Saying that part-time employees can now get health care coverage through recently launched online insurance exchanges, Target announced yesterday that, as of April 1, it will no longer offer insurance to its part-time staffers.

Instead, the retailer will provide each part-time worker currently enrolled in the store’s insurance plan with $500 cash that can be used to purchase coverage elsewhere. Employees can also arrange for one-on-one sessions with a benefits manager to talk about the transition.

“Our decision to discontinue this benefit comes after careful consideration of the impact to our stores’ part-time team members and to Target, the new options available for our part-time team, and the historically low number of team members who elected to enroll in the part-time plan,” writes Target’s head of Human Resource, Jodee Kozlak, in a blog post.

Kozlak claims that participation in the store health plan among part-time employees was not very high, representing only about 10% of Target’s entire 361,000-person workplace.

Target is just the latest large retailer to shift part-time employees off company-provided insurance plans and toward the online exchanges. Large businesses like Sears/Kmart, Petco, Home Depot and Darden Restaurants (Olive Garden, Red Lobster, LongHorn Steakhouse) have all recently announced similar changes in health care coverage.

Some of these employers have switched workers to private exchanges, operated by benefits providers and customized for these businesses and their employees. Others, like Target, are telling part-timers to look to public exchanges operated by the state and federal government.

One union organizer in Target’s home town of Minneapolis worries that retailers may deliberately limit workers’ hours to keep them below the full-time threshold set by the Affordable Care Act. Doing so would mean the business would not have to provide insurance.

“All of a sudden where you used to work 31 hours a week, it’ll be cut to 28 hours or less — and that’s a huge hit,” he tells the Minneapolis Star-Tribune. “You’ll see a department that might have one or two real full-timers and the rest will be these perpetual part-time people who will never have a chance for full-time hours because Target is looking at everyone as a cost.”

In her blog post, Kozlak provides a vague denial to such accusations, saying that Target will not be limiting hours.

“At any time, our team members can talk to their manager about their interest and availability to work more hours,” she writes. “In fact, during the holiday season we offered our year-round part time and full time team members the opportunity to take on additional hours or cross-train to work in other areas — at their request.”

Target will drop health insurance for its part-time employees [StarTribune.com]

Target to stop health care coverage for part-time workers [Reuters]

Talking Health Care with EVP of Human Resources Jodee Kozlak [Target Blog]

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