H-E-B pledged to not reduce employee work hours in an effort to avoid having to cover their healthcare last week. In contrast, other employers have been cutting their employee hours to avoid the Patient Protection and Affordable Care Act provision that would require healthcare coverage, according to a report published in the San Antonio Express-News.
And while some companies may be looking at ways to squeeze more out of their businesses, H-E-B, along with Walgreens and others, should be applauded for doing the right thing.
Specifically, beginning Jan. 1, companies with at least 50 employees will be mandated to provide affordable health insurance to their full-time employees, defined as those employees who work 30-or-more hours per week.
With regard to Walgreens, the company announced that it will provide more than 160,000 of its employees health insurance coverage through the "Live Well Benefits Store" — expanding health coverage choices for its employees, and for most cutting their out-of-picket expenditures.
Make no mistake, maintaining and even expanding health insurance coverage is a sound business decision, with tangible business outcomes. According to a June 10 blog published by the Wall Street Journal, out of paying the fine for noncompliance, reducing the workforce to all part-time employees and expanding healthcare coverage for full-time employees, expanding coverage turned out to be the least expensive option.
Counterintuitive? Not really. Not when you consider employee turnover and the customer service value associated with tenured employees. According to Cumberland Farms, a convenience store chain that similarly elected to maintain coverage for its employees, full-time employees stay three to four times longer as compared with part-timers. When turnover is high, customer satisfaction suffers.
According to a recent Bureau of Labor Statistics survey, 85% of full-time workers had access to employer-provided health coverage, compared to only 24% of part-time workers. Comprehensive employee benefits continue to be one of the primary ways that businesses stay competitive in recruiting top talent.