Late Tuesday afternoon, Target announced it will stop offering health care coverage to part time employees on April 1, bringing a fresh wave of criticism during what is already a dark time for the bullseye brand.
It's bound to be big news when the third largest retailer in the country decides to drop health insurance for its part-time staff, but the timing and context make the move even more arresting.
Company officials explained that they came to the resolution because affected employees can now get coverage through public health insurance exchanges, including MNsure. On a company blog post, Human Resources Chief Jodi Koziak even made it sound like the company is actually doing employees a favor.
"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," she wrote.
Industry experts share a more shrewd perspective, and they told Fox 9 News the decision has everything to do with Target's bottom line -- and may even be the company's way of preparing for huge losses following the data breach in the peak of the holiday shopping season.
It is perfectly legal for Target to cease offering health insurance benefits, and it makes a lot of sense for the company's financial future. Wal-Mart did something similar years ago, but the two discount retailers are different -- at least, Target would like to think so. Now, some are wondering whether the company has lost its footing.
Target claims the move only involves 10 percent of its workforce, an estimated 36,000 employees nationwide who work between 21 and 31 hours a week. Those employees will still receive $500 to subsidize their coverage, and they will still be eligible for other benefits, including a 401K plan, life insurance and disability.
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