaps we should be looking for better role models. Huffington Post interviewed the CFO at Costco who said the wholesale club won’t be cutting its health benefits anytime soon. The company provides benefits for employees who work an average of 23 hours or more each week, and the benefits are competitive. A closer look at Costco’s plans reveal that they may be even more affordable and comprehensive than certain Obamacare plans. “That's an expensive cost to us, and we're proud of the ability to be able to do that," the CFO told HuffPo.
Walmart has justified its move by stating that it thought earlier in the year it would only have a $330 million increase in healthcare costs, but now it’s likely to reach $500 million. Meanwhile, Walmart made $17 billion in profit last year.
4. Walmart needs to improve the health insurance it offers. Erik Sherman pointed out on Forbes that many people are missing a bigger part to this story: that the health insurance Walmart does offer its full-time employees is inadequate. He explains that in January the cost of Walmart’s most popular and cheapest health plan will increase to $21.90 per pay period—up from $18.40. But this plan is far from comprehensive, with 20 percent copays and a $5,000 out-of-pocket maximum. And Sherman explains that if a Walmart employee did become really ill, she could be left with a $7,500 medical bill.
“That may be affordable for employees who make higher salaries, but it isn’t for the bulk of Walmart workers,” he writes.
In summary, Walmart shouldn’t be let off the hook too easily. As the largest retailer in the world, Walmart in many ways sets the standard for workers’ rights. While it has a plethora of problems in terms of wages and respect, Walmart has also been gradually cutting back its health benefits. Before 2011, all employees were eligible for health benefits. That year, however, Walmart eliminated health benefits for employees who worked less than an average of 24 hours per week. Now, it’s less than 30. Walmart still has a long ways to go in caring for its workers.