The Target retail store chain is dropping heath insurance benefits for its part-time workers in favor of Obamacare, a.k.a. the Affordable Care Act.
Other employers already have reached the same decision as Target. For example, last fall, Home Depot announced that it was ending health insurance coverage for about 20,000 part-time associates (i.e. those who work less than 30 hours a week) and suggested that affected workers seek coverage in the government-sponsored Obamacare exchanges. Trader Joe’s also dropped part-time insurance coverage around the same time, sending employees to the exchanges to find a new plan.
Similarly, any Target part-timer who needs health insurance coverage will have to get it on the Obamacare exchanges as of April 1 when the company discontinues the existing plan.
In support of its decision to cut healthcare benefits for part-timers, the Target website explained that “The launch of Health Insurance Marketplaces provides new options for health care coverage that we believe our part-time team members may prefer. In fact, by offering them insurance, we could actually disqualify many of them from being eligible for newly available subsidies that could reduce their overall health insurance expense.”
Target employees who are transitioning out of company-provided insurance will receive a $500 check and help with finding new coverage.
Said Target executive Jodee Kozlak, “Our decision to discontinue this benefit comes after careful consideration of the impact to our stores’ part-time team members and to Target, the new options available for our part-time team, and the historically low number of team members who elected to enroll in the part-time plan.”
Looking at it in a different light, this decision by Target could also seem to be another example where “if you like your plan, you can keep your plan” doesn’t apply.
Moreover, whether consumers become eligible or not for taxpayer-funded subsides on HealthCare.gov or on a state exchange, many insurance-seekers have already discovered that they will paying higher deductibles and co-pays and will be locked out of their existing provider networks as a result of Obamacare insurance.
Other consumers — such as the self-employed — whose non-Obamacare-compliant insurance has already been canceled and with income that renders them ineligible for subsidies face significantly and sometimes drastically more expensive premiums for exchange-based insurance.
When the postponed employer mandate for full-time workers begins kicking in this fall in the run-up to 2015, millions more Americans on employer-based plans will find their coverage similarly disrupted with significant rate increases and so forth. At that time, more cost-sensitive employers may be tempted to drop health benefits entirely and send their full-time workers into the exchanges.
Disconnecting insurance from employment may be a good thing in the long run, but it becomes problematic when one segment of the population winds up paying much higher premiums as part of a forced income transfer.
In reporting on Target’s decision to end health insurance for part-times, the Washington Post notes that “The health-care law is definitely changing how employers offer coverage, Target included. But whether those changes are good or bad depends on who you are, how much you earn and whether you’re getting benefits right now. Like many other parts of the health-care law, its complicated — and varies a lot from person to person.”
Separate from the Target Obamacare decision, at Christmas time, Target and other retailers were reportedly hacked, exposing the personal information of millions of customers to unauthorized persons.
[image credit: Marlith]