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Target to Push Part-Time Workers Onto ACA Exchanges

Target is the latest big company that is going to drop coverage for some of its worker and encourage them to instead buy their own government-subsidized coverage on the Affordable Care Act exchanges. From Bloomberg:

Target Corp. (TGT) said it will end health insurance for part-time employees, joining Trader Joe’s Co., Home Depot Inc. and other retailers that have scaled back benefits in response to changes from Obamacare.

About 10 percent of Target’s part-time employees, defined as those working fewer than 30 hours a week, use the company’s health plans now, according to an announcement posted on the Minneapolis-based company’s website. Target said it would pay $500 to part-timers losing coverage and a consulting firm will help workers sign up for new Obamacare plans.

While companies are going to move slowly at first what you are looking at is the future of health care in America. Because of how the ACA was designed, providing lower income employees with health insurance simply doesn’t make financial sense. The poorly structured penalty for not providing them with coverage is smaller than the cost of the insurance. It doesn’t make sense to pay for employees’ insurance if the government is prepared to take up the cost.

Shifting people onto exchanges and making health insurance more “consumer driven” is a goal of  the ACA. Senate Democrats purposely chose not to go with a real employer mandate.

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Target to Push Part-Time Workers Onto ACA Exchanges

Target is the latest big company that is going to drop coverage for some of its worker and encourage them to instead buy their own government-subsidized coverage on the Affordable Care Act exchanges. From Bloomberg:

Target Corp. (TGT) said it will end health insurance for part-time employees, joining Trader Joe’s Co., Home Depot Inc. and other retailers that have scaled back benefits in response to changes from Obamacare.

About 10 percent of Target’s part-time employees, defined as those working fewer than 30 hours a week, use the company’s health plans now, according to an announcement posted on the Minneapolis-based company’s website. Target said it would pay $500 to part-timers losing coverage and a consulting firm will help workers sign up for new Obamacare plans.

While companies are going to move slowly at first what you are looking at is the future of health care in America. Because of how the ACA was designed, providing lower income employees with health insurance simply doesn’t make financial sense. The poorly structured penalty for not providing them with coverage is smaller than the cost of the insurance. It doesn’t make sense to pay for employees’ insurance if the government is prepared to take up the cost.

Shifting people onto exchanges and making health insurance more “consumer driven” is a goal of  the ACA. Senate Democrats purposely chose not to go with a real employer mandate.

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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is now living in the Washington DC area. He created a politics and policy blog, The Walker Report (http://jwalkerreport.blogspot.com/).