Target Corp. (TGT) will end health insurance for part-time employees in April, joining Trader Joe’s Co., Home Depot Inc. and other U.S. retailers that have scaled back benefits in response to changes from Obamacare.
About 10 percent of part-time employees, defined as those working fewer than 30 hours a week, use Target’s health plans now, according to a posting yesterday on the Minneapolis-based company’s website. Target is the second-largest U.S. discount retailer by sales and had about 361,000 total employees last fiscal year, according to data compiled by Bloomberg.
The U.S. Patient Protection and Affordable Care Act 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 known as Obamacare 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.
“You see a lot of retailers making adjustments in contemplation of the full effect of the employer mandate penalties in 2015,” Neil Trautwein, a lobbyist with the National Retail Federation, a trade group in Washington, said in a phone interview. “Even though it is not effective yet, it is already having an effect on the job market and putting companies where they would probably not otherwise want to be.”
The move should also reduce the cost of Target’s health benefits, Trautwein said.
Read full article at: Bloomberg: Target to Drop Health Insurance for Part-Time Workers