Continuing a trend in the retail economy, Target is ending health insurance options for part-time employees and sending them to health insurance exchanges, following the likes of Home Depot and Walgreens.
Jodee Kozlak, Target's executive vice president of human resources, announced the decision in a blog post, explaining that part-timers will be given $500 to help pay for premiums through the exchange and that many will also qualify for premium tax credits.
Only about 10 percent of Target's workforce participate in the part-timer's health plan, and Kozlak wrote, "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."
The coverage for part-timers offered at the company's 1,797 U.S. stores will be discontinued in April, and employees will receive a guide to the transition, Kozlak said.
"We recognize this change may be better for some and also may cause disruption for those who previously elected to enroll in this benefit," she said.
Target is contracting with a benefits company, who Kozlak did not name, to "develop a personalized approach to provide one-on-one support to every affected team member," such as counselling on their new insurance options, the basics of health plans and the enrollment process.
Part-time Target workers averaging at least 20 hours a week will still be eligible for vacation, dental, disability, life insurance and 401(k) benefits, said Kozlak, while also stressing that the company is not making a concerted effort to limiting employees' hours to avoid having to offer coverage to those working full-time under the Affordable Care Act's new 30-hour-per-week full-time definition.
Kozlak did not bring up what may end up being a problem for part-time workers depending on where they live: the "too rich for Medicaid, too poor for exchange subsidies" coverage gap in the states that are not expanding Medicaid eligibility.
Part-time workers in those 25 states may end up or continue to be uninsured, if they're earning above the pre-ACA Medicaid federal poverty level threshold but below the levels that would qualify them for exchange subsidies.
It's a problem part-time workers at other companies may face. Home Depot and Trader Joe's are both sending their part-time workers to exchanges; like Target, Trader Joe's is giving part-timers $500 to help buy new plans.
The pharmacy and convenience store chain Walgreens, meanwhile, is joining Sears, Darden Restaurants and corporations in other industries, sending employees to private insurance exchanges. Walgreens announced last fall that employees at its more than 8,000 U.S. stores will be given a contribution comparable to their current plans to buy insurance through Aon Hewitt's insurance exchange.