Walmart Dropping Part-timers Maybe a Win for 30,000 Workers

3115642.largeNew Orleans    I stand second to no one as a critic of Walmart’s employee and labor relations policies, but it’s hard for me to join the boo-bird chorus about the company’s latest Scrooge-like action in dropping part-time workers averaging less than 30 hours per week.  The company just may have done most of them a favor given the Affordable Care Act rules.

            I’ve been on this soapbox before, so let me try to climb up again without falling.  Under the rules, if there is an employer provided plan, a worker can still go to the state or federal based marketplace to buy insurance, but they are barred from receiving subsidies to pay for the insurance or cost sharing to help defray the cost of co-pays and deductibles.  Given the real wages of Walmart workers, as opposed to the average wage the company claims it pays workers, many of these part-time workers, especially if they are relying on Walmart as their sole employer, would be getting health insurance at little or no cost through the marketplace.  The odds would also be very, very good that whatever they would be paying would be less than the cost of the Walmart plan on offer were they still allowed in.  Furthermore, I would bet real money, the plan would more likely have lower deductibles as well.  Walmart may not have meant to do so, but it may have done these part-time workers a big, big favor.

            I say they “may not have meant to do so,” because in their comments on their actions they have the big crying towel on about having spent a half-billion more on health coverage costs last year because of the Affordable Care Act, but this statement is disingenuous as well, and is linked back to the same rule.  The coverage mandate meant that Walmart workers almost had to use the company’s health insurance policy, no matter how lousy, in 2014, simply because the Affordable Care Act required company policies to be the first choice for workers if there was a qualified plan in place.  Many workers for the USA’s largest private sector employer, probably just sucked it up and signed up for the company’s policies not wanting to shop at the marketplace or feeling that it was inaccessible given the well documented problems with the website at the opening bell and earlier in the year.  Walmart was therefore forced to have to pay its portion of their company policy, which most of their workers had avoided in the past, therefore leading to it having to actually spend some more money on worker healthcare, rather than just pretending that the workers were covered, while hundreds of thousands turned up their noses and took a chance on their own health.

            The more you read about the 30,000 workers Walmart dropped, amounting to 5% of its 600,000 worker part-time workforce and a little less than half of its 1.3 million workers, it is even hard to tell if these figures are accurate.  Press reports are clear that in 2011 they had already dropped from any coverage all workers averaging less than 24 hours of work weekly, so this new action would have impacted the slice of the part-time workforce averaging more than 24 hours and less than 30 hours.  Are these numbers credible?  Who knows really?  I’m only leaning their way because I can’t believe they would make themselves look worse than they already are.

            The head of the Retail, Wholesale and Department Union called Walmart’s move “shameful.”  Really, it’s just other day at the office in Bentonville, and possibly this excision of 30,000 workers may have been a lot less shameful than what they are doing to hundreds of thousands of workers with their substandard, but technically, qualified company plan every day.

 

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Sodexo Stumbles While Squeezing Through Obamacare Loophole

kick-out-sodexoNew Orleans   Obamacare continues to be contentious with daily reports arguing about the issue from Nobel Prize economist and columnist Paul Krugman’s assessment of the good news to more conservative pundits arguing we are on the verge of huge price shocks coming in the 2015 rating levels.  One thing that continues to be indisputable is the myriad ways that big employers are using to try to skirt the coming obligations to provide adequate coverage for their workers, especially if they can try to argue they are part-time.  Outfits with 100 or more workers are required to provide coverage this coming year and those with 50-99 workers in 2016.

As we all recall the bright line test for coverage is an average 30 or more hours per week.  The Republicans keep trying to amend that number up to 35 hours, but regardless those falling below the line already constitute 20% of the jobs in the US-workforce with about 28 million jobs.  Jobs and workers are different, but anyway you cut it, it’s a big number left out of employer-based coverage.   Predictably big companies with lots of part-time workers then will be trying to do everything they think they can get away with to keep from covering as many of these workers as possible.

Not surprisingly the giant, French-based services subcontractor, Sodexo, with 133,000 US-based workers, often targeted worldwide by unions for organizing because of its shenanigans, is right at the top of the list.  The company has no small amount of its business handling college dining areas and other cafeteria operations.  Taking advantage of an Obamacare loophole, Sodexo announced it was going to take its workforce, employed 9-months of the year on campuses, and average their hours across 52-weeks so that a significant number would not be eligible for coverage under the Affordable Care Act mandate since their average hours would then dip below 30 hours.

The union, Unite HERE, pointed out that direct employers like faculty members were protected under the ACA, but contract workers were not, perhaps in an oversight, perhaps not.  Sodexo blamed the Obama Administration and the Act.   A spokesman for HHS wasn’t having any of this and said,”

Nothing in the Affordable Care Act requires an employer to eliminate health coverage for any employees or penalizes an employer for offering health coverage to all employees. An employer that eliminates health coverage is doing so by choice, not by requirement.

Some of Sodexo’s employers, like the Quaker-founded Earlham College in Indiana objected and modified their contracts.  The company in a recent about face jumped backwards and said that it would recalculate the eligibility so that the average went back to 52-weeks.  But, even while this is good news, I’m troubled that others are likely to get away with this escape clause.  Furthermore Sodexo’s spokespeople still claim that either way it’s a wash in terms of the coverage they will offer their workforce and what it will cost the company, and that almost surely means that they intend to offer one of these inferior low premium/high deductible plans that are hardly insurance at all for most of their lower wage workers.

Sodexo may have stumbled while trying to scramble through a loophole and have been caught by a union with an eye on them, but there will be hundreds with no one looking that will be driving trucks through these and other loopholes with no one ever noticing, except their own workers, left high and dry, not that much of anyone seems to care.

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