Target Corp. has announced that it will discontinue its health insurance coverage for part-time workers. The change will affect Target employees working less than 30 hours a week, starting April 1.
The Minneapolis-St. Paul Business Journal reports Target will redirect part-time employees to seek coverage through health insurance exchanges. It will give $500 in cash to employees that lose coverage due to the change.
The company notes that less than 10 percent of all Target employees participate in the part-time insurance plan.
In a company blog, Target’s vice president of human resources, Jodee Kolzak, said, “Health care reform is transforming the benefits landscape and affecting how all employers, including Target, administer health benefit coverage.”
Kolzak also noted that the decision to discontinue the benefit comes after careful consideration of the impact to stores’ part-time team members and to Target.
“We recognize this change may be better for some and may also cause disruption for those who previously elected to enroll in this benefit,” wrote Kolzak.
David Martin, principal at Ahmann Martin Risk and Benefit Consulting in Edina, told the Pioneer Press that Target’s decision isn’t surprising. According to the report, Martin suspects “we’re probably going to see that more and more” among corporate employers.
The Affordable Care Act requires large employers to provide health insurance for full-time employees starting next year. Martin told the Pioneer Press, “It makes quite a bit of sense to apply your resources where you need to – and for other populations, have them be available for the subsidies and other benefits from the Affordable Care Act.”
Target joins Home Depot Inc. and Trader Joe’s Co. and other retailers that have scaled back benefits in response to the changes, according to Bloomberg.
The law disqualifies Americans for subsidies at the exchanges if they have an offer of “affordable” coverage from their employers. That is defined as an insurance premium less than 9.5 percent of their income.
Target said many of its part-time workers may prefer coverage from the health law’s exchanges, and by offering them insurance, “we could actually disqualify many of them from being eligible” for subsidies.
Enrollment in the health insurance exchanges established by the Affordable Care Act picked up last month. The New York Times reports that nearly 2.2 million people have picked a health plan through one of the health insurance exchanges created by the law.
That number represents 65 percent of the administration’s sign-up goal, but more people signed up in December than in the first two months combined, according to the New York Times.
Like the federal government’s website, Minnesota’s state exchange, MNsure, continues to have glitches. The organization said it would accept paper applications for those who are still having problems signing up through the website.