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By Truven Staff

Employers Cut Coverage as Healthcare Costs Climb

Wal-Mart Stores Inc. announced a cut in health insurance benefits on Friday, October 21st, according to by Reuters’ journalist, Jessica Wohl. Wal-Mart will be joining the ranks of Wells Fargo & Co. and General Electric, who have also announced upcoming cuts to their employee health care benefits in 2012.
Walmart image
As the United States largest private employer, Wal-Mart employs 1.4 million people in the United States and insures more than 1 million employees and their families. The benefit reduction as laid out in the original article on, will only affect new, part time employees (working less than 24 hours per week) and workers that admittedly use tobacco. Part time employees (working less than 24 hours per week) will no longer be eligible for corporate insurance benefits with Wal-Mart and tobacco users will be looking at higher costs (basic plans will cost tobacco users $25 per pay period while non-tobacco users would pay only $15 per pay period).
In light of a separate article published by Reuters, corporate insurance hikes should come as no surprise. In late September, Reuters chronicled the results of an annual healthcare survey by the Kaiser Family Foundation and the Health Research and Education Trust. According to the survey, the average annual premium for family coverage sponsored by an employer rose 9% from 2010 to 2011 and individual plans of a similar nature rose by 8% from 2010 to 2011. Over the course of the last ten years, there has been a 134% increase in the cost of health care premiums.
In a statement from Wal-Mart spokesman Greg Rossiter, he looks to the United States government to ease the burden of increasing healthcare costs, “Our country needs to find a way to reduce the cost of healthcare, particularly in this economy.” However, according to some small business owners, some of the new health care laws are actually creating the dramatic increases in healthcare costs. According to the study by the Kaiser Foundation and the Health Research and Education Trust, 1.5 percentage points of the 9% increase in healthcare premiums can be retraced to elements of health care laws.
While it remains to be seen how many other businesses or corporations may or may not be cutting healthcare benefits in 2012, a survey conducted by Mercer projects only 5.4% increase in health benefits costs for 2012.
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