Target joins Home Depot, Walmart, others in cutting health care for part-timers, citing Obamacare

January 2014 FINANCETarget has become the latest high-profile retailer to cut health benefits for part-time workers, citing both low employee participation and “health care reform” in a letter posted on its website. The Minnesota-based discount chain joins Home Depot HD -1.35%, Trader Joe’s, Forever 21  and other large retailers in ending health insurance coverage for part-time staff as the Affordable Care Act, commonly dubbed Obamacare, comes into effect.Other companies like Walmart started cutting health care benefits for part-timers long before Obamacare’s January 1st start date; the Bentonville, Ark. low-price giant stopped health coverage for those working fewer than 24 hours a week in 2011. Target’s head of HR Jodee Kozlak explained on Tuesday that fewer than 10 per cent of the chain’s workers are currently enrolled in the company’s part-time health plan, which is available for employees putting in under 30 hours weekly. “The launch of Health Insurance Marketplaces provides new options for health care coverage that we believe our part-time team members may prefer,” Kozlak wrote, adding that each part-timer will be eligible for a $500 cash payment from Target. “In fact, by offering them insurance, we could actually disqualify many of them from being eligible for newly available subsidies that could reduce their overall health insurance expense.” Workers’ rights advocates are taking issue with Target’s framing of its healthcare changes as an altruistic act.
“Major employers like Target should not be looking to taxpayers to subsidize an employee benefit they can more than afford to pay,” said Carrie Gleason, executive director of the Retail Action Project, an activist group that has protested labor practices at Walmart among other companies. “Moreover, Target’s plan is part of an ongoing trend in the retail industry of capping workers’ hours to avoid the employer mandate for insurance,” she said. “The real issue at play here is that employers consistently don’t offer part-time employees health insurance.” Target’s Kozlak assured employees there is no plan to cap workers’ hours, writing: “At any time, our team members can talk to their manager about their interest and availability to work more hours. In fact, during the holiday season we offered our year-round part time and full time team members the opportunity to take on additional hours or cross-train to work in other areas — at their request.” –Forbes
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