Skip to main content

Advanced Search

Advanced Search

Current Filters

Filter your query

Publication Types



Newsletter Article


Wal-Mart Drops Health Coverage for Some Part-Time Workers

By Rebecca Adams, CQ Roll Call

October 7, 2014 -- Wal-Mart Stores Inc., the nation's biggest private employer, will stop offering health benefits in January to employees who work fewer than 30 hours per week. Wal-Mart's move is significant because of its size and potential influence on other businesses, as well as its history of workforce complaints about benefits and labor practices.

The health care law (PL 111-148, PL 111-152) requires employers to offer affordable coverage to people who work at least 30 hours weekly. But Wal-Mart officials said that new federally subsidized health insurance marketplace plans created by the law are a viable alternative to company-sponsored coverage.

"Today the health care landscape is changed," Wal-Mart spokesman Randy Hargrove said in a recent interview. "There's a wider selection of plans."

The benefits cutoff affects about 30,000 employees, or 5 percent of the retailer's part-time workers.

The corporation will hire for one year a company to help its workers choose a government-subsidized or private insurance plan, or enroll in Medicaid, the federal-state program for low-income people, Hargrove said. Wal-Mart will not give workers any stipends to help with the costs.

"We don't make these decisions lightly," Sally Welborn, Wal-Mart's senior vice president of global benefits, said in a blog post explaining the decision. She also said the company will ask workers to pay more of their medical costs. Premiums for the lowest-cost option, a basic plan for a single person only, will rise by $3.50 every two weeks to $21.90 per biweekly pay period, starting Jan. 1.

Wal-Mart officials said rising health costs prompted the decision. Hargrove said health costs were $500 million higher in the fiscal year that started in February than in the previous year.

Other retailers—such as Target, Trader Joe's and Home Depot—also have announced plans to drop coverage for part-time employees who do not work at least 30 hours.

Some employees may qualify for Medicaid, depending on how many hours a person works and the eligibility rules of the state in which the worker lives. The average wage for all hourly employees is $11.83 per hour, Wal-Mart spokesman Kory Lundberg said in an interview.

Cashiers at Wal-Mart are among the lowest-paid among retail chains, according to a National Bureau of Economic Research paper published this summer, although managers' pay compares favorably with the company's competitors. The research showed that Wal-Mart cashiers earned $8.48 an hour on average.

Lundberg disputed the amount, saying it was based on incomplete data, but declined to release the average pay for cashiers.

Wal-Mart has come under fire in recent years from consumer groups and Democratic critics who have said that the company's relatively low pay is a drain on federal taxpayers because of the number of employees who qualify for food stamps and Medicaid.

Company officials noted that they will pay about 75 percent of workers' premiums while workers will pay 25 percent. Nationwide, American workers in all industries contribute on average 18 percent of the premium for single coverage and 29 percent of the premium for family coverage, according to a large survey by the nonpartisan Kaiser Family Foundation released last month. Wal-Mart officials did not immediately provide a breakdown of any difference in the amount that the company contributes based on whether it is individual or family coverage.

In her blog post, Welborn also touted benefits that the company is required by the health care law to cover, such as full coverage of preventive benefits and no lifetime cap on payments for health care costs.

"We had to make some tough decisions," said Hargrove.

Publication Details