Walmart, the world’s largest retailer, announced Tuesday that it would no longer offer health insurance benefits to its 26,000 part-time workers.
Nobody likes losing any kind of benefit at work. But for the particular Walmart workers in this case, the end of employer-sponsored insurance could actually turn out to be a great thing.
Employer coverage is too expensive for many part-timers
For the employer, dropping coverage is a pretty decent deal: A company would see its health care costs reduced by over 40 percent. They don’t drop to zero, however, since the employer would still be on the hook for the fines that come along with not offering coverage.
But for the employee, it’s a pretty lousy deal. Lockton ran the numbers, using data on how much employers pay for health insurance now and how much health insurance on the exchanges is projected to cost.They found that employers foot a significantly larger chunk of the insurance bill than the federal government would, even with the new subsidies they’d receive. The firm predicts their premiums would increase anywhere from 79 to 125 percent if they lose employer coverage and have to go to the exchange. There’s such a big variation because exchange subsidies vary by income: Those who earn less are eligible for a larger subsidy.
That doesn’t mean companies won’t necessarily do it; there certainly is a lot for them to save. It does, however, add another wrinkle to the discussion, where employers would need to explain why their workers’ premiums would see massive increases.
And of course we all lose…
If Walmart doesn’t offer her insurance, the Kaiser Family Foundation’s subsidy calculator shows that she qualifies for a $1,751 subsidy from the federal government to help buy coverage on the exchange. With that financial help, she can buy insurance for as little as an $7 per month. As a low-wage worker, she gets some of the most generous financial help.
That financial help come from us…
The loser in the Walmart decision is the federal budget
Yes, there will definitely be some people who earn more at Walmart and get less generous subsides on the exchange. They could see their premiums increase with this decision. But given that this decision applies only to those who work fewer than 30 hours per week, they are likely lower earners who will be helped rather than hurt.