Sound Progress

Research and insights from Puget Sound Sage.

Retail Giants Offer Lame Excuses for Dropping Part-timers from Health Coverage

As Danny Westneat points out in his Saturday column, corporate giants are rapidly beating the “blame Obamacare” drum to explain cutting part-timers off from health insurance coverage, but their rhetoric is as hollow as their sizable drum.

As we’ve been reporting on Sound Progress, retail giants have come forward with a wave of announcements that they are cutting part-time employees from health insurance coverage. What’s their leading reason for shifting the cost of providing health insurance for their employees onto the workers and health care exchanges? Obamacare made us do it!

Our study on Washington’s Changing Workforce revealed that service sector employers in Washington State have become increasingly dependent on part-time workers over the course of a decade, and at the same time have been cutting access health coverage for their employees. The trend began long before the finer details of the implementation of the Affordable Care Act (ACA) were known.

Our recent survey of grocery workers further demonstrated that area supercenter workers are subject to unstable and fluctuating schedules that leave them vulnerable to having their hours dropped below the threshold for their positions to be covered under the affordable care act employer mandate.

Westneat is on target with his characterization of the “blame Obamacare” rhetoric as little more than poor excuses. He points out:

In the central Puget Sound area, an estimated 8,000 of the 30,000 grocery store workers are part-timers. Currently, they get coverage if they work 16 hours or more, and pay about 20 to 30 percent of the monthly premium (the companies pay the rest).

The stores want to drop this coverage and make part-timers buy their own insurance in the state-run health exchange that opens this week as part of Obamacare. Home Depot is doing the same thing, as is Papa John’s Pizza and a number of retail chains.

This has led to denunciations of the new health reform for forcing companies to throw part-time workers off health care.

But is it? No. Howard Schultz is the proof.

Starbucks has upward of 100,000 part-time workers. Like the grocery stores, Starbucks gives health coverage to part-timers. But Schultz told them that under health-care reform: “Nothing is going to change. We are going to continue, as we have always done, to provide this benefit to you.”

What is going on here?

It could be that Howard Schultz is a bad businessman.

Or it could be that Obamacare is complex and confusing and so provides a convenient opportunity — an excuse — for companies to slash medical benefits and then blame the federal government. It could be they’re doing it because this is their big chance to shift more costs to the workers. And then, when some of those workers need subsidies, to further shift the costs to the taxpayers.

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