Target Drops Health Benefits for Part Time Workers in Latest Obamacare Coverage Disruption


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Big-box retailer Target is dropping health coverage for part-time employees. Via Politico: 

Target is the latest retail giant to drop health coverage for part-time employees, citing changes under by the president's health care law and low participation in its company health plans.

The company Tuesday night announced a plan to transition employees working fewer than 30 hours a week onto Obamacare health insurance exchanges, where they can get subsidized coverage.

Target isn't the first large employer to end health benefits for workers. Trader Joe's and Home Depot have made similar moves as well. 

These sorts of coverage cutbacks serve as a reminder that it's not just individuals buying health coverage on the individual market who are losing their existing coverage under Obamacare: Some people who had coverage from their employers are losing it as well. 

You can expect these sorts of coverage disruptions to continue.In some cases that will be because employers cease offering coverage. In others, insurers themselves will end existing coverage for small businesses and their employees. As The Washington Post reported earlier this month, the individual market cancellations we've seen as a result of Obamacare are just the beginning. There's a second, larger wave of policy terminations coming later this year:

According to industry analysts, insurers and state regulators, the disruption will be far greater, potentially affecting millions of people who receive insurance through small employers by the end of 2014.

While some cancellation notices already have gone out, insurers say the bulk of the letters will be sent in October, shortly before the next open-enrollment period begins. The timing — right before the midterm elections — could be difficult for Democrats who are already fending off Republican attacks about the Affordable Care Act and its troubled rollout.

Some of the small-business cancellations are occurring because the policies don't meet the law's basic coverage requirements. But many are related only indirectly to the law; insurers are trying to move customers to new plans designed to offset the financial and administrative risks associated with the health-care overhaul. 

Stories like these offer some insight into why so many of the health insurance sign-ups under the law so far appear to be for people who already had coverage rather than the previously uninsured. There's a lot of shifting around, as employers and insurers change or cancel policies to comply with new mandates or otherwise reshape their health insurance offerings to fit the new legal environment created by Obamacare. The overall effect is one of tremendous disruption to the existing health insurance marketplace.