April 19, 2024

Wal-Mart Cuts Some Health Care Benefits

Citing rising costs, Wal-Mart, the nation’s largest private employer, told its employees this week that all future part-time employees who work less than 24 hours a week on average will no longer qualify for any of the company’s health insurance plans.

In addition, any new employees who average 24 hours to 33 hours a week will no longer be able to include a spouse as part of their health care plan, although children can still be covered.

This is a big shift from just a few years ago when Wal-Mart expanded coverage for employees and their families after facing criticism because so many of its 1.4 million workers could not afford or did not qualify for coverage — rendering many of them eligible for Medicaid.

Under pressure from states saddled with rising Medicaid costs and from labor unions and community groups, Wal-Mart had agreed to offer part-time employees, even those averaging less than 24 hours a week, health care insurance after a year on the job, shaving a year off the eligibility requirement. Wal-Mart also said that it was offering health plans that cost its employees about $250 a year for family coverage.

At the time, the moves were considered a departure from some of its major rivals and large employers, more than half of whom offer no company-sponsored health plan for part-time workers.

On Thursday, the company would not say what percentage of its work force was part time or worked fewer than 24 hours a week. Greg Rossiter, a Wal-Mart spokesman, said the decision to deny coverage to new part-time employees resulted from the company’s revamping of its health care offerings in light of rising costs.

“Over the last few years, we’ve all seen our health care rates increase and it’s probably not a surprise that this year will be no different,” Mr. Rossiter said. “We made the difficult decision to raise rates that will affect our associates’ medical costs. The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

The company said the changes were not a result of the new federal health care law. But the higher rates along with steep spikes in premiums for other plans this year are likely to stoke the national debate over the year-old legislation that has pitted President Obama and Democrats against Republicans opposed to the changes. Challenges to the law by several states are now before the Supreme Court.

These moves are also occurring in a postrecession period when Wal-Mart has been struggling to regain its footing after months of disappointing or flat sales. And with unemployment still hovering around 9 percent, employers may feel less compelled to offer expansive benefits to people desperate for work.

Nationwide, employer-sponsored health premiums are up 9 percent, and increases of 5 percent or more are predicted for next year, with workers shouldering higher burdens on premiums and deductibles.

In 2009, Wal-Mart said 52 percent of its employees obtained health coverage through it, but on Thursday it declined to give the percentage.

Documents on Wal-Mart’s health and other benefit offerings were obtained by The New York Times from the Organization United for Respect at Walmart, a union-backed group of Wal-Mart employees that is seeking to pressure the company to improve wages and benefits.

In Wal-Mart’s 2012 health offerings, premiums will increase for some plans by more than 40 percent, although many of their workers pay relatively low premiums in comparison to more generous plans offered by other employers. But many Wal-Mart employees complain that their low premiums are accompanied by high deductibles that sometimes exceed 20 percent of their annual pay.

Wal-Mart’s new health offerings will require many employees who smoke to pay a significant penalty. They will be required to pay an extra $10 to $90 each pay period — $260 to $2,340 a year — if they want health coverage.

Several other large employers have begun charging higher premiums to employees who smoke, according to Mercer, a benefits consulting firm. Among the largest employers, about 28 percent vary their premiums based on tobacco use.

Mr. Rossiter defended the penalty for smokers, saying, “Tobacco users generally consume about 25 percent more health care services than nontobacco users.”

In its health care brochures, Wal-Mart told its employees that diseases caused by tobacco result in $96 billion in extra health care costs nationwide. And it noted that some other prominent companies, including Home Depot, Macy’s and PepsiCo, charge smokers more as part of their health plans.

Article source: http://feeds.nytimes.com/click.phdo?i=f5af6ec757e8623f6cf540da0c51f7a8

Bucks Blog: About That Inheritance

Jean Dorrell, a financial planner who works with a large retirement community, said she often recommended simple annuities for clients who had life savings in the hundreds of thousands, not millions, to restrict how the money was passed to heirs.Gregg Matthews for The New York TimesJean Dorrell, a financial planner who works with a large retirement community, said she often recommended simple annuities for clients who had life savings in the hundreds of thousands, not millions, to restrict how the money was passed to heirs.

Paul Sullivan, in his Wealth Matters column this week, writes about an issue many parents — no matter their wealth — deal with: how to encourage their children to grow into independent adults. The issue gets more complicated when money is involved.

Even if their children have turned out well, parents may still feel that leaving a large inheritance will discourage them from working hard.

But a more difficult decision, he writes, is what to do about an inheritance when a child is troubled or marries someone the parents don’t trust. Those parents, he says, will have to confront the issue at some point. And if they don’t come up with a plan, their money could make a bad situation worse.

How did you work out the issue? Do you have advice to offer others in this position? Please tell us in the comment section below.

Article source: http://feeds.nytimes.com/click.phdo?i=98cf3da455720a5af153413f3b47a262