Target to Drop Health Insurance for Part-Time Workers

January 23, 2014

Target said it will end health insurance for part-time employees, joining Trader Joe's, Home Depot and other retailers that have scaled back benefits in response to changes from ObamaCare, says Bloomberg.

  • About 10 percent of Target's part-time employees, defined as those working fewer than 30 hours a week, use the company's health plans now.
  • Target said it would pay $500 to part-timers losing coverage and a consulting firm will help workers sign up for new ObamaCare plans.

The U.S. Patient Protection and Affordable Care Act ("ObamaCare") is the largest regulatory overhaul of health care since the 1960s, creating a system of penalties and rewards to encourage people to obtain medical insurance. The law doesn't require most companies to cover part-time workers, and offering them health plans may disqualify those people from subsidies in new government-run insurance exchanges that opened in October. The health law requires all companies employing 50 or more people to offer health insurance to those working 30 or more hours starting in 2015. No part-timers will see their hours cut, Target said.

The Affordable Care Act created new government-run health insurance exchanges to sell coverage beginning this month to uninsured people, often with premiums discounted by federal subsidies. It disqualifies Americans for subsidies at the exchanges if they have an offer of "affordable" coverage from their employers, defined as an insurance premium less than 9.5 percent of their income.

  • Target said on its website that many of its part-time workers may prefer coverage from the health law's exchanges, and that by offering them insurance, "we could actually disqualify many of them from being eligible" for subsidies.
  • Coverage for Target employees who work fewer than 30 hours will end April 1, the company said. Open enrollment for 2014 under the Affordable Care Act closes a day earlier.

Source: Alex Wayne, "Target to Drop Health Insurance for Part-Time Workers," Bloomberg, January 21, 2014.

 

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