A Wal-Mart store in Miami, Fla.
Credit: Joe Raedle

Wal-Mart Stores Inc. has announced it will no longer offer health insurance to new part-time U.S. workers who put in fewer than 24 hours a week, Reuters reports. The company, the largest private employer in the U.S., had offered the benefit to part-time employees since 1996, regardless of how many hours they worked.

Wal-Mart is scaling back the healthcare benefits it provides in other ways, too: Reuters reports it will put half as much money in employees’ healthcare expense accounts – money for healthcare expenses that are not covered by insurance. Individuals will now receive $250 annually towards expenses, rather than $500, and families will receive $500 instead of $1,000.

Also, employees who are smokers will have their premiums hiked 40 percent, the company said. “Tobacco users consume 25 percent more health care services than non-tobacco users,” Wal-Mart spokesman Greg Rossiter told The Associated Press.

“The current healthcare system is unsustainable for everyone,” Rossiter told Marketwatch. “Like other businesses, we’ve had to make some tough choices.” He added, “Our country needs to find the way to reduce the cost of healthcare, particularly in this economy.”

According to the AP:

The company's cuts on health care represent a reversal from only a few years ago when Wal-Mart, under pressure from union-backed groups, announced that it would provide health care coverage to part-time workers, including those who work less than 24 hours a week, after one year on the job. Prior to that, part-time workers had to work at Wal-Mart for two years before being eligible for coverage.

Wal-Mart insures more than 1 million people, including workers' family members, Reuters reports.

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