Walmart Reacts to Obamacare –Continues to Lead with its Chin

Scheduled to take effect in January, Walmart has defined a new policy which reserves its right to eliminate healthcare coverage for workers if their average workweek dips below 30 hours – a situation that is obviously under the discretionary control of company managers. Walmart declined to disclose how many of its roughly 1.4 million U.S. workers may be losing their medical insurance under its new policy. And not surprisingly, Walmart uses an advanced scheduling system to constantly alter workers’ shifts according to store traffic and sales figures. Therefore, it stands to reason that workers’ hours will now become an input to its sophisticated scheduling model.

“Walmart is effectively shifting the costs of paying for its employees onto the federal government with this new plan, which is one of the problems with the way the law is structured,” said Ken Jacobs, chairman of the Labor Research Center at the University of California, Berkeley. No offense to Mr. Jacobs, but didn’t we know this back in 2009?  Many of the Walmart workers who might be dropped from the company’s health care plans earn so little that they would qualify for the expanded Medicaid program, a feature of Obamacare, these experts said. “Walmart likely thought it didn’t need to offer this part-time coverage anymore with Obamacare,” said Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara. “This is another example of a tremendous government subsidy to Walmart via its workers.” Huh?

In pursuing lower health care costs, Walmart is following the same course as many other large employers. But given its unrivaled scale, Walmart’s policies attract more scrutiny and its policies are said to influence American working conditions more broadly, according to Tom Billet, a senior consultant at Towers Watson.  Billet portrayed the growing corporate interest in treating part-time workers separately as a reaction to another aspect of Obamacare — the new rules that require companies with at least 50 full-time workers to offer health coverage to all employees who work 30 or more hours a week or pay penalties.“In the past, firms were less careful about monitoring whether someone was full- or part-time,” Billet said, noting that many of his clients were now planning to track workers’ hours more carefully. “I expect health plans like Walmart’s won’t be uncommon as firms adjust to this law.”

While the left-leaning pundits love to point out that the shifting of Walmart employees to Medicaid rolls will increase the burden on American taxpayers, they frequently fail to mention that the change in coverage will likely be a better deal for the workers themselves. “The packages Walmart is providing for low-income people aren’t offering very much coverage except for catastrophes,” said Linda Blumberg, a senior fellow at the Urban Institute. “It’s likely they’ll be better off going with a government-sponsored plan.”

In fact, Walmart isn’t doing anything other than what it is essentially obligated to do as a publicly traded enterprise –strike back at the new tax. The Act increases its healthcare costs, so it is passing those costs on, a move that surely shouldn’t have been unexpected. Whether you love them or hate them, what many of us know and respect about Walmart is that the company will react more quickly and efficiently than its competitors. Frankly, it seems these companies appreciate Walmart’s willingness to lead the interference –to lead with its chin. It is common knowledge that Walmart’s response is just the tip of the iceberg. Highly regarded companies throughout the U.S. are doing the same thing, only many of them are starting with their retirees instead.

Source: Walmart, Huffington Post, New York Times

—Tom Finn

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