3 takeaways from Target dropping part-time coverage


Target's decision to drop health coverage for its part-time workers because of the reform law reflects a clear national trend: Many large companies are considering whether and how to adjust their health insurance policies in the post-reform market.

Companies like Walgreen's and Home Depot are moving employees out of company-sponsored health insurance and into the exchanges, as FierceHealthPayer reported. And IBM and Time Warner are encouraging retired employees to purchase coverage on private exchanges.

But how many more employers will take similar steps? Target's decision offers several lessons that could predict whether other companies will follow suit, according to Politico.

1. Part-time workers don't usually have health insurance anyway

Part-time workers rarely receive the same health insurance benefits as full-time employees. Only one in four companies that offer health coverage provided plans for part-time workers. And for the part-time employee population that would be affected by Target's decision--those who work fewer than 30 hours each week--only 2.6 million (or 3.5 percent of all employees with health coverage) could enroll in an employer-sponsored health plan, Politico noted.

2. Decisions are based on company-specific circumstances

Companies are expected to make reform-related decisions that vary across the board--all based on their own specific circumstances. For example, they'll decide whether to keep offering coverage or shift workers onto exchanges based on the state in which they operate, who their competitors are and what kinds of employees they want to attract and hire. "I don't see a wholesale movement in any direction, and I strongly suspect this is not the last shoe to drop," Neil Trautwein, employee benefits policy counsel at the National Retail Federation, told Politico. "Some shoes may look like [Target's] announcement, some may be greatly different."

3. Employers are hesitant to make changes--for now

Despite news reports that companies are making major changes to their health insurance options, businesses like Target and Darden Restaurants are the anomaly not the norm--for now, at least. Companies still are unsure of how exchanges will work, especially after the glitch-filled rollout of HealthCare.gov. "They want to make sure the exchanges represent a venue where their workers can get good coverage at affordable prices, and it's too early to tell of course," Jim Klein, president of the American Benefits Council, told Politico. But as state and federal marketplaces continue to improve their enrollment processes and resolve glitches, employers may reconsider them, especially as the cost of offering healthcare coverage is expected to rise by 7 percent this year.

To learn more:
- read the Politico article

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