Target's Latest Insurance Move: A Bust for Workers?

Target recently announced that it is dropping its part-time store employees from its health insurance. The statement has been used recently to bolster accusations by critics who say that the Affordable Care Act is a drain on U.S. taxpayers and is forcing employers to shirk their own responsibility to provide healthcare coverage.

Others say that the disqualification of part-timers by employers like Target, Walmart and Trader Joe's undercuts the effort to force the employers of some of the country lowest paid workers to improve how they do business.

"Major employers like Target should not be looking to taxpayers to subsidize an employee benefit they can more than afford to pay," said Carrie Gleason in an interview with Forbes.  Gleason serves as executive director of the Retail Action Project, a nonprofit advocacy group that has been calling on big-box stores to improve their labor practices.

She has a point. The fight to improve labor practices in stores like Walmart and Target, particularly when it comes to benefits and a living wage, has been going on for more than a decade. It’s not hard to see how large companies that were encouraged years ago to improve their healthcare benefits for workers may be benefiting from the government’s new healthcare marketplace.

But the greater question here may be: Who really stands to benefit from the change? Would part-timers who barely make enough to obtain adequate healthcare insurance really be better off under an employer’s plan?

Under federal law, employers aren’t obligated to cover employees who work less than 30 hours a week. But as Sarah Kliff of the Washington Post points out, continuing to cover the few that do plunk down a co-payment for their insurance premium could, in effect, lock out others from joining the ACA Marketplace.

And it’s important to remember that no two insurance premiums are equal. Does an insurance plan offered to a part-time employee at Target or Walmart really provide the employee with adequate coverage? And at what price?

Under the ACA, low-income subscribers qualify for healthcare subsidies that ensure that the worker can get adequate coverage for a reasonable price.

Yes, that does mean that part-timers benefit from taxpayer support. But consider it a bit of a quid-pro-quo arrangement: The addition of those part-time workers (many who are young and healthy) to the ACA network from large national stores like Target, Walmart and Trader Joe's means tens of thousands of additional subscribers, who, in their own way are helping initiate a change to how we look at healthcare. It means more dollars in the system, and it means more healthy checkups and more healthy employees. It means the potential for less sick time from health complications when they do occur.

Best of all, it means a change to how we regard the responsibility of providing healthcare. Making healthcare a personal initiative isn’t such a bad thing. And viewing those changes as good for the community, even if it means more initiative by the individual at first, isn’t really a loss, either.

For its part, Target has announced that it will give each part-time employee $500 to cover their enrollment in an ACA healthcare plan. With healthcare subsidies that account for their part-time income status, that contribution will allow the employee to enroll in a far better plan than what he or she would have been able to afford on employer-provided insurance (which oftentimes isn’t co-paid by the employer when the worker is part-time).

Target’s decision to drop its part-time employee insurance may seem like a burden on taxpayers, but it’s also an investment into a new way of looking at good health as a personal investment that is better for the nation, as well as the worker.

Image credit: Sarah Gilbert