(Images Source: Bloomberg / Chicago Tribune)

BY ADNAN S. KHAN
 

Wal-Mart is famous for cutting prices, but now it’s going to be infamous for cutting health care benefits.


Wal-Mart will be dropping coverage for future part time workers and raising premiums on others.

According to Bloomberg, the company is trying break a streak of nine straight quarters of decreases in revenue. Bloomberg says, like many retailers Wal-Mart has started a campaign of cost cutting, but it might be trimming in the wrong direction.

“…the company's cuts on health care represent a reversal from only a few years ago when Wal-Mart, under pressure from union-backed groups, announced that it would provide health care coverage to part-time workers, including those who work less than 24 hours a week, after one year on the job.”


The nation’s largest private employer says the cuts are a result of rising health care costs. Wal-Mart is among the few companies which provide health insurance to part timers. But ABC reports the package was barely affordable even for full-time staff.


“I can’t afford the health insurance that they offer. Even though I’m full time, I make nine dollars and eighty cents and I am a department manager.”
 

Wal-Mart says its decision has nothing to do with the healthcare reform law. Even if the company is trying to distant itself from the debate, The Washington Post reports it will not be able to escape it.


“Wal-Mart’s definition of a ‘part-time employee,’ … ranges between 24 and 33 hours-per-week. The health reform law sets the threshold slightly lower, counting anyone who works 30 hours-per-week as a full-time employee … This means that Wal-Mart could, come 2014, be required to cover some of the employees it’s now dropping.”


And Fox News commentator Betsy McCaughey explains why the Wal-Marts cuts and the reform law are related.
 

MCCAUGHEY: “When the law requires to cover more you will have to pay more. And the early provisions of this law, including adding children to their parents plan till their 26.”
CAVUTO: “They don’t leave.”
MCCAUGHEY: “Right!!! And no co-pay for preventative care. And other things like that. No annual cap on what the insurance company has to pay if you get sick. These have pushed up premiums and as you know premiums for employers went up 9 percent last year.”
 

The New York Times reports employees who are tobacco users will see a higher increase in premiums than their co-workers