Target announces it will drop part-time employees from its healthcare plan

Target Corp. announced on Tuesday it would no longer offer healthcare coverage to its part-time employees.

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In a blog post on the company’s website, Jodee Kozlak, the executive vice president of human resources, framed it as a positive development for part-time employees of the company.

“The Health Insurance Marketplaces provides new options for healthcare coverage that we believe our part-time members may prefer,” she wrote. “In fact, by offering them insurance, we could actually disqualify many of them from being eligible for newly available subsidies that could reduce their overall health insurance expense.”

Kozlak added that at present, fewer than 10 percent of part-time employees that are eligible have actually enrolled in the company’s healthcare plan.

“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,” Kozlak continued.

The company’s new policy goes into effect on April 1, 2014. Consumers have until mid-March to sign up for ObamaCare to be eligible for coverage this year.

Target said it has a transition program in place to “minimize any disruption and reduce confusion” for those who will no longer be eligible for the company’s healthcare plan.

The company will provide a $500 cash payment to employees losing coverage, as well as access to a benefits consultant.

Target stressed the company would not be reducing hours for any employees. 

Health and Human Services spokeswoman Joanne Peters said employers have been dropping coverage for years, and that under the Affordable Care Act, employees have will have an alternative when that happens.

"Since the Affordable Care Act became law, health care costs have been slowing and premiums are increasing by the lowest rates in years," she said in a statement. "Employers have been dropping coverage for more than a decade, long preceding the Affordable Care Act. But now, unlike before, employees have the option of shopping in the Marketplace for quality, affordable coverage, where they may be able to qualify for a tax credit to help pay for the cost."

Still, the announcement could reignite criticism over President Obama’s pledge that if you like your plan, you can keep it.

Many conservatives have warned that a wave of plan cancellations by private employers would be the next shoe to drop on the healthcare law. 

This post was updated at 10:39pm.