With 'Obamacare,' Walmart Shifts Employee Health Costs to Taxpayers
New Walmart employees who work less than 30 hours per week will no longer be eligible for the company's health insurance program. Walmart joins other companies considering reducing benefits or work hours in light of the new health care changes known as "Obamacare."
The new policy will go into effect in January and may also impact current workers who work less than 30 hours per week, according to documents obtained by The Huffington Post.
The Affordable Care Act (ACA), popularly known as Obamacare, expanded the eligibility requirements for Medicaid, a government run health insurance program for the poor. Under the new requirements, beginning in 2014 anyone with income under 133 percent of the federal poverty line will be eligible for Medicaid.
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Average starting wages at Walmart fall between $6.30 to $10 per hour, according to PayScale.com and glassdoor.com. This would make many employees eligible for Medicaid under the new requirements.
Under the ACA, companies will be required to provide full-time workers with health insurance or pay a fine. Darden Restaurants, which owns Olive Garden and Red Lobster, has also announced that it will experiment with hiring more part-time workers to avoid paying the fine.
"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," Ken Jacobs, chairman of the Labor Research Center at the University of California, Berkeley, told The Huffington Post.
When the new law was debated in 2009, Walmart announced its support for the changes. Critics warned at the time that Walmart's support for the law was a case of crony capitalism, or rent-seeking. The large company would be able to bear the costs of the new law better than its competitors, thus driving those smaller competitors out of business, the argument went.
"Wal-Mart, the nation's largest employer, can afford the costs imposed by an employer mandate. Smaller competitors are likely to find it harder -- and they're not too happy about Wal-Mart's announcement," Peter Suderman wrote for Reason.com, a libertarian publication, in June 2009.
Walmart has been under scrutiny for its labor practices for many years. It began offering health insurance to its employees in response to those critics. More recently, there were protests in front of Walmart stores on Black Friday due to complaints over employees being required to work on Thanksgiving day.
