Wal-Mart Dials Back Health Care Benefits for Scores of Workers

Claiming that it is too expensive, Wal-Mart has announced it is rescinding health coverage for part-time workers and drastically raising premiums for much of its full time staff, reports Business Insider.

The country's largest private employer (2.1 million employees) told every employee who works less than 24 hours a week that they will no longer qualify for insurance. Additionally, anyone working up to 33 hours a week may no longer include a spouse on their plan, reports The New York Times.

“Over the last few years, we’ve all seen our health care rates increase and it’s probably not a surprise that this year will be no different,” Mr. Rossiter, a Wal-Mart spokesman, said in the Times report.

“We made the difficult decision to raise rates that will affect our associates’ medical costs. The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage,” he added.

Rates are expected to climb by more than 40 percent for some employees, according to Business Insider. Employees are complaining that their health care will now eat up to 20 percent of their annual pay due to the high deductible fees.

Obviously, Wal-Mart employees are unhappy with the move.

Tammy Yancey, a $9.50-an-hour gas attendant at a Sam’s Club in Pinellas Park , Fla., complained to the Times that she won’t be able to afford health insurance from the company.

Another employee, Ms. Yancey, a smoker, said her premiums would jump to $127.90 every two weeks — or $3,325 a year — up from $53.80 at present, when she earns $12,000 a year from her job, according to the report.

“I won’t be able to afford the insurance,” she Yancey. “And I really can’t go without insurance because I have a heart problem.”

Barbara Collins, a sales associate at the Wal-Mart in Placerville, Calif., told the New York Times that the premiums for the H.M.O. plan for herself and her 5-year-old son would rise to $18 every two weeks from $10.

Her big concern, she said, was that her deductible would jump to $5,000 a year, from $1,000. This may become an unsupportable situation considering she earns $19,000 a year. “I don’t know how I’ll be able to afford it if I go to a doctor or to physical therapy,” she said.

Wal-Mart refused Thursday to disclose the number of workers employed less than 24 hours a week, saying only the decision was reached due to rising health care costs.

Dan Schlademan, director of Making Change at Walmart, a union-supported organization, has obviously come out against the proposed changes.

“No wonder people are protesting in the streets,” he said in the Times article.

“This is another example of corporations putting profits ahead of what’s good for everyday Americans. It’s outrageous and damaging to many hard-working families that the biggest corporation in America is increasing health care costs for many employees by 40 percent,” he added.

What has been causing such an increase in health care rates that Wal-Mart had to take these actions?

(H/T Business Insider)