Target Gives Employees More Health Care Responsibility

May 16, 2006 ( - Target Corp. is reacting to rising health care costs by shifting some of the medical care responsibility to its employees.

The Minneapolis Star Tribune reports that the company now offers its employees high deductible health plans (HDHPs) coupled with a health savings account (HSA) or a health reimbursement account (HRA). Target is also considering dropping its traditional health plan offering.

In company documents provided to the Star Tribune, Target warns employees that the traditional plan will not be around much longer and promotes the offering of the HDHPs as an effort to encourage them to take more responsibility for their health care. “Think of it like the retail business – when people are spending their own money, they want the best value at the best price,” says a guide given to employees, according to the news report.

Target spokeswoman Carolyn Brookter denied that the company is shifting costs to employees and said it would continue to pay the majority of employees’ health costs. “We believe consumer plans allow us to continue providing competitive benefits … while addressing the rising costs of health care benefits,” she said.

However, the deductibles for Target’s plans are higher than industry standards, up to $5,000 for families, including Target’s contribution. Nationwide, the average HSA deductible for families is $4,070, or 19% less than Target’s, according to the Kaiser Family Foundation, the news report said. Target pays 80% of expenses beyond the deductible and all expenses once a maximum out-of pocket level is reached – up to $8,800 for families.