Wal-Mart Cuts Back on Health-Care Coverage for Future Part-Time Workers (WMT)

Retail giant Wal-Mart Stores Inc. (NYSE: WMT) will cut back health care coverage for future part-time workers and raise premiums for some full-time workers.

Wal-Mart, which is the U.S.’ largest private employer, said that increasing health care costs are forcing it to completely eliminate health care coverage for future part-time workers, who work less than 24 hours a week. Meanwhile, new part-time workers, who work between 24 hours and 33 hours per week, will not be allowed to include a spouse as part of their health care coverage. The discount retailer also said that it will raise premiums for full-time workers, who smoke.

Wal-Mart has faced criticism in the past for the health care benefits it provides to employees. The criticism led the Bentonville, Arkansas-based retailer to offer better healthcare benefits to employees. However, the company has now decided to substantially cut back on health care benefits as it looks to cut costs in a uncertain macro environment.

Wal-Mart did not disclose what percentage of its current work force is part-time or worked less than 24 hours per week. A spokesman for the retailer said that the decision to cut back on health care coverage to new part-time employees resulted from the company’s revamping of its health care offerings in light of rising costs.

The move to scale back health care coverage comes at a time when Wal-Mart is struggling due to flat sales. And the retailer is expected to remain under pressure due to the uncertain economic environment. The unemployment rate in the U.S. is still very high and consumer confidence has remained low. Also, with consumer continuing to deleverage, it is unlikely that they will raise spending in the near future. All these factors have forced Wal-Mart to cut costs.

Wal-Mart shares have risen sharply in trading today. At last check, the stock was trading 1.47% higher at $57.20. Wal-Mart shares are up more than 6% this year.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.