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Target part-timers losing health insurance worse off – or better?

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Target Corp. this week announced it would be canceling health insurance coverage for its part-time workers, sending them instead to health insurance exchanges created as part of the Affordable Care Act.

The controversial move by the Minneapolis-based retailer sparked a debate: Was shuttling the part-time Target workers off to obtain insurance under Obamacare bad or good for the employees?

The complex answer depends partly on who is spinning the story, and ultimately, the answer will vary worker to worker, observers say.

The way Target Corp. tells it, the Minneapolis-based retailer is doing part-time employees a favor by dropping their health insurance coverage – because now the workers will be eligible "for newly available subsidies [under Obamacare] that could reduce their overall health insurance expense," Target said in a blog post this week.


It will depend on the employee, Washington Post blogger Sarah Kliff notes: "Some probably will find themselves in a better situation, with access to more affordable health care. Others will likely be furious that their benefits from Target are ending."

Kliff further examines the issue: "Generally speaking," she writes, "those who will get the best deal here are the workers with the lowest salaries because, for the first time, their premium will be directly tethered to the amount of money they earn."

The nation's sweeping new health care law presents complex questions for companies, experts say. Obamacare doesn’t require most companies to cover part-time workers, and if companies offer those workers health plans, the employees may be disqualified from subsidies in new government-run insurance exchanges, Bloomberg News notes.

“Health-care reform is transforming the benefits landscape and affecting how all employers, including Target, administer health benefits coverage,” Target executive VP of human resources Jodee Kozlak said, Bloomberg noted.

Target says its move affected less than 10 percent of the retailer's 361,000 workers.

But to be sure, the action also amounts to a cost-cutting measure by a battered retailer that just laid off another 475 employees.

Workers' rights advocates don't like the way Target is crafting a message that its move was ultimately good for workers, Forbes notes. "Major employers like Target should not be looking to taxpayers to subsidize an employee benefit they can more than afford to pay," activist Carrie Gleason told Forbes.

Target's move was not without precedent. A number of retailers, including Home Depot, have announced they would shift medical coverage for part-time workers to the new public marketplace exchanges, Reuters notes. Also on that list: Trader Joe's, Forever 21 and Walmart.

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