Walmart and the PR Cost of Health Care

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walmart healthcare public relations

Walmart recently made the news for raising some wages in certain regions and areas across the country. The move was heralded as a win for beleaguered Walmart employees and as a concession by management to labor. But now the other shoe has dropped for Walmart’s Healthcare PR.

According to reports by CNN, Walmart is about to eliminate health benefits for about 30,000 employees. The company is citing drastically rising healthcare costs as the reason for this decision, and the uncertainty of the Healthcare Industry. Now, the cuts only apply to about 2% of the company’s United States workforce, but you can bet most of the news surrounding this announcement will omit this fact, or, at least, push it down in the story.

That will leave Walmart once again scrambling for the PR ground they gained with the wage increases. They could say that these workers are now eligible for Obamacare and that this might even be a better deal…but that argument is a corporate non-starter and, likely, PR suicide.

And then there’s a third shoe to drop. Those who get to keep their health care will also see a rise in premiums. For some, this increase will be substantial. The cheapest plan will go from about $3 per paycheck to about $21 per paycheck.

To be fair, Walmart is hardly the only major retailer to make this decision. Back in January, Target announced that it would be eliminating benefits for all part-time workers. The company encouraged these employees to enroll in Obamacare and, reportedly, paid them $500 as an incentive. Both Home Depot and Trader Joe’s also announced plans to drop health benefits for part-time workers.

Even if people understand the economics of the decision, many will still assume these companies will begin to cut employee hours to see even fewer people on their insurance rolls. While this is a fair assumption, Walmart, and others have publicly said they have no plans to do so. Time, of course, will tell.

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