It’s not just purchasers of health coverage on the Affordable Care Act exchanges who need to worry about whether their benefits will disappear or whether the price will balloon beyond their ability to pay. New Walmart employees—at online retailers the retail giant has acquired—are watching their employer-sponsored health coverage disappear.
The New York Times reports that in a little over a year, Walmart has sunk close to $4 billion into the acquisition of e-commerce companies that collectively employ thousands of workers. And as those acquisitions came under the Walmart umbrella, many of those workers are finding that their health care coverage is no longer even remotely affordable.
Walmart has long been criticized for skimping on its employees’ health care benefits, with many Walmart workers actually relying on Medicaid in the absence of employer-sponsored coverage within their reach. And while it did make coverage both more accessible and more affordable for a brief period about 10 years ago, that trend is now reversing itself.
In 2011, for instance, the company boosted some premiums by more than 40 percent, according to the NYT report. Three years ago, it tightened the eligibility requirements for obtaining coverage, shutting out workers putting in less than 30 hours a week. And while other retailers such as Target and Home Depot may have made similar changes, that doesn’t make it any easier on workers to know that they’re not alone.
Retail in general is a tough industry in which to get health coverage—and even when it’s available, the report says, workers sign up in low numbers, “possibly suggesting that the insurance is not very attractive or affordable even when companies do offer it.”
But that hasn’t been true for a number of e-commerce companies—at least, not until they were acquired by Walmart. For instance, online men’s retailer Bonobo offered its workers health coverage with no premium, as long as they chose a deductible of $2,000 for an individual or $4,000 for a family. Walmart bought the company in June and now employees will have to fork over $750 in premiums (for an individual) or $4,000 (for a family) for a comparable plan. The kicker? The deductibles now, in both cases, will run 50 percent more than under Bonobo’s management.
Then there’s women’s online retailer ModCloth, whose workers now must pay deductibles of several thousand dollars per year to keep premium levels relatively close to what they paid under ModCloth. Previously they had no deductibles.
Economists are concerned that Walmart’s policies in the wake of its acquisition spree will exert downward pressure on health benefits throughout the e-commerce sector. And Jared Bernstein, a senior fellow at the Center on Budget and Policy Priorities, is quoted in the report saying, “My concern is that they bring their model with them regardless of what was going on before they got there.”
Blake Jackson, a Walmart spokesman, is quoted saying in the report, “We’ve put a lot of thought into creating a total package, including both compensation and benefits, that offers more than what we’ve had in the past.”
But perhaps not as much as what acquired employees had in the past.
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