Known as the biggest and largest private-sector employer in the United States, Wal-Mart Stores Incorporated said that it plans to eliminate healthcare benefits for some of its part-time US employees in a goal intended at regulating health insurance costs.
The change that Wal-Mart will impose at the start of 2015 will affect 2 percent of its 1.3 million US work unit, or about 26,000 of the company's employees. The world's largest retailer said that it will stop offering healthcare benefits for workforces who work less than 30 hours per week.
As stated in an article posted by Huffington Post, Wal-Mart's announcement that will take effect on Jan. 1, 2015 follows comparable decisions by Target, Home Depot and other companies to totally eliminate healthcare benefits for part-time employees. The company's Senior Vice President of Benefits Sally Welborn said that she didn't know how much Wal-Mart will save by reducing part-time workers but added that they will use a third-party union to help their employees find insurance options.
"We had to make some tough decisions... We are trying to balance the needs of (workers) as well as the costs of (workers) as well as the cost to Wal-Mart," Welborn told The Associated Press.
The discontinuation of the healthcare benefits will take its effect on the first day of 2015. On that day, Reuters reported that the Affordable Care Act, commonly known as Obamacare, will oblige all companies employing 50 or more people to offer health insurance to those working at least 30 hours per week.
In August, Wal-Mart highlighted increasing healthcare benefits costs as a concern when it cut its yearly profit projection. It said more people than expected had enrolled in its plans and its annual forecast for health insurance costs grew by 50 percent.
Sally Welborn also stated that similar to every company, Wal-Mart continues to face rising healthcare expenses and this year, the expenditures were important and led them to make some hard decisions as they started their annual enrollment.
Wal-Mart's decision came a week before Chief Executive Officer Doug McMillion and other top executives are due to address fund managers and analysts at an annual meeting for the investment community. The company has been trying to increase revenues, with same-store sales flat or falling for the past six months.
National Business Group on Health President and CEO Brian J. Marcotte said that many companies decided before Obamacare's enactment not to offer healthcare benefits to part-time workers. National Business Group on Health represents large employers on health concerns.
On Tuesday, Wal-Mart said that it will increase premiums for all of its US employees in 2015. The company added that it was changing some entitlement terms for part-timers working over 30 hours per week, but did not provide further information. Wal-Mart said that it will continue to offer alternatives that include no lifetime maximum, preventative care covered 100 percent, and up to $1,000 to help pay for medical costs.
As Wal-Mart faces the upcoming effects of the elimination of their healthcare benefits for part-timers, the company's stocks on the New York Stock Exchange were unchanged at $77.35 in afternoon tradeoff.
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