Wal-mart (WMT) Reverses Stance on Health Plan as Premiums, Rates Rise
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The effects of rising commodities and lagging demand are taking a toll on retail super-giant Wal-mart (NYSE: WMT).
And employees are expected to take a major cut as the result.
According to reports Friday, Wal-mart is aiming to cut health insurance coverage for employees who work 24 hours per week or less, and eliminate spouse -- but not children -- coverage for employees who work between 24 and 33 hours.
The NYTimes points out, as a reminder, the move is a reversal of what Wal-mart did a few years back when it expanded coverage following criticism many of its then-1.4 million workers did not qualify or could not afford health coverage. Wal-mart then offered coverage for those on the job at least one year.
This recent announcement doesn't have any metrics associated with it, like how much the company will save or what percentage of its employees will be cut from coverage.
Wal-mart contends the changes were not the result of the new federal health care law, but related more to higher rates and spikes in premiums for health care that occurred over the last year. The company noted, in 2012, premiums for some plans will increase by 40 percent. Though still low when compared with other employer plans, employees have gripes that higher deductibles associated with the plans might amount to as much as 20 percent of annual pay.
Though we try to summarize many longer stories written, the following passage from the NYTimes deserves to be reprinted in full:
"Tammy Yancey, a $9.50-an-hour gas attendant at a Sam’s Club in Pinellas Park , Fla., complained that she would no longer be able to afford health insurance from the company. Ms. Yancey, a smoker, said her premiums would jump to $127.90 every two weeks — or $3,325 a year — up from $53.80 at present, when she earns $12,000 a year from her job.
"I won’t be able to afford the insurance," she said. "And I really can’t go without insurance because I have a heart problem."" (Emphasis ours.)
Hmm...
Wal-mart shares are trading 1.4 percent better Friday.
And employees are expected to take a major cut as the result.
According to reports Friday, Wal-mart is aiming to cut health insurance coverage for employees who work 24 hours per week or less, and eliminate spouse -- but not children -- coverage for employees who work between 24 and 33 hours.
The NYTimes points out, as a reminder, the move is a reversal of what Wal-mart did a few years back when it expanded coverage following criticism many of its then-1.4 million workers did not qualify or could not afford health coverage. Wal-mart then offered coverage for those on the job at least one year.
This recent announcement doesn't have any metrics associated with it, like how much the company will save or what percentage of its employees will be cut from coverage.
Wal-mart contends the changes were not the result of the new federal health care law, but related more to higher rates and spikes in premiums for health care that occurred over the last year. The company noted, in 2012, premiums for some plans will increase by 40 percent. Though still low when compared with other employer plans, employees have gripes that higher deductibles associated with the plans might amount to as much as 20 percent of annual pay.
Though we try to summarize many longer stories written, the following passage from the NYTimes deserves to be reprinted in full:
"Tammy Yancey, a $9.50-an-hour gas attendant at a Sam’s Club in Pinellas Park , Fla., complained that she would no longer be able to afford health insurance from the company. Ms. Yancey, a smoker, said her premiums would jump to $127.90 every two weeks — or $3,325 a year — up from $53.80 at present, when she earns $12,000 a year from her job.
"I won’t be able to afford the insurance," she said. "And I really can’t go without insurance because I have a heart problem."" (Emphasis ours.)
Hmm...
Wal-mart shares are trading 1.4 percent better Friday.
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