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wal-mart cuts back on workers' coverage Paying more for insurance

  • Associated Press
  • Published Saturday, Oct. 22, 2011, at 12:09 a.m.
  • Updated Saturday, Oct. 22, 2011, at 7:17 a.m.

NEW YORK — Wal-Mart Stores, the nation's largest private employer, is scaling back the eligibility of health care coverage offered to future part-timers and raising premiums for many of its full- time workers.

The discounter, which employs more than 1.4 million workers, said the changes were forced by rising health care costs. All future part-time workers working less than 24 hours a week, on average, will be affected.

Wal-Mart is working hard to reverse nine straight quarters of decreases in revenue at stores open at least a year, and may see a gain by the third quarter, which ends in late October.

Premiums will rise for many existing workers, and the company will reduce by half the amount it contributes for each worker to help pay for health care expenses not covered under their plan. Tobacco users will particularly be hit hard, seeing premiums more than double compared with increases of as much as 41 percent for singles, according to Making Change at Wal-Mart, a union-backed group that has been pressuring Wal-Mart on worker rights.

"Health care costs are continuing to go up faster than anyone would like," said Greg Rossiter, a Wal-Mart spokesman. "It is a difficult decision to raise rates. But we are striking a balance between managing costs and providing quality care and coverage."

Rossiter said the premium increases vary by plan. For the most popular health care plan — basic coverage for a single person — the cost will go from about $11 per pay period, which is every two weeks, to about $15 per pay period starting next year, he said.

But Andrew McDonald, a spokesman for Making Change at Wal-Mart, noted smokers will feel even more pain. Starting next year, smokers will be forced to pay $25.40 for that same plan every pay period.

For associates with families under a basic health care plan, they will have to pay $52.50 per pay period next year, up from $32.70 this year. Families with one smoker will have to pay $62.50.

"Tobacco users consume 25 percent more health care services than non-tobacco users," Rossiter said.

Preventative care, such as annual checkups and mammograms, will remain fully covered under the plans. Wal-Mart is cutting in half the amount it gives families to pay for uncovered expenses to $500. For individuals, Wal-Mart will contribute $250, down from $500.

Current part-timers will remain eligible for coverage for themselves and their children, Rossiter said.

The changes on health coverage represent a reversal from only a few years ago. Wal-Mart, under pressure from union-backed groups, began providing coverage to part-time workers, including those who work less than 24 hours a week, after only one year on the job instead of two. It also lowered premiums and lowered co-pays for prescription drugs. Since 1996 the company had offered overall coverage to all part-time workers.

Wal-Mart, based in Bentonville, Ark., defines full-time workers as anyone who works 34 or more hours per week. Rossiter declined to say how many part-time workers it has, but he noted that a majority of its workers are full-time employees.

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