Wal-Mart Health Cuts Reopen Debate Over Obamacare Costs, Savings

This May 28, 2013, file photo, shows a sign outside a Wal-mart store in Duarte, Calif. Wal-Mart on Wednesday, Sept. 24, 2014 said it is launching a mobile checking account for its customers that will eliminate some of the fees charged by banks. (AP Photo/Damian Dovarganes, File)

(Business Week) – Wal-Mart Stores Inc. (WMT:US)’s move to eliminate health insurance for about 30,000 part-time workers underscores the mixed benefits of Obamacare for companies and their employees.

Wal-Mart said yesterday it would no longer provide health coverage to employees who work less than 30 hours a week, following similar moves by retailers such as Target Corp. (TGT:US), Home Depot Inc. (HD:US) and Walgreen Co. (WAG:US). Wal-Mart had already dropped benefits for many new part-time workers in 2012.

The U.S. Patient Protection and Affordable Care Act, known as Obamacare, has brought more health-care options for employees pushed out of corporate benefit plans. That may have made it more palatable for Wal-Mart to make the change, which could save the company about $50 million in premiums this year.

Still, adopting Obamacare has brought other costs, leaving the total effect on large companies unclear. Wal-Mart said in February that the Affordable Care Act contributed to a $330 million increase in health costs — a number it later raised to $500 million. Employers shedding coverage also may have to pay workers more to make up for the loss of benefits, said Larry Levitt, a senior vice president at the Kaiser Family Foundation of Menlo Park, California.

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