Home Depot drops part-timers’ health benefits, sends workers to exchanges

Home Depot is eliminating the limited medical insurance it offers its many part-time employees, forcing those workers to seek coverage from new public insurance marketplaces that open Oct. 1 or face a penalty.

The Atlanta-based retailing giant said its move is in reaction to the new law on health care coverage, the Affordable Care Act, also known as Obamacare.

Home Depot joins a growing list of corporations that have sliced or shifted their employee health insurance offerings, some citing potential savings and others pointing to better employee benefits.

The change affects about 20,000 part-time Home Depot workers nationwide who take the insurance coverage. Some part-time workers do not take the coverage. The company has about 340,000 employees, but the retailer would not say how many are part-time.

The company would not disclose how much it will save by dropping the insurance. Spokesman Stephen Holmes said, “We do not believe the impact of ACA will be material to the company’s financials.”

Some experts say the move to send workers to health care exchanges could improve the coverage options available to them.

“What they are doing makes a lot of sense for their part-time employees,” said David Bottoms, senior vice president at the Bottoms Group, an Atlanta employee benefits consultant. “While I am not privy to the benefit details on their particular limited benefit plan, this move will enable their part-time employees to secure richer coverage than that being provided on the limited-benefit plan while also benefiting from government premium subsidies.”

Individuals can qualify for subsidies toward the cost of their insurance if their household income is low enough.

In a letter to its employees, the company wrote: “As part of the new health care law, limited medical plans are no longer allowable in 2014. Our current part-time … plans are impacted by this.”

The letter continues, “In place of that, the law does provide for a new public Marketplace (or ‘exchange’) that will offer you more options. Beginning in October, you can shop in the Marketplace for comprehensive medical coverage that meets your needs.”

Home Depot would not provide details of its limited plan or explain why it is not allowed under the new law. However, health insurance experts say the law effectively disallows some types of limited benefit plans by requiring that they have unlimited annual benefits.

Home Depot said it will continue to offer its part-time workers various benefits, including dental and vision coverage, life insurance, short-term disability insurance, a hospital indemnity plan and a critical illness protection plan.

Home Depot becomes the third metro Atlanta-based Fortune 500 company in the past month to publicly discuss the impact of the Affordable Care Act on its employee health benefits programs.

UPS told its workforce that it is dropping coverage for about 15,000 of 33,000 spouses of nonunion employees in the U.S., if those spouses can obtain insurance from their own employers. Spouses who can’t get coverage through a job will still be insured through UPS.

In a memo to employees, UPS said, “This change is consistent with the way many large employers are responding to the costs associated with the health care reform legislation.”

UPS would not say how much money the move would save the company.

Last month Delta Air Lines confirmed that it had told federal officials earlier this summer that complying with the new health care law will cost the company and its employees tens of millions of dollars a year.

Delta detailed $38 million in extra costs attributed to the health care law.

Nationwide, most major corporations have declined to comment on the financial impact of the new health care law on their health benefit programs.

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