Will Rocketing Healthcare Costs Crush Margins for This Big Box Retailer?

Corporate America is coming to grips with healthcare (NYSE:XLV) costs. Walmart (NYSE:WMT) has made significant changes to healthcare coverage for its employees based on these rising costs.

In sweeping health care changes, Walmart (NYSE:WMT) is reducing coverage for part-timers and raising health insurance premiums for full-time staff. The company has fixed a minimum threshold of working 24 hours a week for part-timers to qualify for health insurance.

“Over the last few years, we’ve all seen our health care rates increase and it’s probably not a surprise that this year will be no different,” Mr. Rossiter, a Wal-Mart (NYSE:WMT) spokesman, said. “We made the difficult decision to raise rates that will affect our associates’ medical costs. The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

Premiums will increase for some plans by more than 40 percent in 2012, although many workers pay relatively low premiums in comparison to more generous plans offered by other employers. Smokers have been penalized and would have to pay substantially extra premiums for coverage. The changes were condemned by Dan Schlademan, director of Making Change at Walmart (NYSE:WMT), a union-backed campaign.

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